What to Do When There Are No Funds for a Compulsory Portion?

Inheritance is a topic often associated with strong emotions. On one hand, there is the awareness that the deceased has left behind an estate, while on the other, issues arise concerning its division. It is quite common for a situation to occur where one heir, by virtue of the division of the estate, receives a specific item, such as real estate, and the others are entitled to compensation. But what should be done when it turns out there is a lack of funds to satisfy the heirs? Has the legislator provided any solution in such a situation? What steps should an heir take who wishes to keep the apartment but cannot afford to settle with the rest of the family?

Is there an obligation under Polish law to compensate heirs?

By virtue of inheritance, each legal successor of the deceased acquires a share in the entire estate, understood as the totality of rights and obligations belonging to the decedent at the time of death. Therefore, if, for example, the estate includes an apartment, a car, and jewelry, and there are four heirs, each is entitled to a ¼ share in each of these items.

Importantly, only through the division of the estate—either by agreement or by court order—can a specific person become the sole owner of, for example, an apartment. In such a case, they are obliged to settle with the other heirs through compensation payments. This often involves a significant financial burden.

Who might be affected by the lack of funds to compensate heirs?

The lack of funds to compensate heirs most often arises in situations where:

• the estate includes a very valuable asset, such as a house or a luxury car,
• one of the heirs wishes to retain such an asset, refusing to agree to its sale and the division of the proceeds,
• other heirs demand compensation, and the individual lacks the funds to pay their shares.

This often leads heirs to ask: what is the deadline for compensating the estate, and what if the individual lacks the funds to pay the shares of the other heirs? Unfortunately, the answer is not always straightforward.

What are the deadlines for compensating the estate?

The deadline for compensating the estate depends on how the division of the estate is carried out by the heirs:

• contractual division of the estate – the heirs, acting in agreement, independently establish a payment schedule through a concluded contract, allowing the obligation to be spread over convenient installments over several years,
• judicial division of the estate – in the decision on the division of the estate, the court, when awarding a specific item belonging to the estate to a particular heir, may specify the deadline and amount of compensation payments. The court considers the financial and earning capabilities of the heir obliged to make the payments. Importantly, if payments are spread over installments, their deadlines cannot exceed ten years in total. Simultaneously, in the absence of an agreement, the court may order the sale of estate items and the division of the proceeds among the heirs.

Where to find funds for the reserved share?

Heirs often ask where to find funds for the reserved share. In such a situation, a person who has inherited the estate but does not have free financial resources to pay the entitled parties has several options:

• taking out a loan – the most commonly chosen solution by heirs, particularly involving taking out a mortgage loan secured by a mortgage on the inherited property,
• selling the inherited assets – allows for obtaining funds that can then be used to settle the reserved share,
• reaching a settlement – sometimes those entitled to the reserved share agree, through a concluded agreement, to spread the payment over installments or postpone the payment deadline, knowing that the other party genuinely intends to pay them,
• family support – some heirs may rely on assistance from family members in paying the reserved share, who provide them with private interest-free loans or make monetary donations.

What to do when there is a lack of funds to pay the reserved share?

The claim for a reserved share belongs to descendants, the spouse, and the parents of the decedent who would be called to the estate under the law, who were omitted in the will or received less than what is stipulated by inheritance laws. Inheritance matters can thus be complicated even when the decedent has left a will.

When a person inherits the entire estate and another family member demands payment of the reserved share, the heir may be obliged to pay often substantial amounts. If there are no funds to pay the reserved share, they may attempt to:

• reach an out-of-court settlement and spread the payment of the reserved share over installments,
• during court proceedings, request a deferral of the reserved share payment or its division into installments,
• sell the inherited assets or take out a loan to obtain the necessary funds to pay the reserved share.

The failure to amicably pay the reserved share to the entitled person may result in them initiating court proceedings with a claim for payment. If the court grants the payment claim, the person entitled to the reserved share may then refer the matter to a bailiff.

What are the consequences of failing to compensate heirs?

The failure to compensate heirs, without attempting to reach an agreement with the other heirs, leads to:

• family conflicts,
• court cases concerning the division of the estate or payment of the reserved share,
• bailiff auctions of real estate,
• falling into debt.

As a result, it is crucial not to avoid the obligation to compensate heirs by pretending the problem does not exist. It is necessary to initiate negotiations as soon as possible and seek realistic sources of financing for the heirs. In such matters, a lawyer in Gdańsk can assist, safeguarding the client's interests at every stage of the proceedings. The lack of funds to compensate heirs and creditors is a problem that can be resolved through available legal and economic means.