Everything you need to know about the New Aruba Inheritance Law

Introduction

Aruba has a new Inheritance Law as per September 1st, 2021, which was introduced as part of a refurbished Aruba Civil Code.

The Aruba Inheritance Law (AIL) is regulated by Book 4 of the Aruba Civil Code (ACC) and has been drastically amended. Among others, the surviving spouse is protected under the AIL, whilst the children can be disowned due to the abolishment of the legitimate portion (legitieme portie). Furthermore, certain legal rights are granted to the surviving spouse and children, as well as the concubine if certain conditions are met.

This article is not intended as a deep dive into the New AIL because the changes are too numerous. Only the most important and notable changes are discussed below in a brief and concise manner.

For the purposes of this article, the father is always assumed to be the deceased spouse and/or testator, whilst the mother is always assumed to be the surviving spouse.

Intestate heirs and right of representation

Intestate heirs (erfgenamen uit eigen hoofde)

Under the New AIL, the intestate heirs of the father are successively: 1) the not legally separated spouse and children, 2) the parents and siblings, 3) the grandparents, 4) the great grandparents. The intestate heirs inherit for equal shares.

Right of representation: the descendants

The descendants of the child, sibling, grandparent or great grandparent are called to the deceased father's estate by right of representation (plaatsvervulling) if the aforementioned persons are 'unavailable' at the time of devolvement of the estate (openvallen van de nalatenschap) due to said persons: 1) no longer being alive, 2) having been declared unworthy of receiving the inheritance, 3) having been disowned, 4) having rejected the inheritance or due to expiration of the right to inherit.

The right to inherit reaches no further than blood relatives removed from the deceased father in the sixth (6th) degree.

Abolishment of the legitimate portion (legitieme portie)

Under the Old AIL, the children had a statutory minimum share in the estate of their parents, i.e. the legitimate portion. The legitimate portion was a statutory right (wettelijk recht) of the children that could not be excluded or limited (by testament). A notable change in the New AIL entails the abolishment of the legitimate portion. The abolishment of the legitimate portion makes it possible for parents to effectively disown their children.

The Old AIL: the testamentary Parental Division of Assets

Under the Old AIL, the children could immediately claim their share in the deceased father's estate. In order to protect the mother, the father could stipulate in his will that the mother would receive the assets of his estate, whilst the children would receive a monetary claim against the mother that corresponded to the value of their share in the estate, which became due if certain conditions were fulfilled, e.g. death of the mother.

The above is called the Parental Division of Assets (ouderlijke boedelverdeling).

The Parental Division of Assets is null and void under the New AIL and can no longer be validly stipulated in a will as of September 1st, 2021.

The New AIL: the Legal Division (Wettelijke Verdeling)

The most notable change in the New AIL is the introduction of the Legal Division.

The Legal Division is in fact a codification of the Parental Division of Assets into law (with certain differences): the mother acquires all assets of the deceased father's estate by operation of law, whilst the children acquire a monetary claim against the mother corresponding to the value of their share in the estate (plus legal interest), which becomes due when the mother dies or if she is declared bankrupt.

The mother has full power and authority and, may dispose over the assets of the estate as she sees fit (with certain limitations). The debts of the estate are solely for her account and she is required to pay off these debts. Conversely, the children have no say over assets of the estate and are not liable for debts of the estate.

Applicability of the Legal Division

The Legal Division is only applicable in case of spouses that have biological children together. The Legal Division is not applicable to a stepmother/father, stepchildren or foster children.

The Legal Division is not applicable if there is a will

It is important to point out that the Legal Division is not applicable if there is a will, in which case the division takes place according to the will. However, the father may stipulate in his will that the Legal Division is applicable, whether or not under different conditions or under certain limitations. He may furthermore include the stepchild in the Legal Division.

The undoing of the Legal Division by the mother (ongedaanmaking)

The Legal Division may be undone by the mother within 9 months of the estate having been devolved, by means of a declaration done by notarial deed that must be registered in the estate register (see hereinafter) within the 9 months period. The undoing has retroactive effect. The period of 9 months may be extended by the Court in First Instance at the request of a stakeholder.

Remarriage by the mother: transfer of assets from the estate to the child

In case the mother intends to remarry, the child may request the mother to transfer assets of the deceased father's estate to him to an amount not exceeding the value of his monetary claim against the mother (including legal interest).

The mother retains the usufruct (vruchtgebruik) of the assets, whilst the child acquires the bare ownership of the assets.

The child must inform the other children of the above in a timely manner.

If the child is a minor, then his legal representative may do the request for him after having received approval by the Court in First Instance.

Legal Rights (Wettelijke Rechten)

Whilst the Legal Division is the most notable change in the New AIL, the introduction of Legal Rights of the mother and children is the most important change. The New AIL introduces Legal Rights of the mother and children that cannot be excluded or limited by testament (Article 4:41 ACC). These rights come into play when the Legal Division is not applicable.

