Tag Archives: Successive heirs

Eight tips from Mag. Patrick Maydell, LL.M., Attorney at Law.

1. What are initial and subsequent heirs?

A testator can appoint an heir and also determine who receives the same assets after that heir's death. The initial heir (Vorerbe) must pass the assets originating from the testator to a subsequent heir (Nacherbe) at a specified time, such as the initial heir's death. This Austrian arrangement is called fideicommissary substitution.

This does not mean appointing the initial heir's own heir. The subsequent heir receives only the original testator's assets, not the initial heir's separate property.

The law limits the number of successive heirs to prevent assets being tied up over generations. Any number may be appointed if they are already alive when the will is made. For persons not yet alive, meaning neither conceived nor born, the testator may appoint one subsequent heir for real estate and at most two for other assets such as money.

The arrangement may cover the whole estate or only part. For example, a wife may inherit a holiday apartment, with the children to receive it after her death.

2. Rights of the initial heir

The initial heir's position resembles that of a usufructuary. Although they become owner on formal transfer of the estate and may use the asset fully, they must preserve its substance and may neither sell nor encumber it. They may dispose of it only insofar as the subsequent heir's rights are not infringed. Sale is possible where necessary to avoid damage to the asset.

The initial heir may enter into longer-term leases. Acting together, the initial and subsequent heirs may dispose of the asset without restriction, including selling or encumbering it, and may terminate the substitution arrangement.

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3. Rights and protection of the subsequent heir

The subsequent heir becomes owner only when the initial inheritance ends. The timing primarily depends on the testator's wishes. Nevertheless, the subsequent heir already has protective rights against the initial heir, including a preventive injunction if the assets are intentionally damaged, for example deliberately damaging a house to reduce its value.

An inventory must be drawn up ex officio to safeguard the assets. For real estate, the substitution is also noted in the land register as a Substitutionsband.

4. Who pays the expenses?

Expenses relating to property or other assets are allocated according to their nature: those normally borne by a usufructuary fall on the initial heir, while those borne by an owner fall on the subsequent heir.

5. Do the initial heir's restrictions bind third parties?

If the initial heir breaches the automatic prohibition on sale or encumbrance, for example selling without the subsequent heir's consent, or otherwise infringes that heir's rights, the prevailing view is that the disposition is invalid against third parties too.

6. Can creditors reach the property?

Creditors of the original deceased or estate may proceed against the estate without restriction. The existence of a subsequent inheritance cannot be raised against them.

The initial heir's own creditors cannot seize the substitution assets because that heir's position is comparable to a usufructuary's. They may, however, reach rental income, for example by seeking compulsory administration of the property.

7. Substitution of the remainder

Unlike ordinary fideicommissary substitution, substitution of the remainder allows the initial heir unrestricted lifetime disposal. They must pass on only what remains at death or when the substitution event occurs. They cannot dispose of that remaining part by a disposition effective on death, such as a will or codicil.

To prevent assets remaining for the subsequent heir, the initial heir could consume them or transfer them to a third party during life. However, abuse of rights is prohibited. If disposal is solely intended to harm the subsequent heir, that heir may claim damages and seek an injunction.

8. What is an alternative heir?

A subsequent heir should not be confused with an alternative or substitute heir (Ersatzerbe). The latter inherits only if the appointed heir never becomes heir, for example because they die before the testator or decline the inheritance.

Example: “My son Hans is to inherit only if my daughter Anna dies before me.”

Free initial assessment — call now

If you have questions or need help with inheritance law, call for a free initial telephone assessment or email office@maydell-law.at.

Mag. Patrick Maydell, LL.M.
Attorney at Law
Neustiftgasse 17/1/9
1070 Vienna
Telephone: +43 1 2954251
office@maydell-law.at