Supreme Court: Notaries must fully explain all inheritance contract risks

The  Supreme Court, in Tartu.
The Supreme Court, in Tartu. Source: Supreme Court.

The Supreme Court ruled last week that pre-nuptial, inheritance agreements between cohabiting partners can only be annulled in truly exceptional cases, meaning notaries must explain the nature and details of these, and any alternatives, to all parties, before signatures are given.

The case relates to inheritance agreements (Estonian: Pärimisleping) as opposed to a will (Testament); the latter provides far more latitude for unilateral changes on the part of the testator.

The case before the court related to spouses who entered into an inheritance agreement in which a man named a woman as his heir, only for this cohabitation partnership to dissolve less than a year later, after which the man wished to annul the contract.

The other party did not consent to this, leading to the man bringing a lawsuit, which was rejected at both county and district court level, and culminated in a Supreme Court hearing on November 23.

The Tartu-based court's civil bench agreed with the line taken by the lower-tier courts, in their decision published November 34

Since the woman did not agree to the cancellation of the contract, the man filed a lawsuit to replace the woman's consent with a judgment. The county and district court dismissed the lawsuit, and the civil panel of the Supreme Court took the same position in the decision published on November 23.

The Supreme Court noted that, unlike the case with a will, an inheritance agreement cannot be unilaterally changed or revoked by a testator. It is possible to request a court replace the consent of the other party only in exceptional circumstances, if the refusal to cancel a contract is contrary to the principle of good faith.

The Supreme Court agreed with the county and district court that the end of a cohabitation lasting nearly 20 years in and of itself does not constitute such an exceptional circumstance. In addition, some additional circumstances would need to emerge, whereby the inheritance contract would the be in conflict with the sense of justice and the values ​​of honest and fair-minded people, the court said.

The panel explained that the testator can cancel the contract if it involved either a significant mistake, an instance fraud, a threat or violence at the time of its conclusion. 

While according to the testator, when signing the contract, he expected the cohabitation to last until death, the court cannot interpret as a mistake if a person's expectations for the future remain unfulfilled.

The Supreme Court also drew attention to the fact that a notary involved in drafting an agreement has an important role to play given the nature and specifics of the inheritance contract.

They must negotiate with both parties to the contract, explain its consequences to them and, where necessary, warn against potential, reckless actions.

When certifying an inheritance contract, the notary must explain to the parties what its advantages and drawbacks are, as well as alternative ways to determine the fate of one's property in the event of death. 

Among other things, the notary should draw attention to the fact that the options for unilateral change and cancellation of the inheritance contract are extremely limited compared with those relating to a will.

Therefore, the parties should also be introduced to the option of separately agreeing on the rights and conditions of withdrawal from an inheritance agreement.


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Editor: Andrew Whyte, Urmet Kook

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