When an inheritance is opened, the principle is the equality of sharing between heirs.
Any fraud committed voluntarily by an heir with the aim of breaking the equality of inheritance in his favour will be considered as receiving stolen property.
In order to be established, inheritance fraud requires the combination of two elements:
- A material element: the concealment of an asset or a right part of an estate, breaking the equality of the inheritance distribution; and
- An intentional element: any fraud voluntarily carried out at the expense of the heirs
Concerning the material element, the concealment may concern a right or property forming part of the inheritance assets; the question then arises of the definition of the latter and therefore of the nature of the property and rights subject to declaration.
The Court of First Instance of Monaco recently ruled in a decision of 24 March 2022 that the signing of a contract for the purchase of real estate by only one of the spouses, using the other spouse's own funds without this being mentioned in the deed, increases the value of the estate of the spouse who holds the contract without any consideration, which characterises liberal intent and consequently constitutes a disguised donation.
Consequently, it is mandatory for the spouse holding the said contract to declare this donation, failing which, the balance of the estate is knowingly jeopardised, and the inheritance fraud is established.
As a reminder, in the case of a requalification as a donation, the sums must be returned to the estate in order to reintegrate the inheritance assets.
However, in the event where the inheritance fraud has been established, according to Article 725 of the Civil Code, the author will not only have to return all the goods involved in the fraud as well as their fruits and interests since the opening of the estate, but he will also be deprived of his share in the said goods, which will be entirely allocated to the other heirs. Being ordered to pay damages to his co-heirs is also possible.
In conclusion, although this is a first instance decision, it seems necessary to pay attention to it.
If the will of the Monegasque courts to closely monitor the respect of the balance of the inheritance division makes it easier to assert an heir's rights in the context of a dispute, more attention should also be paid, to be certain to be aware of one's own declaration obligations in the context of an inheritance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.