A reader has contacted us after inheriting the deceased’s land, but the deceased also had debts, and now he is uncertain about what to do: should he accept or reject the inheritance? I have already sent him an email stating that he can sleep peacefully (at least because he will not have to settle the debt), but this is an opportunity to remind ourselves of a case I wrote about before, where an attempt was made to fraudulently extract money from the heir due to an existing debt.
First, let me explain to the reader once again. He did not specify the value of the inherited land and the amount of debt left by the deceased, only noting that she ‘received social assistance, so there is a debt to the state. I do not know what my rights are, can I build something if I do not settle the debt? I asked the Tax Administration, they do not know the answer,’ writes the reader.
Clear rules
The inheritance law is clear: it stipulates that heirs are liable for the deceased’s debts up to the value of what they inherit. If, for example, the value of the inherited land is one hundred thousand kuna, and the deceased owed forty thousand kuna, then after the probate process, that land will be sold, and from that amount, the forty thousand kuna debt will be paid, leaving the heir with sixty thousand. Of course, there is the possibility that the heir, if he believes it is a better option and that the land is valuable, can settle the debt himself and keep the entire land for himself.
Another case: if the deceased left an estate worth one hundred thousand kuna, and her debt amounts to one hundred and ten thousand kuna, then the entire debt is paid to the creditor (in this case, they take ownership of the land), and the heir is left with nothing from the inheritance. However, it should also be emphasized that the heir is not obliged to settle the remaining part of the debt of ten thousand kuna. In other words, as I wrote, the inheritance law stipulates that heirs are liable for the deceased’s debts up to the value of what they inherit.
This is important because, as I see it, many heirs, despite the clear legal provision, do not know how to act if the deceased had debts greater than the value of the estate. A few years ago in ‘Pravda’, we helped a person who inherited property but also a much larger debt.
Namely, Mirko (a fictitious name, as are others; the real names are known to the author) took out a loan from the bank and secured it with walnut trees and a dilapidated house. The collateral was not sufficient to cover the loan, but for some reason, the bank approved the loan. In the meantime, it sold the claims for that bad loan to a company that deals with debt collection. Mirko later died, and his son Slavko inherited the trees and the house, but the company that bought the claims based on the lien took over the property and thus partially collected its debt.
