When inheritance is mentioned, what usually comes to mind is immovable property, bank accounts and receivables. Yet the body of assets that changes hands upon death is a single whole, comprising both its assets and its liabilities. Under the principle of universal succession on which the Turkish Civil Code No. 4721 is founded, at the moment the deceased draws their last breath both their rights and their obligations pass to the heirs without any legal transaction being required.
The aspect of this transfer that generates the most debate is where liability stops. Does the heir answer only with the values that have devolved upon them, or can the creditors reach as far as the heir’s own earnings and the heir’s own immovable property? How do institutions such as renunciation, waiver or disqualification, which bring the status of heir to an end, alter that picture? A large part of the disputes encountered in practice takes shape around precisely these questions.
Below we address, in turn, the types of debt that devolve upon the heir, the limits of liability as regards both the persons concerned and their assets, when joint and several liability comes to an end, and the recourse mechanism available to an heir who has paid more than their share.
The Concept of Estate Debt and the Source of Liability
In legal parlance, the estate denotes the sum of all the elements of property held by the deceased as at the moment of their death, together with all the obligations that had arisen up to that same moment. This body includes not only real property, deposits or claims against third parties; a loan owed to a bank, unpaid taxes, enforcement files pending against the deceased and performance obligations arising from contracts are all part of the same body. The person who acquires the inheritance is therefore drawn, to the extent laid down by law, into the burden side as much as into the benefit side.
Devolution Under the Principle of Universal Succession
Under the system adopted by the Code, the inheritance is acquired by the event of death itself. No declaration of intention to the effect “I accept”, no application to the court and no registration formality is required of the heir; the devolution takes place automatically. While rights in rem, claims and items of property pass to the heir in this way, the liability side of the estate simultaneously enters their sphere of responsibility. In other words, universal succession is not a selective transfer but a substitution covering the whole.
Rights and Obligations Assumed Together
The heir occupies a position in which the powers and the debts relating to the estate are concentrated upon them at the same time. In that capacity they may collect the claims of the deceased and assert rights over immovable property; conversely, creditors may also turn to them by reason of the estate debts. This picture cannot, however, be said to be fixed. Developments such as renunciation of the inheritance, division of the estate, transfer of an inheritance share to a third party or the running of the statute of limitations against a claim may substantially alter the scope of liability.
The Scope of Liability
Liability With Personal Assets
Under the scheme established by the Turkish Civil Code No. 4721, the heir’s liability is not confined to the estate values that have devolved upon them. Because the debts enter the heir’s legal sphere automatically, the creditor may turn directly to the heir’s personal assets for recovery. That may result in a vehicle registered in the heir’s own name, a flat owned by the heir or the account into which their salary is paid becoming the subject of attachment and enforcement proceedings.
That risk makes its true weight felt where the assets of the estate are insufficient to meet its liabilities. In an insolvent estate the heir may be compelled to pay out of their own pocket far more than the values they have taken over. The law does not make this outcome inevitable: renunciation of the inheritance within the statutory period and in due form removes this threat to the heir’s personal assets altogether.
Joint and Several Liability
Where there are several heirs, liability towards the creditor is joint and several; that is, each heir is liable jointly and severally for the whole of the debt. This arrangement constitutes a very powerful mechanism in the creditor’s favour, designed to secure recovery of the claim. It has two principal consequences.
First, the creditor may freely choose whom to pursue. Irrespective of the heirs’ shares, the whole of the debt may be demanded from a single heir, and enforcement proceedings or an action may equally be pursued simultaneously against several heirs. No obligation has been imposed on the creditor to pursue each of them separately in proportion to their share.
Secondly, in the internal relationship the measure is the inheritance share. While a joint and several obligation exists externally, that is, towards the creditor, in the reckoning among the heirs themselves the amount each must bear is proportionate to their statutory share. An heir who is obliged to make payment in excess of their share may claim the excess from the others.
Termination of Joint and Several Liability
Joint and several liability does not last indefinitely. Article 681 of the Turkish Civil Code No. 4721 provides that joint and several liability ceases five years after the division of the estate.
