If the estate does not cover the compulsory portion after gifts are taken into account, several gift recipients are liable proportionally according to the value of their gifts.
Mag. Bernhard Brandauer
Attorney · BRANDAUER Rechtsanwälte, Salzburg
Inheritance matters are handled by Mag. Bernhard Brandauer together with a coordinated team. We examine the will, compulsory portion, gifts and deadlines and tell you clearly where you stand.
If the estate does not cover the compulsory portion after certain gifts have been taken into account, the person whose compulsory portion is reduced may demand the shortfall directly from the gift recipient. If the deceased made gifts to several people, Section 789(2) ABGB allocates this liability proportionally according to the value of the respective gifts.
This article explains when the claim arises, how several gift recipients bear their shares and why the gifted asset matters if payment is not made.
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The answer shows which part of a claim against gift recipients should be clarified first.
Section 789 ABGB requires gifts to have been added back or credited when the compulsory portions were determined, while the estate still does not cover them. The person whose compulsory portion is reduced may then demand payment of the shortfall from the gift recipient.
First arrange the estate assets, debts and gifts. The early review of gifts helps establish the basis for the next step.
Under Section 789(2) ABGB, the shortfall in the compulsory portion is allocated proportionally according to the value of the gifts. Liability is therefore not automatically divided by the number of gift recipients.
If one person received a gift worth 60,000 euros and a second person received one worth 40,000 euros, a shortfall of 20,000 euros would be allocated as 12,000 euros to the first and 8,000 euros to the second for calculation purposes. The example illustrates the method.
If the gift recipient does not pay the shortfall or the share owed under subsection 2, Section 789(3) ABGB limits liability to the gifted asset. It must therefore be established which asset was transferred and what condition it is in.
Agreements, transfer records, ownership evidence and any encumbrances belong in the review. The amount of the claim alone does not describe the liability in full.
Section 789 ABGB does not apply to provision received by a child to the extent that the child had a claim to it under Section 1220 ABGB. Classifying the transfer as provision may therefore be decisive.
Examine the purpose, occasion, scope and timing of the transfer. Only then can it be assessed whether the gift recipient liability under Section 789 ABGB applies.
Section 789 ABGB links the claim to a specific calculation. Gifts must have been added back or credited when the compulsory portions were determined and the estate must still be insufficient to cover them. The person whose compulsory portion is reduced may then demand payment of the shortfall from the gift recipient.
The issue is therefore a specific uncovered amount. The mere fact that a lifetime gift was made is not enough on its own. Before examining the claim, estate assets, debts, the compulsory-portion calculation and the value of the gift should be set out in a traceable overview.
Where several people received gifts, Section 789(2) ABGB makes them liable proportionally according to the value of their gifts. The value ratio of the transfers is decisive. Dividing the shortfall equally by the number of people can produce the wrong result.
For gifts worth 60,000 euros and 40,000 euros, the ratio is 60 to 40. If the open shortfall is 20,000 euros, this calculation example allocates 12,000 euros to the first person and 8,000 euros to the second. The values of the transfers must be established reliably in the individual case.
If the gift recipient does not pay the shortfall or the share owed under subsection 2, Section 789(3) ABGB limits liability to the gifted asset. The transferred gift therefore becomes the focus of the next examination.
The gift agreement, transfer, current ownership and any encumbrances are relevant. For real estate, the land register and valuation documents may also be needed. For movable property, it must be clarified whether the asset is still held or has been transferred onward.
Section 789 ABGB contains an exception for provision received by a child to the extent that the child had a claim to it under Section 1220 ABGB. The label used for a transfer therefore does not decide the issue. Its purpose, occasion, scope and legal basis must be considered together.
This distinction belongs in the first review of the gifts. It may determine whether the direct claim against the gift recipient under Section 789 ABGB applies at all. The documents concerning the transfer and the family situation should therefore be secured in full.
Which transfers can matter for the compulsory-portion calculation.
Which estate positions should be organised before the calculation.
The legal minimum share and further inheritance disputes.
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