finnish inheritance law

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mffd
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finnish inheritance law

Post by mffd » Wed Sep 14, 2016 9:14 am

Hi,

I would be very grateful if anyone could advise re some of the basics of inheritance law here. I have read what I could but its still quite confusing.
I have moved here from the uk with my finnish husband with the expectation to hopefully stay long term, if finances permit. I was pretty shocked however when I came across some of the inheritance law details in finland which are so different from the uk where a will has much more legal standing.
Neither myself or my husband expect to get much of a pension on retirement and my expectation was that in our later life our retirement would be funded by investments and savings.

However it seems on the death of either of us as much as 50% goes to our kids, including kids he had from a previous marriage. In addition there is also a hefty inheritance tax to pay. Could anyone advise on the following questions:

1. Can a will reduce the children's right to assets to 25% rather than 50%?
2. Are our combined finances taken into account in the calculation of inheritance or just the separate named assets of the spouse that dies..ie if we have separate bank accounts and I die, is his bank account protected from division? Does it make a difference if the house we own here in in one or both names or if we have joint bank accounts to the way things are divided?
3. Does a will really make any difference at all?

I would be really grateful for anyone's advice on this, as it may change our decision as to whether we can afford to stay in finland long term..

Thank you!



finnish inheritance law

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betelgeuse
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Re: finnish inheritance law

Post by betelgeuse » Wed Sep 14, 2016 11:28 am

mffd wrote: 1. Can a will reduce the children's right to assets to 25% rather than 50%?
Usually not but you can move assets outside the estate with investment linked life insurance. Life insurance payments are not covered by normal inheritance rules. It's only possible to reduce the 50% if they have, for example, committed a crime against you.

http://www.finlex.fi/fi/laki/ajantasa/1965/19650040#L15
mffd wrote: 2. Are our combined finances taken into account in the calculation of inheritance or just the separate named assets of the spouse that dies..
Yes but the process is that first you do separation of assets for the end of marriage and then inheritance.
mffd wrote: ie if we have separate bank accounts and I die, is his bank account protected from division?
It will be counted as his assets and will not belong to the estate.
mffd wrote: Does it make a difference if the house we own here in in one or both names or if we have joint bank accounts to the way things are divided?
Yes. I have no time for the time long answer.
mffd wrote: 3. Does a will really make any difference at all?
Yes. I recommend consulting an inheritance lawyer on what's called mutual right of control will (keskinäinen hallintaoikeustestamentti) and in general you would benefit from consultation. It's not that expensive (talking about three digits).


Upphew
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Re: finnish inheritance law

Post by Upphew » Wed Sep 14, 2016 2:18 pm

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biscayne
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Re: finnish inheritance law

Post by biscayne » Wed Sep 14, 2016 2:44 pm

Hi, I am from Ireland where our inheritance laws are similar (probably taken from) to the UK's. In Ireland (and I believe in the UK) basically a person is entitled to leave their property to whomsoever they wish, if it is in a will and the person is of sound mind. The only exception being a spouse to whom you must leave at least 50% and they cannot be put out of the family home. Children do not have the right to inherit, but they can go to court and claim that they were not provided for, but they may not win. You don't have to leave anything to your children.

Most of Europe goes by a sort of Germanic legal system whereby there is something called the "minimum portion", meaning that you must leave a certain amount to children and in many countries they are entitled to get it upon the death of the person. When I lived in another EU country, a friend's husband died. There was not much money, but there was the house they lived in. His son from a previous marriage demanded his "minimum portion" so she had to sell the house in order to pay him off.

You can circumvent that by having it stipulated in law in Finland that nothing should be divided until you are both dead. I am not sure if that works for cash, but you can definitely legally make it not possible for you to be kicked out of your house before your own death should your spouse die first. I would get this sorted asap so you know where you stand, because it is not funny to be without funds or property in a foreign country.


mffd
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Re: finnish inheritance law

Post by mffd » Wed Sep 14, 2016 3:40 pm

Thank you all so much for your valuable information.
it is really appreciated.

I think there is one fundamental concept that I am missing though..
Very broadly speaking, if my husband And I have similar amounts of funds/assets do the children get 50% or 25% of our combined assets?


Rip
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Re: finnish inheritance law

Post by Rip » Wed Sep 14, 2016 4:53 pm

Some basic rules: When your spouse does, what you owned on your own right and half of the value of items you owned jointly is still yours.

