The right to a mandatory share in inheritance law ensures that close family members receive a minimum portion of a deceased person's estate. This principle embodies the idea of an unconditional obligation to support family members, aiming to provide a baseline of fairness within the family unit. Despite ongoing criticism of this concept, particularly in Austria, the decision was made to retain the mandatory share right during the estate law reform in 2015. This reflects a deep-rooted belief within society that close family members should not be entirely disregarded in matters of inheritance.

Recent representative surveys conducted in Germany and Switzerland indicate widespread support for maintaining mandatory share rights, a sentiment that likely resonates with the Austrian population as well.

There have been assertions that the right to a mandatory share is analogous to expropriation or inheritance tax, suggesting that assets are transferred to the state rather than remaining within the family. However, this is misleading. In reality, the deceased maintains full control over their assets during their lifetime, whether through gifts or testamentary arrangements. The right to a mandatory share only comes into effect posthumously, affecting the heirs or beneficiaries who may have to address claims from those entitled to a mandatory share.

It is a common misconception that the absence of a will results in the automatic application of statutory inheritance law, rendering the mandatory share irrelevant since family members will inherit anyway. In truth, the mandatory share plays a crucial role, especially in cases of statutory inheritance, as lifetime gifts can often infringe upon the mandatory share. This scenario commonly arises in practice.

Key Questions Regarding the Mandatory Share 1. Who is entitled to the mandatory share?

The mandatory share is primarily designated for the deceased's children and spouse or registered partner at the time of death. If a child has predeceased the parent, their descendants assume the child's position.

2. How is the mandatory share calculated?

Those entitled to a mandatory share are entitled to a specific value of the deceased's estate, determined by statutory inheritance provisions. The mandatory share is generally half the amount that the statutory heirs, such as children and spouses, would receive. Consequently, the mandatory share typically amounts to half of the deceased's total assets.

3. Are gifts factored into the calculation?

To prevent the deceased from undermining the mandatory share through gifts made prior to death, certain gifts are included in the calculation of the mandatory share under specific conditions. Gifts to individuals entitled to a mandatory share are considered indefinitely, whereas gifts to third parties only count if made within two years before the deceased's passing. Gifts made for charitable purposes or those fulfilling moral obligations are excluded, as are gifts covered by the annual income surplus.

4. Does the mandatory share restrict the deceased's freedom to dispose of their assets?

The deceased retains complete freedom to manage their assets up until their death. They can choose to gift their entire estate to a partner or designate them as the sole heir in their will, and these decisions are legally binding. The right to a mandatory share only comes into play posthumously, allowing entitled individuals to claim their share from the inheritor.

5. What happens in a practical scenario?

For instance, if a deceased person gifted their house worth EUR500,000 to their partner five years before passing away, retaining a lifetime right to use it, and left EUR20,000 in savings, designating the partner as the sole heir in their will, the mandatory share claim from the daughter would be based solely on the EUR20,000, amounting to EUR10,000, as the house gift falls outside the two-year consideration period.

6. Can the deceased revoke the mandatory share?

Yes, the right to a mandatory share can be revoked if specific legal grounds for disinheritance are present, which must be explicitly stated in the will. Legal grounds may include severe offenses against the deceased or their close relatives, causing significant emotional distress, or gross neglect of familial duties. If no grounds for disinheritance exist, the entitled individual retains their claim to the mandatory share.

7. When does the claim for the mandatory share become due?

The claim for the mandatory share becomes due immediately upon the deceased's passing. Heirs and those entitled to the mandatory share can negotiate the amount and payment terms. If no agreement is reached, the claim can be enforced as early as one year after the death. Typically, the claim expires four years post-death.

8. Is it necessary to sell family assets?

Effective estate planning, potentially involving mediation, can help prevent disputes and promote economically sound solutions. The deceased and potential mandatory share claimants may agree in advance to a waiver of their share in exchange for a compensatory payment. If an amicable solution fails, the law provides mechanisms to avert the sale of family businesses or homes. The mandatory share claim can be deferred for up to five years, with extensions available in certain cases, especially for agricultural operations.