Estate in Inheritance

Estate in Inheritance

Inheritance, as one of the fundamental legal events, has always been a subject of legal discussion. Upon a person’s death, their property is transferred by operation of law from the decedent to the heirs. The term “estate” refers to the property left by a decedent and is a legal concept derived from religious and legal sources.

Meaning of the Estate and Distribution Among Heirs

The estate consists of all assets and property left by the decedent. It includes both positive and negative elements. The positive element comprises the assets and rights that pass to the heirs, while the negative element consists of the debts and obligations of the decedent that must be settled. During the transitional and liquidation period, the estate may be likened to a company whose legal personality is in the process of dissolution, where the heirs and beneficiaries under a will are comparable to partners, and the creditors of the decedent are treated as creditors of that company whose claims must be satisfied.

Pursuant to Article 225 of the Law on Non-Litigious Matters, the heirs are not personally obligated to pay the creditors of the decedent from their own property. If the estate is insufficient to satisfy all debts, it is distributed among the creditors in proportion to their claims. Accordingly, identifying the net estate and the assets from which the debts of the decedent may be paid is essential. If the debts of the decedent have not been settled, any transactions conducted by the heirs in relation to the estate are ineffective and may be annulled by creditors. It should also be noted that all claims of the decedent against others, including claims against the heirs themselves, form part of the estate.

Preliminary Measures Before Distribution

Measures taken to protect the estate and ensure its proper transfer to the heirs are referred to as matters relating to the estate. These include sealing of the estate, administration of the estate, and preparation of an inventory.

Under Article 20 of the Civil Procedure Code, claims relating to the estate of a decedent, where the subject matter concerns the debts of the deceased and the estate has not yet been distributed, must be brought before the court of the decedent’s last domicile in Iran. If the last domicile is unknown, jurisdiction lies with the court of the decedent’s last place of residence. In addition, where a will relates to an undivided share of the estate, the court may, upon request of any legal heir, beneficiary under the will, or a creditor whose claim is established by an official document or final judgment, order the sealing of the estate after giving notice and setting a hearing.

Liquidation of the Estate

In matters concerning the distribution of an estate, liquidation is a necessary preliminary stage. Liquidation refers to the settlement of debts and rights that must be discharged prior to the distribution of the estate. Distribution of the estate is not permissible until liquidation has been completed. Article 869 of the Civil Code expressly provides that the rights and debts of the deceased must be paid before the estate is divided.

Under this provision, the rights and obligations payable from the estate include the following:

• Rights attached to the assets of the estate and the cost of the burial shroud.
• Financial obligations and debts of the deceased.
• Testamentary dispositions of the deceased up to one-third of the estate, with any excess requiring the consent of the heirs.
• Expenses related to the burial, washing, and funeral of the deceased.

In settling the deceased’s debts, certain creditors are entitled to priority over others. For example, wages owed to household employees for the final year before death take precedence over claims of a pharmacist relating to three years prior to death.

Sealing of the Estate

To protect the rights of the heirs and determine the deceased’s financial status, the estate may be sealed. This measure is carried out by the court upon the request of any heir, even a single heir, their legal representative, or a creditor whose claim has been legally established.

Acceptance of the Estate

If the heirs accept the estate without reservation, they become responsible for payment of all debts of the deceased, even if the debts exceed the value of the estate. Acceptance may be express, through official or private documents, or implied, through conduct indicating acceptance. In some cases, heirs, due to a lack of knowledge of the decedent’s debts, condition their acceptance on the preparation of an inventory. In such circumstances, the liability of the heirs is limited to the value of the inventoried estate and does not extend beyond it.

Rejection of the Estate

If the heirs refuse to accept the estate and formally reject it, the estate is treated as an estate without heirs. Pursuant to Article 327 of the Law on Non-Litigious Matters, such an estate is preserved and liquidated by an estate administrator appointed by the court. If any property remains after settlement of the debts, it is then transferred to the heirs.

Distribution of the Estate

The distribution of the estate requires the issuance of a certificate of succession. Distribution may take place by mutual agreement among the heirs without recourse to the court. Alternatively, any heir may apply to the court to claim their share. If an heir is legally incapacitated, their guardian, trustee, or custodian may act on their behalf. If an heir is absent, their appointed trustee may initiate the distribution.

The documents required for the distribution of the estate include the following:

• Submission of an application and the identification details of the applicant.
• Certificate of succession.
• List of assets, if an inventory has not been prepared.

Frequently Asked Questions About Estate in Inheritance