If your spouse was wealthier than you and you had no prenuptial agreement stating otherwise, you can claim half of the combined assets of you and your spouse. This is not subject to inheritance tax.

Of the rest, the surviving children of the deceased are entitled to one half. Rest of that can divided freely by a will.


Rip
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Re: finnish inheritance law

Post by Rip » Wed Sep 14, 2016 5:00 pm

There is also Eu rule allowing in many cases to choose the relevant legislation, but with UK an EU things have gotten more complex lately...


betelgeuse
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Re: finnish inheritance law

Post by betelgeuse » Wed Sep 14, 2016 6:14 pm

Rip wrote:There is also Eu rule allowing in many cases to choose the relevant legislation, but with UK an EU things have gotten more complex lately...
Actually reading the legislation, UK leaving should not be a problem.

"Any law specified by this Regulation shall be applied whether or not it is the law of a Member State."

http://eur-lex.europa.eu/legal-content/ ... 50&from=FI
Rip wrote:Some basic rules: When your spouse does, what you owned on your own right and half of the value of items you owned jointly is still yours.
This should be amended that you can also get some of the assets of the spouse if they are the wealthier party. Example of three bank accounts as the sole assets:

M: 2e
F: 3e
M+F: 1e

Total assets: 6e

Now first step is to see 50% of joined assets at 3e. Female dies first without a will or prenuptial agreement. Total assets of male are 2.5e and female 3.5. The male can get 0.5e from the estate. 3e goes to the children. The female could in the will control how 1.5e is distributed.


Rip
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Re: finnish inheritance law

Post by Rip » Wed Sep 14, 2016 7:32 pm

betelgeuse wrote: Actually reading the legislation, UK leaving should not be a problem.

"Any law specified by this Regulation shall be applied whether or not it is the law of a Member State."
and if UK has stopped being a "Member state"? (I made the assumption that most likely nobody was dying within the next few years)
Rip wrote:Some basic rules: When your spouse does, what you owned on your own right and half of the value of items you owned jointly is still yours.
This should be amended that you can also get some of the assets of the spouse if they are the wealthier party.
and that is what I wrote in the next paragraph, right? (we seem to be in agreement regarding the actual issue)


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Pursuivant
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Re: finnish inheritance law

Post by Pursuivant » Thu Sep 15, 2016 8:11 pm

There is a "trick in the wording" thats really crucial. If you pass over the "ownership", you are liable for the tax on the house, but if the half of the house is owned by the "estate", but the widow has a "usage entitlement", you aren't liable as the estate hasn't been split. It gets trickier then if you wish to sell.
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Something wicked this way comes."


betelgeuse
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Re: finnish inheritance law

Post by betelgeuse » Fri Sep 16, 2016 2:10 pm

Rip wrote:
betelgeuse wrote: Actually reading the legislation, UK leaving should not be a problem.

"Any law specified by this Regulation shall be applied whether or not it is the law of a Member State."
and if UK has stopped being a "Member state"? (I made the assumption that most likely nobody was dying within the next few years)
The text of the regulation suggest that you could choose, for example, Canadian law if you were Canadian citizen. This means whether UK is a member is irrelevant (as a sidenote UK opted out of the regulation). Since I didn't read the whole thing and certainly not any context, I could be missing something.


leisl
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Re: finnish inheritance law

Post by leisl » Fri Sep 16, 2016 6:06 pm

biscayne wrote:When I lived in another EU country, a friend's husband died. There was not much money, but there was the house they lived in. His son from a previous marriage demanded his "minimum portion" so she had to sell the house in order to pay him off.

You can circumvent that by having it stipulated in law in Finland that nothing should be divided until you are both dead. I am not sure if that works for cash, but you can definitely legally make it not possible for you to be kicked out of your house before your own death should your spouse die first.
The "kicked out of the home" thing doesn't apply in Finnish law to my knowledge... my mother-in-law has this going on now. She as the surviving spouse is entitled to stay in that home for the rest of her life. The children, despite owning half the property, can't kick her out or force the sale.

I don't know for sure why it's the case (there was no will that I'm aware of), I assumed it's law as I glanced over the page betelgeuse provided and that seems to be the gist of what is written, that the spouse has administrative control of the estate (sorry I don't know how else to translate that) but essentially she can be in possession of the family home indefinitely. Once she passes away, it is divided as an asset according to the law, that is, the kids receive the father's half split between them, then "her half" gets divided by Finnish law independently.

