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An analysis of the rules on blocking and unblocking the deceased’s bank accounts and assets in a succession, in the light of the principle of hereditary seisin.
By a judgment of 24 June 2019, the French-speaking Court of First Instance of Brussels examined the blocking of bank accounts in a succession. The Court held that the Bank had committed no fault in blocking the assets and accounts and refusing to unblock them, as it considered it did not hold a valid certificate of inheritance designating the heir who claimed the seisin of the succession.
The legal framework applicable to blocking bank accounts
Obligation to block the accounts and freeze the deceased’s assets. On a death, the bank holding the deceased’s assets must be notified as quickly as possible by one of the heirs. As soon as the Bank receives this notification, it is immediately required to block, temporarily, the deceased’s bank accounts and safes. Unblocking is subject to certain formalities (see below). Once aware of the death, the Bank must also draw up a list of all the deceased’s assets at the date of death and communicate their amount to the administration in charge of examining the succession. Freezing the assets and blocking the accounts is justified by prudence and security, to avoid a possible withdrawal of funds without the heirs’ consent. In principle, the Bank can no longer authorise withdrawals until the heirs have been established. The accounts, though blocked, may still be credited by new deposits. Above all, this blocking is necessary so that the administration can check whether the deceased and/or the heirs have any unpaid tax or social debts.
Formalities for unblocking and the certificate of inheritance. This blocking obligation stems from articles 1240bis of the Civil Code and the programme laws of 29 March 2012 and 22 June 2012, which define the arrangements for unblocking to the possessors of the succession. Under article 1240bis, para. 1, save contrary legal provision, a good-faith debtor releases a deceased’s assets with discharging effect only if this is done to or on the instruction of the persons designated by a certificate or deed of inheritance, or of a judicial agent, upon presentation of a certificate of inheritance drawn up by the competent office of the General Administration of Patrimonial Documentation, or a certificate or deed of inheritance drawn up by a notary. Article 160, para. 1 of the programme law of 29 March 2012 adds that, on pain of being personally liable for the payment of the debts notified under article 158, whoever releases a deceased’s assets under article 1240bis may do so with discharging effect only if it clearly appears from the certificate or deed of inheritance that no notification within the meaning of article 158 has been made. Combining these provisions, to unblock the funds banks must know who the heirs are and await the production of either a certificate of inheritance issued by the receiver of the Legal Security Office, or a deed of inheritance drawn up by a notary. These documents state the deceased’s identity and who the successors entitled to the assets are, and in what proportions.
Details required in the certificate or deed. But the Bank cannot be content with this: the certificate or deed must specify that no notification of tax or social debts of the deceased or the heirs has been sent by the tax administration within the legal period of 12 working days after the administration was informed of the death. In other words, the administration has 12 days to investigate possible tax and social debts. The accounts may only be unblocked once the Bank is certain there are no debts of the deceased or the heirs. If there are debts of either, they must be settled before the Bank can be asked to unblock the assets.
Practical consequences and the Bank’s liability for unauthorised unblocking
Financial institutions would incur liability towards the State if they released funds linked to a deceased or an heir without first ensuring they owe nothing to the Treasury; they could have to bear the tax and social debts themselves. It is not for the banks to examine the merits of a notary’s or the Legal Security Office’s instructions: unable to assess who the true entitled parties in the certificate or deed are, they must be able to rely on the public officer’s instructions. Only when the Bank has received clear instructions from a valid deed or certificate of inheritance, ensuring the release from notifications of any existing debts, may it release the funds and contact the heirs for their instructions on liquidating the assets.
Going further: taking possession and the principle of hereditary seisin
The legitimate heirs, generally the deceased’s descendants, have, by the mere fact of the death, the seisin of all the assets forming part of the deceased’s succession. This principle of hereditary seisin is established by article 724 of the Civil Code, which, without defining seisin, provides that the heirs are seised as of right of the deceased’s assets, rights and actions, subject to the obligation to discharge all the charges of the succession. Although seisin is not defined in the law, nor are its consequences, it is commonly accepted that heirs are put in possession of the assets ipso iure: they have a right to take possession of all the succession’s assets by the mere fact of the death, without any act of apprehension or holding being necessary. The heirs benefiting from seisin may therefore, from the day of death and without any formality, collect and take possession of the succession’s assets for their temporary conservation and management. The purpose of seisin is to avoid a gap in the possession of the deceased’s patrimony during the period between the opening of the succession and its acceptance. This taking of possession is independent of the heirs’ will to accept or renounce the succession.
Distinction between seisin and the right of ownership. Seisin must be clearly distinguished from the acquisition of ownership. While acceptance of the succession confers ownership of the deceased’s patrimony, seisin only allows a right to take possession of the assets. Thus, if an heir later renounces the succession, he loses the rights that taking possession had conferred. This faculty of the legitimate heirs to take possession without formality contrasts with the formalities of sending into possession applicable to universal legatees, who cannot take possession of the succession’s assets without prior formality: they must bring proceedings before the President of the Family Court for a judicial review of the wills’ validity. In certain situations the Bank may thus require, in addition to the deed or certificate of inheritance, the production of an order sending the person into possession of the deceased’s assets.
The impact of the unblocking formalities on the rules of hereditary seisin. Since it follows from hereditary seisin that heirs can take possession of the succession, and therefore of the bank accounts, one must not mistakenly consider that the blocking of accounts and the legal unblocking formalities therefore breach the principle of seisin. Indeed, seisin cannot be understood as ordinary possession in property law, which implies corpus and animus. Seisin is a right to possession even before any material act of possession, allowing the heir who can rely on it to be legally considered a possessor and to benefit from possessory protection without ever having possessed before and without even currently possessing. Thus, seisin as a right of provisional possession does not allow possession in itself, but a legal authorisation to possess, whereby the seised heir need neither actually take possession nor prove his intention to possess. It is in reality a legal anticipation of the effective possession of the heirs benefiting from seisin. In this way, when financial institutions block bank accounts because they are obliged to, they do not call the principle of seisin into question, but that seisin can only truly take material effect once all the legal unblocking obligations and formalities have been respected. This broad meaning of seisin is the one that seems to apply, as illustrated by the judgment of 24 June 2019.
Conclusion
The deed of inheritance, to which the notary generally attaches an extract of the death certificate, informs the financial institutions of the deceased’s succession devolution and is of capital importance, since the release of the assets in the accounts or safes is conditional on its production. As a reminder, this deed or certificate must state that no tax and/or social debt of the deceased or the heirs is to be reported. Once the Bank has received the deed or certificate containing such a statement, it is free to unblock the funds without incurring liability. In the meantime, a bank’s refusal to release the assets without a valid deed of inheritance cannot be understood as breaching the rules of hereditary seisin.
This article is a translation and a condensed version. Only the French version is authoritative. It is provided for information purposes and does not constitute legal advice.
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