Introduction to inheritance law in Sweden.
Who inherits who in Sweden? What are the most important things to remember about Swedish inheritance law? In this article, I will try to give you an introduction to this subject.
Part 1 – some practicalities
As a lawyer working with inheritance law, I would like to tell you about a few cornerstones of inheritance law in Sweden that you should keep in mind. But let me first write about some concepts or definitions that are essential for us. When a person passes away in Sweden, a legal entity is formed called an estate (dödsbo). The estate consists of all assets and liabilities of the now deceased person. Just like a company or enterprise, the estate needs representatives. The representatives are defined by law to be the heirs (or heiress) of the dead person (dödsbodelägare).
The representatives are obliged to administer and manage the estate. In the past, when there was still inheritance tax, this management could go on for many, many years for tax purposes. Nowadays, when there is no inheritance tax, the mission for the representatives is usually to close the estate and divide the assets between them. I must add that, of course, when a person passes away, the relatives of the deceased person usually do not think in terms of him or her becoming a representative of a legal entity. But that is what they are, and it might be a bit easier to understand the Swedish inheritance law with all that in mind. Put into an example, a common question is “Who pays for the funeral?”. Well, the representatives might arrange the funeral, but since they act as representatives for the estate, it would be the estate that should ultimately pay for it.
Besides arranging the funeral and a few other practical things, the representatives are now obliged by law to make an identification document for the estate (bouppteckning). This is usually where I am contacted by the representatives.
What is the bouppteckning?
The bouppteckning is a valuable document that works as an identification for the estate regarding its representatives (the heirs) and its total assets and debt. It is important to remember that the bouppteckning only identificate the heirs and which assets they can claim, it is not the actual distribution of the assets. The bouppteckning must be made within three months after the death and sent to the Tax Office (Skatteverket) within one month after it was made. The Tax Office will then inspect the document and its accordance with several requirements by law that have to be met, and then either reject or approve it. If it is approved, the representatives can use it as the legal ground for claiming the assets of the estate.
Somewhere around here, trouble sometimes emerges. To claim assets of the estate (which is to claim assets from the dead person), all representatives must come to an agreement about the distribution of the assets (arvskiftesavtal). There is no authority that controls the accuracy or justice of such agreement. Thus it is totally of private manner and could therefore also contain conditions that disbenefit one or several heirs. Let me give you a very simple example.
Person A has two children, B and C. When A passes away, according to Swedish law, both B and C are heirs, and thus representatives of the estate mentioned above. After the funeral and the bouppteckning is made, what is left is 100.000 Swedish kronor (SEK) in total assets. According to Swedish law, B and C would now divide the assets in two, 50.000 SEK each, and sign an agreement regarding this. But since the agreement is of private manner, B and C could agree on any other condition if they wish.
Of course, if B proposes that the distribution should be 90.000 SEK for B and 10.000 SEK for C, it is obvious that the proposal is unfair amongst C. But trust me, this happens, a lot.
Part 2 – who inherits who
Swedish inheritance law is based on family bonds, where relatives are divided in three categories (arvsklasser) defined by law. If there is anyone alive in the first category, no one from the second or third category will inherit. Thus for a person in the third category to inherit, there can’t be anyone alive in the first or second category.
Category 1 – children (equal shares) or children’s children (grandson or -daughter) if a child is dead, or great grandson or -daughter if even the grandson/-daughter is dead, and so on (bröstarvingar).
Category 2 – parents (50% each), and if one parent is dead, his or her children will inherit instead (the sister and brothers of the deceased).
Category 3 – grandparents, and if a grandparent is dead, his or her children (uncle and aunts). Cousins do not inherit.
Let’s go back to the example above. A has two children, B and C. These children will be the first to inherit, if they are alive. If C is dead, B will inherit all instead, as long as C did not have any children. If C had two children D and E, they would take C’s share of the inheritance (in this case B gets 50%, D gets 25% and E 25%).
We only look at the next category of relatives if, let’s say, A did not have any children at all.
Now of course, there are no rules without exceptions. If A was married to F, they would first have to do a split of all assets (bodelning). The wife or husband F would then inherit all assets from A even if they had children in common. But that doesn’t actually mean the children do not inherit at all, just that they will have to wait for their inheritance until the husband or wife F is also dead. If A had children from a previous marriage or relationship (särkullbarn), those children do not have to wait for their inheritance though. A domestic partner has the right to make a split of assets but does not inherit.
Inheritance could also be affected by a testament and different marital settlements, but I won’t dive that deep into Swedish inheritance law this time.
Part 3 – what can we learn
Remember I promised to tell you a few cornerstones of Swedish inheritance law? I will now try to summarize the most important things of the above for you.
- When a Swedish citizen passes away, the nearest relatives are obliged to make a bouppteckning. If you are a relative to the deceased and one of the nearest to inherit according to Swedish inheritance law, it is essential for you to be mentioned in this document.
- The estate (assets and liabilities) of the deceased person is managed by the heirs or heiresses together.
- Never sign an agreement about distribution of assets (arvskiftesavtal) if you are not sure about its accordance with Swedish inheritance law. My honest and sincere advice is to contact a lawyer before signing anything.
- There’s no inheritance tax in Sweden. However, selling company shares or real estate could trigger tax on capital gains.
- The children of a person are always the nearest to inherit in Sweden. But if the deceased was married, the children will have to wait for the actual inheritance until the husband or wife has passed away as well. This is based on proportions rather than an actual sum, so at the time the children finally inherits, the worth of the inheritance may have declined (or increased).
- All relatives in the nearest inheritance category have the right to inherit. Swedish inheritance law makes no difference between gender, age or similar.
- A domestic partner does not inherit.
Now let me finish this article by telling you that about 40% of the adult Swedes are married. Every year, about 40.000 couples become husband and wife, but also roughly 25.000 couples are going through a divorce. Domestic relationships, with or without children, are very common in Sweden as well, and so are relationships where one or both partners have children from before.
This means there are plenty of combinations of inheritance situations.
I am glad to help you in every way I can, so please feel free to ask any questions. See contact information below.
Best Regards,
Emil Classon
Lawyer
E-mail: emil@emvaldjuridik.se
Phone: 0046 (0)10-145 08 80
Emvald Juridik AB
www.emvaldjuridik.se
Note: the article is meant to give you an introduction to inheritance law in Sweden. It should be seen only as guidance, and it may or may not be correct in all situations. Feel free to ask me if you have any questions.