Steven’s gay and his parents don’t want to leave him a euro: can parents disinherit a child?

Steven - it’s not his real name, but one we are using to protect his identity - is in his 50s and prefers men.  His parents have a hard time accepting this. "They call me the abnormal one in the family, scold me and want nothing more to do with me," he tells VRT.

"My parents would prefer to disown me completely, just because I am gay. But can they do that?" he wonders.

"The law provides for a minimum share of the inheritance for every child," reassures Michaël Van Droogenbroeck. "At least half of the total inheritance is reserved for the children."

"How big exactly that share is, depends on the number of children of the deceased." So in Steven’s case – he has two sisters - that's a third of half or 16.66 per cent of the total estate.

You can’t disinherit children entirely by giving assets away

Still, Steven fears that little will be left for him after his parents' death. "They’ve already made several registered donations to my sisters and the grandchildren. Just to avoid me ever seeing a euro."

But that tactic is not foolproof, Van Droogenbroeck explains. "When parents die, basically all the gifts they made to their children during their lifetime are taken into account. In that way, it is ensured that each child receives his or her minimum share of the inheritance."

"If the other children received many registered gifts and Steven hasn’t, that will have to be taken into account in the inheritance. Even a will cannot change that."

Avoid inheritance tax by gifting

What Steven will have to pay when the time comes is inheritance tax. Exactly how high that inheritance tax is depends on the kinship you had with the deceased and the size of the estate. For instance, children have to pay a good deal less inheritance tax than, say, a distant cousin or a close friend.

You can also often avoid the tax your heirs have to pay by donating certain assets to someone during your lifetime. When you do so, you have two options: pay gift tax immediately or take the calculated gamble that you will still be alive 3 years after the gift. Because then no more taxes have to be paid on a gift. If you die within the 3 years, then your heir will still have to pay inheritance tax.

"People often even make registered donations on their deathbed. They then obviously do not have 3 years left to live and then simply pay the gift tax because it is lower than the inheritance tax," Van Droogenbroeck explains.

"However, this donation must be officially registered. On the value of a donation of movable assets like cars, jewellery, paintings, ... you pay 3 per cent tax if you are a direct descendant. The same applies to gifts between partners. Everyone else pays 7 per cent, while with inheritance tax you quickly end up paying 25 per cent or more."

Donate your property in instalments

You can also gift real estate, such as a house or flat. "On the first tranche of up to 150,000 euros, as a direct descendant or partner, you pay 3 per cent gift tax. Other people start at 10 per cent in that first bracket. That is already a lot more, but still much lower than the inheritance tax rate."

Real estate can also be donated in instalments. For example, you can first gift a tranche of 150,000 euros at 3 per cent and do the same three years later with the next tranche up to 150,000 euros. Until you reach the total value of the house or flat. That way, you can save more.

Let friends inherit more advantageously

A couple of years ago a special friends' inheritance system was introduced. It allows you to bequeath good friends or distant relatives up to 15,000 euros at the most favourable tax rate of 3 per cent.

To do so, you need to include the person(s) in question in your will. That way, your friends will be treated like your children or partner for a limited amount. On anything over 15,000 euros, the ordinary rate is levied.