There is a distinction here that is frequently overlooked in practice: the expiry of the period does not extinguish the debt, it merely transforms the nature of the liability. After the fifth year following the actual division, the position becomes as follows: the creditor’s ability to demand the whole of the debt from a single heir disappears; the joint and several obligation is replaced by a personal obligation; each heir thereafter continues to be personally liable towards the creditor only for the portion corresponding to their own share.
As regards the running of the period, the signing of a written division agreement is not in itself sufficient. What is required is that the division should actually have been implemented, or that the court judgment given to that effect should have become final.
Who Is Liable for the Debts of the Deceased?
Statutory Heirs
Statutory heirs are those who acquire the inheritance automatically at the moment of death, within the system of classes laid down by the Code. Descendants, the surviving spouse, the mother and father and other blood relatives acquire that status according to the order and proportions indicated in the Code. As a natural consequence of universal succession, statutory heirs assume the burden of the estate’s debts along with the rights of the deceased.
The liability of these persons towards creditors is, as a rule, joint and several in nature. There is no obstacle to the creditor turning to whichever of the heirs they choose for recovery. In the reckoning among the heirs, by contrast, each bears only the burden corresponding to their own share.
Appointed Heirs
The deceased may, by drawing up a will or concluding a contract of inheritance, place certain persons in the position of appointed heirs. Since the inheritance is acquired by these persons too on the basis of universal succession, the rights and debts included in the estate enter their legal sphere in the same way. Appointed heirs may therefore also be held liable for the estate debts.
The limit of that liability is not, however, the same in every case. Whether the inheritance has been renounced, the legal nature of the disposition made and the content of the testamentary disposition are determinative. In particular, drawing the distinction correctly between a legacy of a specific item and the appointment of an heir is a matter that directly affects the outcome in practice.
The Position of the State
The estate of a person who dies leaving no heir at all passes, under certain conditions, to the State. When the State acquires that status, the debts devolve upon it just as much as the items of property in the estate. The position of the State differs, however, from that of natural-person heirs on one important point: the State’s obligation is limited to the estate property that has passed to it.
That is to say, the State cannot be held liable for estate debts out of the other resources in its budget; it assumes a burden only to the extent of the values that have devolved upon it. This limited liability is the essential feature distinguishing the State’s position as heir from the unlimited liability of natural persons.
Types of Debt Devolving Upon the Heirs
Debts Arising From Private Law Relationships
Obligations stemming from the private law relationships established by the deceased during their lifetime are, as a rule, regarded as part of the estate and pass to the heirs. Performance obligations arising from lease and sale agreements, debts arising from service relationships, obligations to pay damages and various claim relationships fall to be assessed under this heading. By virtue of universal succession, the heir takes the place of the deceased in those relationships to which the deceased was a party.
The exception to the rule concerns debts of a strictly personal nature. Obligations whose performance is bound to the person of the deceased themselves, or which involve a personal act of performance, may come to an end upon death and are not transferred to the heirs.
Loans and Other Financial Obligations
Housing loans, consumer loans, loans of a commercial nature, credit card balances and similar financial burdens are likewise components of the liability side of the estate. It is therefore legally possible for banks to turn to the heirs in respect of the unpaid debts of the deceased.
One of the matters that generates the most contention in practice is enforcement proceedings connected with loan debts and the scope of credit life insurance. Where the debt has been brought under insurance cover and the insurer makes payment, the heir’s burden may be reduced and in some cases may disappear altogether. Where, by contrast, no such cover exists at all or the insurer declines to pay, the bank may apply directly to the heirs.
Tax Debts
Tax debts that had arisen up to the date of the deceased’s death also form part of the liability side of the estate. The Tax Procedure Act provides that the heirs are to be liable for these debts in proportion to their inheritance shares. Property tax, income tax, motor vehicles tax and similar public claims may be demanded from the heirs within this framework.
As regards tax penalties, the outcome is different. By virtue of the principle that penalties are personal, tax penalties imposed in the name of the deceased do not pass to the heirs.
