A co-heir can be paid out or agree through a compromise. How a settlement payment and a compromise dissolve the community of heirs and what matters about the valuation.
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.
Several heirs form a community of heirs and must administer the estate jointly. This often leads to tension, especially where individuals wish to step aside or be paid out. A settlement payment and a compromise are two routes to order the community without lengthy proceedings.
This article explains how a co-heir is paid out, how a compromise settles the division and what role the valuation plays. It does not replace advice in an individual case but shows the advantages of an amicable solution.
If a co-heir wishes to step aside from the community of heirs, they can waive their share against a settlement payment. The remaining heirs take over the share and pay it out. The estate thus stays with the remaining heirs without everything having to be divided.
The amount of the settlement is based on the value of the share. The agreement should clearly settle the extent, amount and due date of the payment. A clean written version prevents later disputes about what was agreed.
A compromise is an agreement by consent with which the heirs divide the estate themselves. It can allocate assets in kind, set equalisation payments and dissolve the community. With the devolution of the estate the court implements the division.
The compromise is more flexible than a judgment because it can take account of the parties wishes. Important is a complete settlement of all points so that no open remainder is left. A clear written version gives all sides certainty.
Both a settlement payment and a compromise need a reliable valuation of the estate. For real property an expert valuation is often sensible, while for accounts and securities current proof suffices. Only with clear figures can fair shares be determined.
The amicable agreement has clear advantages over a contested action for division. It is usually faster, cheaper and more predictable and it spares family relationships. An action remains the last step where no agreement is possible.
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