What is a Contractual Inheritance?
A contractual inheritance, or “contractuele erfstelling” in Dutch, is a form of inheritance that is regulated by a contract. This means that the inheritance is established by a will or other form of legal document, and is not subject to the laws of intestacy.
Why Choose a Contractual Inheritance?
There are several reasons why individuals may choose to use a contractual inheritance. These include:
1. To ensure that specific assets are inherited by certain individuals.
2. To prevent disagreements among heirs.
3. To limit the tax consequences of inheritance.
4. To avoid the time and expense of probate.
How Does a Contractual Inheritance Work?
To establish a contractual inheritance, a person must draft a will or other legal document that specifies how their assets will be distributed after their death. This document must meet the legal requirements set forth by the jurisdiction in which they reside.
Once the document is drafted, it must be signed by the person making the inheritance (the testator) and witnesses. The document should also be notarized to ensure that it is legally binding.
Once the testator has passed away, the contractual inheritance takes effect. The assets specified in the legal document are distributed to the designated heirs, according to the terms of the contract.
Benefits of a Contractual Inheritance
One of the major benefits of a contractual inheritance is that it allows individuals to have greater control over the distribution of their assets after their death. This is particularly important for those who have specific wishes regarding the distribution of their estate.
Another benefit of a contractual inheritance is that it can help prevent disputes among heirs. By specifying how assets and property will be distributed, there is less room for disagreements and legal battles.
Finally, a contractual inheritance can also help minimize the tax consequences of inheritance. The legal document can be drafted in such a way as to take advantage of tax laws and minimize the amount of taxes that must be paid on the estate.
In conclusion, a contractual inheritance, or “contractuele erfstelling,” is a useful tool for individuals who wish to have greater control over the distribution of their estate after their death. By establishing a legal document that specifies how assets will be distributed, they can ensure that their wishes are carried out and that their heirs are not left with legal battles or financial burdens.