An inheritance is often perceived as a blessing, but it can quickly turn into a burden. Whether drafting a will or finding yourself as an heir, it’s crucial to understand that the law doesn’t deal solely with assets—it also involves responsibilities, debts and potential conflicts that may haunt you for years.
Adv. Boaz Kraus, an expert in inheritance law, cautions: “Not every inheritance is an asset—sometimes, it’s a serious liability.” Here are four critical points that, according to Adv. Kraus, every heir or testator must know.
Many assume that an inheritance represents a house, a car or a bank account. In practice, an estate includes all the rights and debts of the deceased, such as loans from banks, debts to authorities or suppliers, unresolved lawsuits and more.
“For instance,” explains Adv. Kraus, “in a case we recently handled, a man who was considered wealthy and owned a chain of clothing stores left a will for his family. Only after the will was executed did it become evident that the company he owned was deeply in debt, debts that exceeded the value of the assets he left behind. In such cases, heirs may face personal lawsuits and need to prove they effectively inherited nothing.”
Adv. Kraus explains that, especially when businesspeople are involved, their financial situation is not always transparent. A person may appear to own significant assets, but those assets might actually carry negative value. As a result, heirs who immediately apply for an inheritance order without proper consideration may suddenly find themselves exposed to lawsuits from various creditors. Handling these claims can become extremely costly for the heirs.
According to Adv. Kraus, in cases of uncertainty, it is advisable to publish a “notice to creditors,” as stipulated in Israeli inheritance law. This simple step protects heirs from future claims. The law states that when heirs publish a notice inviting creditors of the estate to submit claims for debts or other obligations, those who fail to respond within 90 days lose the ability to pursue legal action. In such cases, heirs are only liable for the value of what they inherited, not for the total debts of the estate. The notice must be published in a daily newspaper and serves as a significant legal safeguard for heirs.
Adv. Kraus recalls a case his office handled where heirs did not follow this procedure, which left them liable for enormous debts far exceeding what they had inherited. Publishing such a notice is therefore a vital legal tool that should always be utilized. If an heir does not publish a notice to creditors under Section 99 of the Inheritance Law, they remain exposed to all the estate’s debts.
For example, if the debts outweigh the assets—say the estate’s total worth is 5 million, but the heir received only 100,000—they could still be held liable for the entire 5 million. Any creditor can pursue them. In cases of doubt, publishing such a notice can protect you from liability exceeding the value of your inheritance.
Israeli law allows heirs to renounce an inheritance. Any heir can forfeit their share of the estate by submitting a signed affidavit to the inheritance registrar before the will is executed or the inheritance order is issued. If there is uncertainty regarding the scope of the assets, the complexity of the debts or potential legal complications, it is better to delay the inheritance process until the full picture of the estate—its assets, debts and rights—is clarified.
For instance, if an examination reveals that the estate’s debts exceed its assets, it is advisable to renounce the inheritance. However, it is important to realize that renouncing the estate passes the inheritance to the next in line. For example, if descendants renounce a parent’s estate, the heirs become the deceased’s parents or siblings. Understanding the full picture and ensuring that all relevant parties renounce the inheritance together is crucial.
Tip: Adv. Kraus suggests requesting the appointment of a temporary estate administrator before the will is executed or the inheritance order is issued. This administrator is authorized to assess the estate’s financial status prior to declaring heirs. This allows for an informed decision on whether to proceed with the inheritance or renounce it.
Many wills reignite old family disputes. Often, the issue isn’t the division of assets itself but rather lingering grievances—feelings of favoritism, the preference of one child over another or strained relationships with the deceased. “From experience,” explains Adv. Kraus, “in many cases, the financial cost of managing these disputes far exceeds the value of the inheritance. Moreover, such disputes often create deep rifts that last for years.”
Tip for heirs: Adv. Kraus advises, “Before rushing to court, seek a second opinion from a professional who can evaluate the chances and financial feasibility of pursuing legal action.”
Tip for testators: “If you are dividing assets unequally, it is important to explain why. Properly drafting an explanation within the will can help prevent disputes and appeals.”
Receiving an inheritance—even a small share of a property or a modest sum of money—can impact your financial status in the eyes of authorities. For example, someone eligible for property tax reductions, monthly allowances or public housing may lose their eligibility due to the inheritance.
Tip: “Check in advance how the inheritance will affect your rights. In some cases, renouncing the inheritance can preserve social benefits that are cumulatively worth far more,” explains Adv. Kraus.