Enforcement Proceedings and Pending Actions
Enforcement files opened against the deceased and debts arising from proceedings still continuing at the moment of death are also, as a rule, included in the estate. Proceedings that had become final before the death, or that are still under way, may be directed against the heirs once the procedural steps required by law have been completed.
The same applies to actions to which the deceased was a party and to disputes over damages; the outcome of those proceedings affects the legal position of the heirs. For that reason, investigating the enforcement files and pending actions concerning the deceased before taking any decision about the inheritance is a decisive step in practice.
Debts Arising From Suretyship
Obligations assumed by the deceased in the capacity of surety during their lifetime are also among the debts that devolve upon the heirs. Article 597 of the Turkish Code of Obligations No. 6098 has, however, limited this liability in two respects.
The first limit concerns the amount: in the period up to the division of the estate, the burden the heirs are to assume with their personal assets may not exceed the maximum amount (the suretyship limit) indicated in the contract of suretyship. The second concerns the order of recourse: where the principal debtor fails to pay, the creditor may not knock directly on the heirs’ door; the creditor must first turn to the other securities provided by the principal debtor, such as a pledge or a mortgage, and must have failed to obtain satisfaction from them.
Suretyship obligations, which are not readily visible in the estate, carry the most unexpected risks for the heir. For that reason the option of renouncing the inheritance within the statutory period must always be kept on the table.
The Effect of Losing the Status of Heir
Renunciation of Inheritance
Upon death the estate passes to the heir automatically, with its rights and its debts; the law has, however, also afforded the possibility of turning that acquisition down. Where the declaration of renunciation is made within the period and in due form, the heir is released from liability for the debts of the estate.
A valid renunciation removes the status of heir with retroactive effect; for the purposes of the estate debts the person is treated as never having been an heir. As a natural consequence, creditors may neither institute enforcement proceedings nor bring an action against the person who has renounced by reason of an estate debt.
Waiver of Inheritance
A contract for the waiver of inheritance is a testamentary disposition concluded between the deceased and the heir during the deceased’s lifetime, by which the heir renounces in whole or in part the right that will arise in the future. Since the person waiving loses the status of heir, they are as a rule not held liable for the estate debts either.
Whether or not the waiver was made in return for consideration produces, however, very different consequences as regards liability.
In the case of a waiver without consideration, that is, a gratuitous waiver, since the heir has given up their right without receiving any consideration, no obligation towards the creditors arises when the succession opens. In the case of a waiver for consideration, by contrast, that is, where the heir has given up their right in return for a particular item of property or a sum received from the deceased, the legislature has laid down a strict rule for the purpose of protecting creditors. Under Article 530 of the Turkish Civil Code No. 4721, if at the date the succession opens the estate is unable to meet its debts and the creditors cannot be satisfied, persons who waived in return for consideration within the five-year period preceding the death are personally liable for the estate debts to the extent of the value they obtained, that is, to the extent of their enrichment.
As can be seen, the defence “I am no longer an heir, the debts do not bind me”, advanced by a person who has waived in return for consideration, does not afford absolute protection. If the estate is insolvent when the succession opens and the five-year condition is satisfied, the creditors may turn directly to the person who waived, in proportion to the consideration they received.
Disqualification From Inheritance
The Code provides that a person who commits certain grave acts automatically loses the status of heir. Situations such as the commission of a serious criminal offence against the deceased, or preventing the deceased from making a testamentary disposition, may give rise to disqualification.
Since a disqualified person is not regarded as an heir, they cannot benefit from the rights in the estate; correspondingly, as a rule they are not liable for the estate debts either. Whether disqualification has genuinely arisen and the scope of its consequences are determined according to the circumstances of the case itself and often require examination by a court.
Periods and the Statute of Limitations
The Five-Year Period of Joint and Several Liability
The liability that links the heirs to one another continues for five years from the making of the division. For that period to begin it is not enough that a division agreement should have been signed among the heirs; the division must genuinely have been carried into effect.
Where the division has taken place by agreement among the heirs, the period begins to run on the date the apportionment was actually made. Where the dispute has been resolved before a court, the five-year period is calculated from the moment the judgment concerning the division became final.