In my m-i-l's case, it throws up a conundrum of sorts. It's a large home, on the third floor with no lift, and she'd love to downsize to a ground-floor flat closer to transport etc. But she can't, as the moment she sells she will be handing over half the value of the apartment and won't have enough left to buy an yksiö for herself.


Rosamunda
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Re: finnish inheritance law

Post by Rosamunda » Fri Sep 16, 2016 7:46 pm

Yes, it throws up lots of problems - IIRC we've had a post on here recently where a couple (Finnish husband, foreign wife) married abroad, then moved to Finland. Unfortunately the husband died and his family members tried to expel the wife from the home so they could sell it. She had to prove that her marriage was valid in order to assert her right to remain in the conjugal home. So for anyone getting married to a Finn outside Finland, it's a good idea to get the marriage registered with the Finnish authorities even if you don't intend to live here immediately.


biscayne
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Re: finnish inheritance law

Post by biscayne » Mon Sep 19, 2016 8:41 am

Regarding the automatic right of a spouse or legally recognised partner to stay in the family home upon death of the partner or spouse, I would check into that. I was given to understand that it needs to be written into a will or contract (the bank told me that a contract can be made which is just related to the house and not actually a will). This was when I bought into a house here, last year.

I was told that if this is not organised, then the property will be divided upon death of the spouse in order to fulfill the legal obligations to his or her heirs. Which by the way does not mean only children, if there are no children it goes to siblings if they are alive. At least this is what I was told. If the property was not worth enough that the surviving spouse could buy an apartment with the remainder of the proceeds of the sale, then application can be made to the court that it will not be sold until death of the surviving spouse. Unbelievably (from an Anglo-Celtic viewpoint), the minimum square metres are set down, for one person it is about 25m2. So, if there is no will or contract, and the flat or house can be sold to provide the heirs with their "minimum portion", and enough is left over for you to be able to buy 25m2 in a crappy part of town, then oops.

I am used to a situation where I can leave whatever I want to whomsoever I want. But you can end up practically homeless here, or in a situation where you are stuck in a house or flat which is not suitable for your needs, but you cannot sell. The whole thing can be tricky for foreigners who may have sacrificed a lot of their earning power by coming to Finland etc.


betelgeuse
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Re: finnish inheritance law

Post by betelgeuse » Mon Sep 19, 2016 8:26 pm

leisl wrote: I don't know for sure why it's the case (there was no will that I'm aware of), I assumed it's law as I glanced over the page betelgeuse provided and that seems to be the gist of what is written, that the spouse has administrative control of the estate (sorry I don't know how else to translate that) but essentially she can be in possession of the family home indefinitely. Once she passes away, it is divided as an asset according to the law, that is, the kids receive the father's half split between them, then "her half" gets divided by Finnish law independently.
In Finland you can have different interests in assets. Ownership and right to control and enjoy profits can belong to different entities. The widow is entitled to have a dwelling by law after the death. When she dies the right of control ceases. There's no asset division at that point or change of ownership.
leisl wrote: In my m-i-l's case, it throws up a conundrum of sorts. It's a large home, on the third floor with no lift, and she'd love to downsize to a ground-floor flat closer to transport etc. But she can't, as the moment she sells she will be handing over half the value of the apartment and won't have enough left to buy an yksiö for herself.
The right of control can be moved to another apartment if all the owners and she agree.
biscayne wrote:Regarding the automatic right of a spouse or legally recognised partner to stay in the family home upon death of the partner or spouse, I would check into that. I was given to understand that it needs to be written into a will or contract (the bank told me that a contract can be made which is just related to the house and not actually a will). This was when I bought into a house here, last year.
If you are married it does not, for avopuolisot it does. I assume you were not married.
biscayne wrote: At least this is what I was told. If the property was not worth enough that the surviving spouse could buy an apartment with the remainder of the proceeds of the sale, then application can be made to the court that it will not be sold until death of the surviving spouse.
I think this is bogus information.
biscayne wrote: Unbelievably (from an Anglo-Celtic viewpoint), the minimum square metres are set down, for one person it is about 25m2. So, if there is no will or contract, and the flat or house can be sold to provide the heirs with their "minimum portion", and enough is left over for you to be able to buy 25m2 in a crappy part of town, then oops.
I don't know what this refers. There's a rule for married people that if the spouse already owns another suitable dwelling then there's no right of control to the conjugal home. The 25m2 could refer a decision on what is minimum for suitable.


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