n Articles and Rulings

Outline of Israeli Succession Law: Foreign Decedent Leaving Assets in Israel

The law of succession in Israel is governed by the provisions of the Succession Law – 1965 (the “Law”). Israeli law of succession – both the substantive law and the choice of law rules - becomes relevant not only in the case of a decedent who at the time of his death was domiciled in Israel, but also in the case of a foreign decedent who left assets in Israel.  

Israel Public International Law

Jurisdiction  

International jurisdiction. Israeli courts have jurisdiction over matters of will probates or intestate succession of any person who was domiciled in Israel at the time of his death or who left assets in Israel[i].  Once the Israeli court acquires jurisdiction over the estate of a foreign decedent, its competence is not limited to the assets located in Israel but extends to the estate abroad.

Material jurisdiction – division between Registrar of Succession Matters and Family Court. Applications for probate and succession orders are filed with the Registrar of Succession Matters or the Family Court having local jurisdiction. The Registrar is competent to issue uncontested probate or succession orders[ii]. In the event where an application for a probate order or for a succession order is contested, the matter is transferred to the Family Court for trial[iii].

 Local jurisdiction. With regard to the estate of a decedent who was at the time of his death resident in Israel, local jurisdiction belongs to the Registrar of Succession Matters or the Family Court of the district of the decedent’s residence at his death[iv]. With regard to the estate of a foreign decedent, the international jurisdiction to entertain succession proceedings a local jurisdiction belongs to the Registrar of Succession Matters or the Family Court of the district where the assets are located[v].

Jurisdiction of religious courts. Notwithstanding the jurisdiction of the Registrar and the Family Court under the Law, a religious court having jurisdiction over the decedent’s personal status issues is competent to issue a succession or probate order and award maintenance from the estate, if all the parties concerned agree to its jurisdiction in writing[vi]. 

Choice of Law

General rule – the law of the place of domicile. The Israeli court will apply the law of the decedent’s place of domicile at his death, subject to three statutory exceptions[vii]. “Domicile” is statutorily defined as “the center of the decedent’s life”[viii], which is determined according to the entirety of connecting factors.

Statutory exceptions to the general rule of the law of domicile.

Mandatory application of lex situs.  Where the assets comprising the estate pass in succession only in accordance with the law of the place where they are situated (lex situs), the Israeli court will apply such law[ix]. Under private international law, a classical case of assets whose succession is governed by the lex situs is the succession of real estate. Thus, where the decedent was domiciled in Israel and left real estate in a foreign country, the applicable law in respect of such real estate is the law of the foreign country where such real estate is situated.  

However, as a matter of practice, in cases of foreign decedents leaving real estate located in Israel, the courts, instead of directly invoking Israeli law as the lex situs of the assets, customarily request applicants for succession or probate orders to provide an expert opinion on the foreign law of domicile of the decedent, which, in turn, customarily refer to Israeli law as the lex situs of the real estate. This appears to be a circuitous way of arriving at the application of Israeli law to real estate located in Israel, and a more cogent practice would be to apply the Israeli statutory provision that mandates the application of lex situs, rather than depend on the recognition of customary international law by the law of the foreign jurisdiction.  

Form of the will; testator’s capacity to bequeath. Further, the rule of the law of domicile at the time of death is supplemented by other options with regard to the issue of the form of the will, which will be deemed valid if it is valid under (a) Israeli law, or (b) the law of the jurisdiction where the will was made, or (c) the law of domicile or residence or nationality of the testator at the time of making it or at the time of death, and, to the extent the will relates to real estate, also (d) the law of the jurisdiction where real estate is situated[x]. The capacity of the testator and of the witnesses to the will is also deemed a matter of form for the purpose of this choice of law exception[xi]. While the provision offering a range of applicable laws to validate the capacity of the testator, namely Section 140(b) of the Law, is intended to avoid invalidating the will wherever any of the relevant systems of law permits to validate it, another, seemingly contradictory, exception set forth in Section 139 provides that the issue of capacity to bequeath is, instead of the law of domicile at the time of death, be governed by the law of domicile at the time of the making of the will. The practical effect of this provision would be to deny the validating effect offered by Section 140(b); therefore, legal commentators view this provision as subordinate to the validating provision of Section 140, which classifies the capacity of testator for the purpose of the choice of law as a matter of form, permitting a choice from among several systems of law to determine the testator’s capacity[xii].

Disregarding foreign choice of law rules. Further, where the choice of law rule of the applicable foreign law (as the law of domicile) transmits the matter to the law of a third country (transmission renvoi), such choice of law rule will be disregarded in favor of the application of the substantive law of such foreign jurisdiction[xiii]. Where the renvoi refers back to the Israeli law (remission renvoi), the Israeli substantive law will be applied.[xiv]  

Disregarding applicable foreign law for reasons of public policy. A foreign law will also be disregarded if it is discriminatory as to race, religion, gender or ethnic origin, or contradicts Israel’s public policy[xv]. Further, a foreign law which gives statutory succession rights to persons other than the decedent’s relatives by blood, marriage or adoption will be disregarded unless such foreign law recognizes the above-mentioned succession rights as granted by Israeli law[xvi].