The Limitation Regime
The five-year period attached to joint and several liability is not a limitation period. That period merely indicates how long the interval will last during which the heirs remain jointly and severally liable towards the creditor.
The statute of limitations applicable to claims against the estate is, for its part, determined under the general provisions according to the legal relationship on which the debt is founded. Although as a rule a ten-year period applies, special statutes may provide for different periods. By way of example, a period of 2 years may apply to liability for defects in commercial sales, periods of 2 and 5 years to certain cases of defect arising from a works contract, periods of 2 and 10 years to claims for damages based on tort, a period of 1 year to certain claims arising from contracts of carriage, a period of 5 years to claims for wages, and likewise a period of 5 years to claims for rent.
This picture shows that, in order for the limitation period on estate debts to be calculated, it must first be established from which legal relationship the debt arises.
The Right of Recourse of an Heir Who Pays the Debt
Since joint and several liability applies towards the creditor, the whole of the debt may be demanded from any one of the heirs. The practical consequence is that one of the heirs may be obliged to make a payment exceeding their own share, or even amounting to the whole of the debt.
Article 682 of the Turkish Civil Code No. 4721 corrects this imbalance: an heir who pays an estate debt may claim from the others the portion corresponding to their shares. In short, while a joint and several obligation exists towards the creditor, in the apportionment among the heirs themselves the measure is as a rule the proportion of the inheritance share.
Ways of Exercising the Right of Recourse
There are several legal routes open to the heir who has made payment. In practice this claim is generally advanced by sending a formal notice through a notary, by instituting enforcement proceedings by way of general attachment, or by bringing an action for debt.
The first step is most often the formal notice; the other heirs are informed that they should pay, within a specified period, the portion of the debt paid that falls to their shares. Although serving a notice is not a mandatory stage, it performs important functions in practice: it establishes the date on which default occurred, fixes the moment from which interest begins to run, and carries evidential value in any action brought subsequently.
If payment is still not made, the heir who assumed the debt may institute proceedings by way of general attachment or bring an action for debt. Where in particular there is disagreement as to the amount paid, the true amount of the debt or the proportion of the shares, the route preferred in practice is an action for debt.
Interest on the Recourse Claim
Interest may also be claimed on the amount recovered by way of recourse. Interest begins, as a rule, on the date the other heirs fell into default. Where a notarial notice has been sent, interest begins to run once the period allowed in the notice has expired.
Where the notice stage has been skipped and enforcement proceedings instituted directly, interest is claimed from the date of the proceedings; where an action has been brought, from the date of the action.
Where there is no commercial relationship between the parties, the interest to be applied is as a rule the statutory rate of interest. Where, by contrast, the estate debt is commercial in nature or the parties hold the status of merchant, commercial interest may come into play.
Independent Legal Assessment
In succession files the most costly mistakes are usually made in the first few weeks. Time that passes without the true liabilities of the estate being known may lead to the loss of the right to renounce and to the heir’s personal assets being exposed to the creditors. Hidden obligations arising from suretyship and security relationships attached to loan agreements call for particular care, since they may not be visible when the file is opened and may come to light months later.
Correctly identifying the moment at which liability comes to an end is no less important. Whether the five-year period of joint and several liability runs from the actual division or from a final court judgment directly determines whom the creditor may pursue and for what amount.
In an individual dispute we consider it useful to address the following points as a matter of priority:
- Drawing up a complete schedule of the assets and liabilities of the estate before the renunciation period expires
- Screening separately the enforcement files, pending actions and suretyship relationships concerning the deceased
- Examining, in the case of loan debts, the scope of the life insurance cover and the conditions of payment
- Documenting the date on which the division was actually completed, so that the five-year period can be calculated
- Assessing, where there has been a waiver for consideration, the five-year period under Turkish Civil Code No. 4721 Art. 530
- Structuring the recourse claim, where payment exceeding the share has been made, so as to secure the starting point for interest
Independent Legal provides advisory and litigation services throughout the entire process in disputes arising from estate debts, from the renunciation of inheritance to the defence against creditors’ proceedings and the recourse relationships among the heirs.