I. The Legal Rights of the mother

a. Usufruct of the former marital house plus furniture

If the mother is not the sole proprietor of the former marital house, then she may demand from the children to cooperate into vesting a right of usufruct on the house and furniture for her benefit.

b. Usufruct of other assets of the estate

The mother may also demand from the children to cooperate in vesting a right of usufruct on other assets of the estate (other than the former marital house and furniture) for her benefit if the mother is in need for care (verzorgingsbehoefte). Such is assumed when her average income, minus the costs for living in the house, is lower than the applicable minimum wage. When determining her need for care the following is taken into account: that what she could have received from the deceased father's estate and insurances that became payable due to the father's death.

Short marriages without children and contentious divorce

The Legal Rights mentioned above are not applicable if:

1. The marriage did not last for more than 5 years, without having produced any children (in principle).
2. The father and mother were in divorce (or legal separation) proceedings at the time of the father's death, that started more than a year prior to the devolvement of the estate, and that did not come to a conclusion due to father's death, unless the mother is not mainly to blame for it (for the lengthy divorce proceedings).

Intervention by the Court in First Instance

The Court in First Instance may (among others) end or limit the rights usufruct of the mother to the benefit of a person entitled to the assets on the basis of serious cause and provided the interest of the mother is not seriously affected.

c. Abatement (inkorting) of gifts made by the father to beneficiaries

If the estate of the deceased father is not sufficient to satisfy the right(s) of usufruct of the mother, then she may proceed to abate certain gifts made by the deceased father to beneficiaries. As a consequence thereof, the mother acquires the usufruct of the monetary amount to which the abatement was effectuated. The mother makes a declaration to the beneficiary after which the beneficiary has the obligation to compensate the mother to the amount of the abatement.

The following gifts are subject to abatement:

1. gifts which were apparently made and accepted with the prospect of prejudice to the mother
2. gifts which the father could have revoked at any time during his life or which he declared to be subject to abatement at the time of the gift
3. gifts which were intended to be fully enjoyed only after the father's death
4. gifts which were made within 5 years of father's death

The concubine of the deceased father

The Legal Rights of the mother may (also) apply to the concubine of the deceased father if, immediately preceding his death, they lived together as if they were married for at least 10 years.

Statutes of limitation

The Legal Rights of the mother are subject to certain statutes of limitation that - in some cases - may be extended by the Court in First Instance at the request of a stakeholder.

II. The Legal Rights of the children

a. Lump sum claimable from the joint heirs of the deceased father

The child of the deceased father may claim a lump sum from the joint heirs of the deceased father, in case:

i) this is necessary for his care and upbringing until he reaches the age of 18

ii) this is necessary for his livelihood and study until he reaches the age of 21, which term can be extended until he reaches the age of 25.

iii) in case the child, stepchild, foster child or grandchild has worked in the (grand)father's household or for the (grand)father's company without having received a proper salary.

The following limitations apply to the lump sum:

• The lump sum is not claimable by the child if the mother or a late father's heir has a legal or contractual obligation to carry the costs of living and study of the child (applicable to scenarios i and ii).
• The inheritance or insurance money that the child could have received from his deceased father, are deducted from the lump sum (applicable to all three scenarios).
• The lump sum may not exceed 1/2 (half) of the estate of the deceased father.

The lump sum is paid from the estate of the deceased father. If the estate is insufficient, than furthermore from the gifts made by the deceased father to beneficiaries in the same way as described above (abatement by the mother).

b. Transfer of assets or shares in the deceased father's business or company

The child or stepchild may request the Court in First Instance of Aruba to order a third party to transfer - at a reasonable price - assets of a business or shares in a company to him or his spouse, if the following conditions are met:

• the (step)child or the spouse will continue the business
• the (step)child has serious cause
• the interest of the third party is not seriously affected
• the assets form part of the deceased father's estate or of the dissolved marital community of goods (of the late father and the mother)
• the assets are useful for the operation of the business

In case of the shares in a company (NV, VBA), furthermore:

• the deceased father was a director of the company and held the majority of the shares in the company (alone or together with the other directors)
• the (step)child or his spouse is also a director of the company or will succeed the deceased father in said position
• the bylaws of the company allow the transfer of the shares

The above applies in the same way to the mother if she is the one continuing the business or company of the late father, regardless of her usufruct on assets of the business or shares of the company.

Statutes of limitation

The Legal Rights of the children are subject to certain statutes of limitation that - in some cases - may be extended by the Court in First Instance at the request of a stakeholder.

The Will

Legally valid will

A legally valid will can be made by the testator:

• by notarial deed
• by private deed, signed by the testator and deposited with the notary.
• a "codicil" fully written by hand, dated and signed by the testator in regards to (limitative): a) clothing, personal accessories and certain personal jewelry, certain items belonging to the household and certain books; b) a provision that the items mentioned under a) are not part of a marital community of goods, c) funeral arrangements, d) organ donation.
• an "emergency will" can, under exceptional circumstances, be made by the testator in the presence of a person other than a notary (if a notary is not available), e.g. a lawyer, or a military officer in times of conflict. The "emergency will" should be sent for registration as soon as possible.

