In Luxembourg, French and Belgian law, concealment is a civil wrong that the law has instituted in matters of inheritance and community property in order to dissuade joint owners from concealing, deflecting or misappropriating undivided values in fraud of inheritors’ rights. [1]
Indeed, during the opening of an inheritance, some successors omit, intentionally or not, to mention some donations or liberalities made by the deceased before his death.
Article 792 of the Luxembourg Civil code provides that « the successors who could have diverted or concealed the effects of an inheritance, are deprived of the right to renounce to it ; they stay purely and simply successors, notwithstanding their renunciation, without being able to claim any share in the diverted or concealed objects. »
Thus, successors who employ manoeuvres to break the equitable sharing, are accused of inheritance concealment.
Cumulative conditions
In order to characterize inheritance concealment, two elements are required:
- • Material element
Inheritance concealment can be both a positive or negative manoeuvre. Indeed, the misappropriation or dissimulation of a property or claim of the deceased person can characterize concealment, as does the non-return of a property, a donation or a liberality made before his death.
In addition, we can add that the case law has clarified that inheritance concealment could be qualified by a simple lie or silence, with the aim of omitting the truth and leaving the joint owners in the ignorance of the real inheritance mass. 2 [2]
For example, it may be the withdrawal of sums from a bank account, retention of property under a loan agreement or even the presentation of a false testament.
Finally, the concealment materiality is proven by all means. [3]
- • Moral element
Here we are talking about the intentional element. It will be characterized as soon as the intentional wish to cheat and create inequality at the joint owners’ expense is established. It is necessary that the inheritor is aware of violating the joint owners’ rights.
In theory, the inheritance concealment characterization is quite complex as the alleged dissembler can always say that the intentional element is not characterized. Indeed, a simple citizen/individual is not necessarily supposed to be a specialist in inheritance law and may therefore argue that he was not aware of the obligation to report to the inheritance all donations or liberalities made before the death.
Also, if he demonstrates his good faith by reporting, spontaneously and prior to the proceedings, the object of concealment to the inheritance, the Court of Cassation ruled in a judgment of March 24, 2004 that "any repression of inheritance concealment is stopped if the concealer spontaneously returns, before being prosecuted, the objects he entertained or concealed. ".
This form of mea culpa of the alleged dissembler would then go against the intentional element required to characterize inheritance concealment.
Mainly, the sovereign assessment of the trial judges will be decisive here for the characterization of the intentional element.
The person who invokes the inheritance concealment has to prove it.5 Here it is interesting to raise the question about banking secrecy.
Indeed, can someone suspecting inheritance concealment ask to obtain the bank statements of the deceased?
The answer is yes, but only if the suspicious person is himself an inheritor. Indeed, the inheritor took the place of the deceased in his rights, so he is allowed to ask the bank for a copy of the bank statements in order to retrace the transaction which he suspects to be the object of concealment.
Effects of an inheritance concealment characterization
When the two cumulative conditions are met, the dissembler doesn’t lose his status as inheritor, but is subject to a double sanction.
First, the dissembler is imposed the status of pure and simple acceptor of the inheritance. This assumes that he accepts both the assets and the liabilities of the estate. Thus, this inheritor will be liable for the debts of the estate, while he could have accepted the estate under benefit of inventory, a useful option when faced with a potentially loss-making estate.
Secondly, the concealing inheritor must return the object of concealment to the estate. He is deprived of all his rights in the concealed property. Obviously, this second sanction doesn’t apply in the case where the concealing inheritor is the only one to inherit.
Case of defect of consent
Here the question arises of inheritance concealment based on a defect of consent. It is, for example, a donation made by the deceased before his death under the coercion of the concealing inheritor, or the abuse of weakness.
In this case a penal action can be coupled with a civil action particularly in the violence cases or abuse of weakness. However, regarding the French adage " the criminal law has precedence over the civil law ", the criminal action will suspend the civil action.
Therefore, it’s always appropriate to assess the probability of success of the criminal action before introducing it, at the risk of seeing the legal proceedings extend over time with a disappointing result.
Liability of the notary
What about the liability of the notary? Indeed, the notary who is a public officer, has to advise people in civil matters.
Has the notary, who did not inform the inheritor of the obligation to report donations made before the death, failed in his duty to advise?
The question was settled by a judgment of the French Court of Appeal of Basse-Terre, second civil chamber, of October 17, 2016. Indeed, the judges considered that, during the liquidation of an inheritance, the notary has the obligation to inform the inheritors of the obligation to report donations and liberalities received by the deceased before his death.
In order to protect himself, the notary should issue a written document signed by the inheritors stating that they have been informed of this obligation at the risk of seeing their liability incurred.
There can be no doubt that the Luxembourg trial judges, in a similar case, will not rule out a liability action against a notary.
[1] Tribunal d’arrondissement de Luxembourg, 13 octobre 2010
[2] Cour d’appel luxembourgeoise, 16 mars 2011, arrêt civil, Pasicrisie luxembourgeoise, t. 35
[3] Cour de cassation française, première chambre civile, 10 mars 1993
[4] Cour d’appel luxembourgeoise, 24 mars 2004, arrêt civil, 7éme chambre, n°26808 du rôle
[5] Cour d’appel luxembourgeoise, 20 février 2002, Pasicrisie luxembourgeoise 32, p.213
