When it comes to estate planning, you can’t just do as you please. There are precise rules governing who can inherit and how much they get. Here is an overview of how it works.
Main principles of estate transfer
When it comes to inheritance of your wealth, what counts most is not the degree of kinship with the deceased, but the order (i.e. the category of heir) in which a relative appears. The closest order excludes more distant orders from the inheritance. It is only within an order that a relative with a closer degree of kinship takes priority over a more distant relative. A degree simply means one generation.
First order of inheritance: descendants
Children inherit equal shares. Predeceased children are represented by their own descendants (inheritance by representation). No distinction is made between children born in and out of wedlock. They are all equal under inheritance law. The same goes for adopted children. The children exclude all other heirs with the exception of the surviving spouse.
No distinction is made between children born in and out of wedlock. They are all equal under inheritance law.
Second order of inheritance: the surviving spouse
In Luxembourg, the surviving spouse is considered by some to belong to a second order of inheritance. This is a somewhat special order, as the spouse is a unique and privileged heir. If there are no children:
- The whole estate goes to the surviving spouse.
- Unlike children, spouses do not qualify as compulsory heirs and can be excluded from inheriting through the will.
If there are children, the surviving spouse may choose:
- The full right of usufruct of the property inhabited by the spouses and its furnishings, whilst the children inherit the bare ownership of the property and furnishings as well as full ownership of the remainder of the estate. This is only possible if the property was owned by the deceased alone or jointly with the surviving spouse.
- Full ownership of a child’s share (at least one quarter of the estate).
Luxembourg law, however, provides for a “special discretionary portion for the spouse” (art. 1094 of the Civil Code), allowing the deceased spouse to leave the surviving spouse either a standard share and the usufruct of the rest of the estate, or the entirety of the estate in usufruct. The following table shows the minimum share to which children are entitled if the surviving spouse receives this special discretionary portion. It is not allocated automatically; if no provision has been made (e.g. in a marriage contract), the children inherit their portions under full ownership.
|Number of children||Children’s portion||Surviving spouse’s portion|
|1||1⁄2 in bare ownership||1⁄2 in full ownership and 1⁄2 in usufruct|
|2||2⁄3 in bare ownership||1⁄3 in full ownership and 2⁄3 in usufruct|
|3 or more||3⁄4 in bare ownership||1⁄4 in full ownership and 3⁄4 in usufruct|
Third order of inheritance: ascendants and preferred collateral relatives
The mother and father each receive one quarter. The brothers and sisters of the deceased share the rest. Predeceased brothers and sisters are represented by their descendants (inheritance by representation). In the absence of brothers and sisters or any descendants of theirs, the parents inherit everything.
Fourth order of inheritance: other ascendants
In this scenario, the estate is divided equally between the maternal branch and the paternal branch. In each branch, the closest ascendant receives the share allocated to that branch. In the absence of ascendants in one branch, the entire estate goes to the other branch.
Fifth order of inheritance: other collateral relatives
In this scenario, the estate is divided equally between the maternal branch and the paternal branch. In each branch, the closest collateral relative receives the share allocated to that branch. In the absence of collateral relatives in one branch up to the fourth degree of kinship, the entire estate goes to the other branch.
Sixth order of inheritance: the State
In the absence of heirs from the first five orders, the estate goes to the State.
A little confused by the technicalities? Learn who inherits what, step by step and in plain language.
A will can be used to deviate from the statutory distribution – subject to certain limits, particularly when there are children.
Can you deviate from the statutory distribution of inheritance?
A will can be used to deviate from the statutory distribution – subject to certain limits, particularly when there are children. This can also be done by means of a gift:
- By inheritance advance (in advance of the share of the estate).
- By privileged allocation (in addition to the share of the estate).
Can you deviate from the statutory order of succession?
Children and other direct descendants cannot be disinherited. The portion of the estate at the time of death that the deceased cannot distribute at will is called the indefeasible portion. This portion is intended to secure the rights of the rightful heirs.
- The portion the descendants receive if there is no surviving spouse.
- The portion the descendants receive if there is a surviving spouse. Here, the children’s portion depends on whether the deceased spouse has extended the claim of the surviving spouse to the special discretionary portion.
- The discretionary portion: excess that the deceased may distribute freely.
|Number of children||Indefeasible portion||Discretionary portion|
|3 or more||3⁄4||1⁄4|