Inheritance Law – Postpone the Estate Settlement and Retain Security

When a spouse dies, the surviving spouse faces many choices – both emotional and financial. One of the most important choices is whether to settle the inheritance immediately or to exercise the right to defer settlement.

Below you will find a short and easy-to-understand overview of what a right of survivorship is, who can use it, and an overview of the advantages and disadvantages.

Hva er et uskifte?

The right of undivided inheritance means that you, as the surviving spouse, can postpone the distribution of the inheritance to the children. Instead, you take over the deceased's estate undivided, and continue to arrange assets and finances much the same as before. The transfer (the final inheritance settlement) happens later – often when you pass away yourself.

The scheme allows you to:

continue to live in shared housing

behold the household contents, car and other possessions in the estate

managing the economy in daily life

This happens without distributing assets to the heirs immediately

You still do not get «final» ownership of everything after the deceased – you manage the inheritance on behalf of the heirs until the estate is settled.

Who can use the right of usufruct, and can it be denied?

The rules of undivided estate are primarily made for spouses. To be able to reside in an undivided estate, you must, among other things:

been married

in principle, have joint ownership (what you own together / which will be divided in case of divorce or death)

not be left in joint ownership from before

If you have separate property, can the surviving spouse remain in undivided estate with the separate property if it has been agreed in a prenuptial agreement that undivided estate should apply to these assets. If you receive a gift or inheritance, a donor or testator can grant the right to remain in undivided estate with what you receive. The heirs can also consent.

If there are deceased children from a previous relationship (stepchildren), as the surviving spouse, you only have the right to inherit without an immediate division of assets (uskifte) if the children in question consent. This follows directly from the Inheritance Act.

Even if the conditions are otherwise met, a renunciation of inheritance may be refused if:

your debt makes it significantly more difficult for the heirs or the deceased's creditors to get satisfaction, or

you have previously behaved in a blameworthy manner and caused yourself or others significant financial loss, such that you are not considered fit to responsibly manage the joint estate.

These are typical cases where the district court can refuse to let the estate remain undivided and require the estate to be settled.

There are specific, more limited rules regarding inheritance and the right to remain in joint ownership for certain cohabiting couples with common children, but the arrangement is considerably narrower than for married couples. The rules concerning a cohabiting partner's right to remain in joint ownership can primarily be found in sections 32 to 39 of the Inheritance Act. This article is based on married couples – cohabiting couples should have their individual situations assessed specifically.

Advantages of remaining in joint ownership (of an estate)

For many, not dividing an estate is experienced as a practical and safe solution:

Home security

You can normally continue to live in the shared accommodation, with furnishings and other belongings, without having to «buy out» the children or other heirs immediately.

2. Less pressure in a difficult time:

You avoid an extensive estate settlement in the midst of the grieving process. This allows you space to make difficult choices once everyday life has stabilised.

3. Flexibility over time:

As a general rule, you can remain in joint ownership for life, but you can also choose to divide at any time later.

The right to an undivided estate may be lost, a typical case being if you remarry.

Disadvantages and typical pitfalls

Inheritance is not always the best solution. Some disadvantages are:

You are taking over the deceased's debts.

By taking over the estate undivided, you as the surviving spouse become responsible for the deceased's obligations (debts). If the deceased had significant loans or unknown debts, an undivided estate can become a financial burden. Always investigate the deceased's finances before establishing an undivided estate.

Restrictions on proprietary rights and prohibition of gifts

Although in practice you have authority over the joint estate as if you were the owner, the Inheritance Act sets limits – including for significant gifts and transfers that could harm the heirs« interests. You cannot make a gift that is »disproportionate to the estate's assets". This can have consequences for the joint estate and later create conflicts.

Gifts, inheritance or insurance payouts enter the joint estate

Essentially, everything the surviving spouse/partner acquires goes into the joint estate. This also applies if one receives an inheritance, gift, or life insurance payout. Unless the division of the estate is requested within three months of receiving the assets.

Children from previous relationships and risk of conflict

The Inheritance Act Committee has pointed out that remaining in joint ownership with children from a previous marriage often leads to long-lasting conflicts: the relationship between the surviving spouse and the children from a previous marriage is often more vulnerable, and dispositions made during the period of joint ownership can be monitored with «Argus's eyes». In such cases, a direct inheritance settlement may be preferable to joint ownership that lasts for many years.

Many believe that not settling an estate is always an advantage for the survivor, but this is not always the case. Not settling an estate can be particularly disadvantageous when the deceased's estate is small, and you would inherit most of it anyway through the spouse's minimum inheritance.

The same applies if you are relatively young, with limited funds and high debt – then a division of the estate can provide a better financial fresh start. In addition, you avoid having to divide it later if you wish to establish yourself with a new partner. If you haven't divided it immediately, you risk having to divide it at a time when the values may have become considerably higher.

How can we help?

A will can provide security and peace of mind during a difficult time, but the arrangement is not suitable for everyone. Especially if there are children from a previous marriage, separate property, complex finances, or significant debt, the choice should be carefully considered.

If you would like an assessment of whether settling an estate without inheritance is the right solution in your situation – or help with a prenuptial agreement, will, or the application for settlement of the estate itself – you are welcome to contact us for more information or assistance.