8/30/2022
On August 9th, 2022, it was announced that Ms. Marlene Engelhorn, heiress of the BASF German group, renounced 90% of the billionaire estate left by her grandmother (Euro 4.2 billion), explaining that she had never contributed nor participated in her family businesses. Furthermore, as one of the founders of ‘Taxmenow’, Engelhorn supports the taxation of high-net-worth individuals as a mechanism to achieve social balance.
In Brazil, the renunciation in a succession context, is regulated by Articles 1,804 to 1,813 of the Brazilian Civil Code (“Civil Code”), by means of which it is established that the renunciation of the inheritance (i) must be formalized upon execution of a public deed or a judicial declaration, and (ii) is not subject to the previous approval of the other heirs.
According to Article 1,808 of the Civil Code, “it is not possible to accept or renounce the estate in part, subject to a condition or to a term”, which means that, unlike Ms. Engelhorn’s case, in Brazil, an heir cannot renounce the debts and accept the assets of a single hereditary share.
On the other hand, an heir who is entitled to more than one hereditary share, under different titles (e.g. heir and legatee) would be entitled to choose which one to accept and which one to renounce.
In regard to forced heirship (Sucessão Legítima), the renouncing heir’s hereditary share adds on to those of equal class heirs (e.g. children of the deceased) and, if he/she happens to be the only heir of his/her class, the corresponding hereditary share shall be distributed amongst those belonging to the subsequent class of heirs (e.g. spouse).
As a rule, the renouncing heir can’t be succeeded by his/her descendants, under the right of representation (“direito de representação”). If, however, the renouncing heir is the only one of his/her class, or all equal class heirs have renounced their respective hereditary shares, the children of the renouncing heir shall be entitled to replace him/her in the succession.
Potential creditors jeopardized by the renouncement presented by an heir, can request judicial authorization to accept the estate on behalf of the renouncing heir, according to Article 1,813, 1st paragraph of the Civil Code. When the renouncing heir debts are paid, the outstanding balance shall benefit the other heirs.
The renunciation, as well as the acceptance of the estate, is irrevocable: therefore, once the estate is subject to a renunciation, the renouncing heir cannot take it back.
Ms. Engelhorn’s renunciation has no precedents in Europe, but it may become less unusual in the forthcoming years due to the changes society has been going through, especially the increasing awareness about meritocracy, social, environmental and governance issues, vis-à-vis the Brazilian Law concept of forced heirship, which derives from Roman Law, but has been an increasing topic of criticism, given that it constitutes an obstacle to one’s free and regular exercise of his/her property rights.
