AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler, Schindler Attorneys
establishment of foundations or well-structured wills to avoid negative effects for the next generation. Austria does not currently levy inheritance, gift or wealth tax, but foreign tax obligations often play a decisive role in estate planning in international cases. 2.3 Forced Heirship Laws Austrian inheritance law contains provisions on forced heirship ( Pflichtteilsrecht ). In principle, the descend - ants of the deceased and the spouse/registered part - ner are entitled to a compulsory share ( Pflichtteil ), which amounts to half of the statutory share. Other rel - atives of the deceased, such as parents (since 2017) or siblings, are not entitled to a compulsory share. The statutory share is calculated by dividing the estate by the number of children of the deceased – eg, in the case of two children, the statutory share is 50% of the estate for each child. The compulsory share would be 25% of the estate. If a child has passed away prior to the testator, they shall be substituted by their own children (ie, the testator’s grandchildren) regarding the respective compulsory share. If the deceased person is survived by a spouse as well as their children, the statutory share is one third for the surviving spouse and two thirds for the children of the deceased – eg, in the case of two children, the statutory share of each child would be one third of the estate, and the compulsory share of each child would be one sixth of the estate. In order to make a specific claim to the compulsory share, one must not: • have renounced the compulsory share ( Pflichtteils - verzicht ); • be unworthy of inheritance ( erbunwürdig ); or • be disinherited ( enterbt ). Renunciation of the inheritance ( Erbverzicht ) in gen - eral leads to the loss of the claim. The renunciation of inheritance may be concluded with effect for the renunciant or with extension of effect to the renunci - ant’s descendants.
The reasons for disinheritance include certain criminal acts of the beneficiary against the deceased and their close relatives, or an offence against the last will of the deceased. The compulsory portion to which the descendants and the spouse or registered partner are entitled may be reduced by a last will. This presupposes that the deceased and the beneficiary of the compulsory por - tion never had a relationship that corresponds to a respective family relationship, or that such a close relationship did not exist for a longer period of time (in the case of a parent-child relationship, according to Austrian court rulings, a period of at least 20 years is required) until the death of the deceased. The compulsory portion may consist of a purely mon - etary claim against the estate or, later, against the heirs, but it may also be fulfilled through the assign - ment of specific assets by the deceased (so it is not a straight cash claim) or through awarding the position of a beneficiary in a private foundation. 2.4 Marital Property Under Austrian law, the principle of the separation of property applies during marriage ( Prinzip der Güter- trennung ), which means that the spouses remain the sole owners of the assets they bring into the mar - riage and acquire during the marriage. Therefore, each spouse may freely dispose of their property during a marriage. In deviation from this general rule, spouses may agree on one of the following different property regimes: • community of property during life, whereby the spouses acquire co-ownership of the joint assets; • community of property on death, whereby the assets remain separate until the death of one spouse; or • community of surplus, whereby the assets remain separate but the surplus is divided equally between the spouses. The amendment of the principle of separation of prop - erty may be concluded in a prenuptial or postnuptial agreement. Regulations regarding the separation of assets in the case of divorce or regulations regard -
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