Nullification of the will

A will may be declared null and void (nietig of vernietigbaar) in certain cases mentioned in the law. Furthermore, specific stipulations in the will may be considered as not having been written (voor niet geschreven) in certain cases mentioned in the law.

Foundation

The testator may appoint a foundation as his heir or legatee (legataris).

Acceptance of the inheritance

The inheritance can be rejected, or accepted outright (zuivere aanvaarding) or under the benefit of inventory (beneficiaire aanvaarding) by means of a declaration made at the registry of the Court in First Instance of Aruba, which is registered in the estate register. The choice is final, however the heir may change the acceptance outright to acceptance under the benefit of inventory in certain limitative cases (see below).

Acceptance outright

The inheritance can be accepted outright in which case the heir accepts the assets and debts of the estate. The heir may also accept the inheritance outright through his actions, e.g. the conclusion of agreements relating to or the sale of assets of the estate.

If the heir drags his feet, then an interested party may request the Court in First Instance of Aruba to determine a deadline (subject to extensions) for the acceptance or rejection of the inheritance by the heir. If he does not make a decision within the deadline, he is assumed to have accepted the inheritance outright.

Acceptance under the benefit of inventory

By accepting the inheritance under the benefit of inventory, the heir avoids becoming personally liable for debts of the estate. Regarding the acceptance of the inheritance under the benefit of inventory, the following is relevant under the New AIL:

• During the time that the heir has not made a decision, he is assumed to have accepted the inheritance under the benefit of inventory if the other heirs have done same.
• The heir may change an acceptance outright into an acceptance under the benefit of inventory in certain limited cases, among others if he becomes aware of a debt (that he wasn't nor shouldn't have been aware of) after having accepted the inheritance outright. He may then, with the approval of the Court in First Instance, accept the inheritance under the benefit of inventory.
• Only the mother can accept the inheritance under the benefit of inventory in case the Legal Division applies. The children (or the notary) may request the Court in First Instance of Aruba to order the mother to provide security for the fulfillment of her other obligations. The Court determines the amount and nature of the security to be provided.
• Acceptance under the benefit of inventory by one heir makes that all heirs are considered tot have accepted under de benefit of inventory.

No legal requirement to restore gifts under the New AIL

Under the Old AIL, the heirs were required to restore the value of gifts received from the deceased father (inbreng). Restoration only takes place under the New AIL if such is stipulated in the will, or a gift by the deceased father.

The estate notary (boedelnotaris) and the estate register (boedelregister)

The estate notary is involved with the liquidation of the estate and is appointed by the estate executor or the heirs. The exact duties and rights of the estate notary are not defined in the law. It has been decided in jurisprudence that the estate notary does not have the power to dictate how the last will should be interpreted (ECLI:NL:TNORAMS:2015:9, ECLI:NL:GHAMS:2016:460).

The estate notary as well as other notaries involved with the liquidation of the estate should be registered in the estate register which is maintained by and kept at the registry of the Court in First Instance of Aruba. All matters relevant to the devolved will are recorded in the estate register.

The executor (executeur) and the administrator (bewindvoerder)

The estate executor

The testator may appoint different kinds of executors in his will, each with a specific task. The testator may appoint an estate executor with the task to manage the estate. The (estate) executor becomes such by accepting the appointment after the testator has died.

The heirs cannot perform any actions in regards to the assets of the estate without the approval of the estate executor or the Court in First Instance. The estate executor represents the heirs in and out of court. The estate executor appoints an estate notary and does an inventory of the assets and debts of the estate.

The estate executor may only sell assets from the estate to pay off debts of the estate. The powers of the estate executor cannot be increased by testament, only limited. In his will, the father may place a testamentary burden (testamentaire last) on the estate executor, e.g. that certain estate assets should be sold first.

The estate executor may declare that acceptance of the inheritance under the benefit of inventory is not possible due to there being sufficient assets in the estate to cover the debts (ruimschootsverklaring).

The estate executor must keep the heirs informed on the way he goes about his duties and has to render account to the heirs at the end of his tenure.

The administrator

The father may place certain assets of his estate under fiduciary administration for the benefit of the proprietor of said assets. To that end, he may appoint one or more administrators in his will. If no administrators are appointed in the will, then the Court in First Instance appoints the administrator(s) at the request the proprietor, an heir or the executor or stakeholder. The administrator may be liable toward the proprietor if he falls short in the performance of his duties as an administrator.

The administrator must make an inventory of the assets that fall under the administration. Unless stipulated otherwise at the time of establishment of the administration, the administrator must register the administration and his appointment: a.?in the public registers, if the administration relates to registered property; b.?in the register of shareholders in case the administration relates to registered shares in a company; c.?in the commercial register if the administration relates to a business or a share in a company.