Inheritance with Debts: Rights, Obligations, and Limits of Liability

Ukrainian legislation provides that after a person’s death, heirs inherit not only assets but also the deceased’s debts, including loan obligations, alimony arrears, utility debts, court-ordered liabilities, and other obligations. The estate includes all property owned by the deceased on the date of death: movable and immovable property, cash, deposits, as well as debt obligations.

The debts of the deceased often become an unpleasant surprise for heirs who expected to receive an apartment, a car, or a country house, but did not anticipate becoming debtors in place of the deceased. The law does not allow partial acceptance of an estate or refusal of only its debt portion.

An heir does not acquire the deceased’s property as such, but rather the rights and obligations that did not terminate at the time the estate was opened. The only exception applies to obligations of a personal nature. Pursuant to Article 608 of the Civil Code of Ukraine, an obligation terminates upon the debtor’s death if it is inseparably linked to the debtor’s personality and therefore cannot be performed by another person.

How to Check Whether the Deceased Was a Debtor

– Check on the website of the Judiciary of Ukraine whether the deceased was a party to court proceedings. The search is carried out under the “party to the case” option by entering the deceased’s full name.

– Check for the existence of enforcement proceedings against the deceased.

– Check whether the deceased is listed in the Unified Register of Debtors.

The Scope of Debt Obligations

The obligation to repay debts is imposed on the heir only within the value of the inherited property received. Under current Ukrainian law, creditors’ claims may not exceed the value of the inherited property and may be satisfied solely within the limits of that value.

Important to know! By accepting the inheritance together with debt obligations, the heir is required to repay the principal debt and interest, if the obligation involves a bank loan. Importantly, interest accrues not from the date the inheritance is accepted, but from the date the estate is opened — that is, from the date of the decedent’s death. Failure to perform these obligations may result in interest being charged and recovered from the heir.

Time Limits for Creditors’ Claims

According to Article 1281 of the Civil Code of Ukraine, a creditor of the deceased must present claims to the heir:

– within six months from the date the heir receives the certificate of inheritance;

– within six months from the date the creditor became aware of the acceptance of the inheritance or the issuance of the inheritance certificate to the heir.

If no claims are made within these time limits, the creditor loses the right to demand fulfillment of the obligations from the heir.

As of February 24, 2022, martial law has been introduced in Ukraine. Pursuant to paragraph 3 of Resolution of the Cabinet of Ministers of Ukraine No. 164 of February 28, 2022, “Certain Issues of Notarial Practice under Martial Law,” the running of the term for accepting or refusing an inheritance is suspended for the duration of martial law, but for no more than four months. The certificate of inheritance is issued to heirs after the expiration of the period for accepting the inheritance.

The deceased’s outstanding debts may be recovered from heirs who have accepted the inheritance through court proceedings. Limitation periods for creditors’ claims against the deceased continue to run in the same manner as prior to the opening of the inheritance.

Action Plan if You Intend to Accept the Inheritance and Settle the Debts

1. Obtain the death certificate of the deceased.
2. Notify the creditor of the debtor’s death and provide a copy of the death certificate.
3. File an application with a notary to accept the inheritance.
4. After six months from the date of death, formally enter into inheritance rights.
5. Settle relations with the creditor — repay the debt in a lump sum or agree on a repayment schedule.
6. Following the year in which the inheritance was accepted, file a tax declaration and pay inheritance tax.

Pursuant to Part 1 of Article 1268 of the Civil Code of Ukraine, an heir under a will or by law has the right to accept the inheritance or to refuse it. If the debt obligations exceed the value of the inherited property, it is advisable to refuse such inheritance.

Action Plan if You Choose Not to Accept an Inheritance with Debts

1. Submit a statement of refusal of the inheritance to a notary at the place where the inheritance is opened.
2. If a creditor presents claims, inform them of your refusal and advise them to contact the notary’s office to confirm this fact.