What happens to your property when you die?
A will is a document that takes effect only after the death of its maker. Death is one of those things that people don’t want to think about, and they don’t want to make plans or arrangements for it in advance. However, it is an event that everyone will face, often without warning. It is sensible to prepare for the worst, even though it might be easier to avoid thinking about the matter altogether.
Are you creating a will?
Contact us to ensure that your will meets the legal requirements and that the content is exactly as you want it to be.
The most important thing is that you have the ability to influence how your property will be distributed after your passing. Creating a will is advisable when you are still capable of making decisions for yourself. This way, you can determine who will receive your property. With the guidance of a lawyer, you can ensure that the content of the will aligns with your wishes and meets the legal formalities. A well-drafted will can also positively affect inheritance taxation for the benefit of your heirs. A properly executed and properly stored will ensures that the deceased’s final wishes are carried out.
The maker of a will can modify it as many times as desired during their lifetime. Legal regulations grant certain inheritance rights to direct descendants (such as children), which should not be restricted by the will. Otherwise, the property can be freely distributed according to your own wishes. However, distributing property more equally among siblings can reduce potential inheritance disputes.
Advance inheritance is a good option for distributing property before passing away. However, it’s not necessary for every child to receive all types of property. For instance, if one child continues running a family business, monetary compensation can be designated for other children. To avoid confusion and future disputes, prior wills should always be revoked with a new one. A well-crafted and appropriate will is the best preventive measure against later disputes among heirs regarding the deceased’s property. In the worst case scenario, the deceased’s property might be consumed by inheritance conflicts.
Donating Through a Will
Did you know that through a will, you can leave a portion or the entirety of your property to one or several charitable organizations? Prior to making such a decision, you can explore the websites of different charitable organizations to learn about their activities and gain insight into how testamentary donations are utilized. This way, you can gather information and consider whether the organization’s values and methods align with where you would like your assets to go. It’s important to carefully consider and specify the charitable organization, and perhaps any regional restrictions, to ensure that your property goes towards the intended purpose.
Don't have a child? Create a will and decide where you want to allocate your assets.
If you do not have children, you are free to determine who you want to leave your property to and under what conditions. Childless individuals do not need to consider issues such as the legal share (lakiosa) impact on the content of the will.
However, please remember the following:
- In a simple will for a childless individual, you will name one beneficiary who will receive your property after your death. Consider what happens if this beneficiary has already passed away at the time of your death.
- Take care of the taxation aspects. Taxation can be substantial, as the 2nd inheritance tax category is often applied. For example, if you leave a cottage, there might be a significant tax liability, so consider whether the recipient has the ability to pay the tax.
- If you are married, your will cannot violate the statutory spousal inheritance rights (avio-oikeus). First, consider how the marital property division (ositus) will be conducted, and then you will know what you can bequeath.
If you do not create a will, your estate might go to the state.
- If the deceased has no heirs such as children, grandchildren, spouse, parents, siblings, or their descendants, and no siblings of parents either, the inheritance can go to the state. According to the law, in certain situations, the inheritance may go to so-called secondary heirs instead of the state. Therefore, it is crucial to plan and create a will well in advance. Please note that cousins do not inherit!
Are you considering a will? First, decide on these!
- Who do you want your property to go to?
- Who gets what and how much?
- Should a life interest or ownership be considered?
- If the person doesn’t want your property or they pass away before you, who should it go to then?
- What happens to your property after the death of the will’s recipient?
- Do you want the recipient’s spouse to have marital rights to your property?
- Where do you live? Which country’s laws do you want to be followed for inheritance purposes?
Inheritance: Facts about Will
A will is a strong document when made correctly and carefully. In such cases, it is difficult to overturn. The will should reflect your life situation and your wishes. To ensure that your will is tailored specifically to you, it’s advisable to seek the assistance of a lawyer when drafting it. A will that suits one person may not necessarily be suitable for another due to different life situations and assets.
Did you know
- Without a will, the surviving spouse does not inherit automatically
The surviving spouse does not inherit from the deceased spouse if there are children. However, the position of the surviving spouse is protected by the law, and a prenuptial agreement limits it. Without the right to inherit, the surviving spouse will receive nothing if the deceased had a child or children. Nevertheless, the law provides a so-called minimum protection, and the surviving spouse is granted certain rights to continue living in the couple’s last shared home and to manage the normal household items there. This does not apply to a summer cottage or a secondary residence. Through a will, the right to sell and exchange the shared home can be granted.
- Enhancing the protection of the surviving spouse
A will can expand the minimum protection provided by the law. A prenuptial agreement and the right to inherit do not restrict the right to make a will. Spouses can make a mutual will, or each can make their own will.
- Often, mutual wills made between spouses are testamentary dispositions of usufruct. In such cases, the will grants the surviving spouse the right to usufruct over specific property, while ownership of the property goes to someone else, usually deceased children. The surviving spouse can also be granted the right to sell the shared home and exchange it for a smaller one.
There are many different variations of wills
A will usually grants the surviving spouse ownership of the entire estate or a portion of the deceased spouse’s property. It can also specify who will inherit the property after the surviving spouse. In practice, mutual wills made by spouses often combine ownership rights and usufruct rights to different assets.
Usufruct rights affect the amount of tax
The surviving spouse’s usufruct rights reduce the amount of inheritance tax payable to the heirs. A usufruct will provides the opportunity to grant the surviving spouse rights to, for example, manage a summer cottage or receive rental income from an investment property. In inheritance taxation, an heir who receives ownership rights is taxed based on the estate inventory value of the inherited property, and the usufruct deduction is made according to the tax authority’s guidelines.
6 sensible moments to make a will:
When you are already 18 years old and have accumulated assets
If you are in a cohabiting relationship or a long-term partnership, as the legal position of an unmarried surviving partner is weak
If you are in a stepfamily, as the long-standing law does not account for life situations that deviate from the nuclear family model
If you have no direct heirs but have close individuals in your life
If you own a business and want to ensure its continuation
If you want to engage in inheritance tax planning