Religious court to apply religious law. In a matter brought before a religious court, the religious court is authorized to decide in accordance with the religious law that it applies, provided that if the parties include a minor or an incompetent person, such minor or incompetent person’s succession and maintenance rights should not be less than those under the Succession Law.[xvii]     

IsraelI Substantive Law

General

Absent a will, statutory intestate succession. The Law provides for statutory rights of intestate succession, i.e. the rules which apply unless there is a will, in which case its provisions prevail[xviii].

Disqualified heirs and beneficiaries.  Apart from the obvious case of the disqualification of a prospective heir or beneficiary convicted of causing or attempting to cause the decedent’s death (which disqualification, in case of an attempted killing, can be cured by the testator’s written pardon or a later provision in his will in favor of such person), a prospective heir or beneficiary will be disqualified following a conviction for concealing or destroying the latest will of the testator, or forging a will or claiming under a forged will[xix].

Heir’s renunciation of his portion. After the decedent’s death and before the estate has been divided, an heir or beneficiary may, by written notice to the Registrar of Succession Matters or the court, as the case may be, renounce his portion of the estate[xx]. An heir cannot renounce a specific asset[xxi]. Upon renunciation, such heir or beneficiary is deemed not to have been an heir or beneficiary in relation to the renounced portion from the outset[xxii]. There are no conditional waivers or waivers in favor of a third party, unless it be in favor of the decedent’s spouse, child or sibling[xxiii]. For example, a waiver cannot be made in favor of the testator’s parent, although in statutory intestate succession parents come before siblings.

 Transfer or mortgage of an heir’s portion. After the decedent’s death and before the distribution of the estate (that is, in the period while the heir is entitled to renounce his portion, an heir or beneficiary may, in a written agreement, transfer or mortgage his portion (but not a specific asset)[xxiv]. Such transfer or mortgage precludes the heir’s renunciation of his portion[xxv].

Attachment of an heir’s portion. After the decedent’s death and before the distribution of the estate, an heir’s creditors may attach his portion of the estate (but not a specific asset)[xxvi]. Such attachment precludes the heir’s renunciation of his portion[xxvii].

Prohibition of contracts regarding future succession. To preserve the freedom of bequest, Israeli law deems contracts regarding a person’s succession and waivers of a right to inherit made in the lifetime of the testator to be void[xxviii], so as to eliminate a contractual deprival of an heir or beneficiary of his rights or a granting of succession rights to a person not otherwise entitled to succession.

No post-mortem gifts other than in a will. No gift can be made if it is to vest after the donor’s death, unless it is made by way of a provision in the will[xxix].

Testate Succession (Succession under a Will)

General

Freedom to bequeath. Israeli law recognizes an unlimited freedom to bequeath, so that in his will a person may bequeath his assets to whomever he wishes, and in probating the will the court will give full validity to his wishes. While there is no statutorily provided portion to family members, the closest family members dependent on the decedent are entitled to maintenance from the estate.

Formal Requirements

Form of the will. The guiding principle of Israeli law in the interpretation of wills is to give maximum respect to the testator’s last will and testament (Section 54 of the Law). This principle dictates a choice of law rule (see above) that deems a will valid if its validity as to form is recognized by the law of any of the jurisdictions having connection to the matter. Under Israeli law, the will can, as to its form, be made in handwriting, before witnesses, before a designated authority or, in cases of deathbed wills, orally before witnesses[xxx].

• A will before witnesses must be in writing, dated and signed by the testator before two witnesses, who are not beneficiaries under the will and who also sign the will[xxxi].

• A handwritten (holographic) will must be entirely in the handwriting of the testator and signed by him[xxxii].

• A will before a designated authority is made orally by the testator before and recorded by, or is personally submitted by the testator to, a family court judge or registrar, a registrar of succession matters, a judge of a religious court o notary. The official confirms the fact of making the will[xxxiii].

• An oral (deathbed) will may be made orally by a testator on his deathbed or reasonably believing that he is about to die, before two witnesses, who must record it at the earliest opportunity, sign and deposit it with the Registrar for Succession Matters[xxxiv]. In the event the testator remains alive for one month after making such a will, the will is automatically void[xxxv].

Depositing a will. Handwritten wills, wills made before witnesses and wills made before a designated authority may be deposited with the Registrar of Succession Matters[xxxvi].

Validity of the Will

Testator’s capacity to bequeath. The choice of law rule regarding the capacity of a foreign testator is reviewed above. Israeli law voids the will of a minor, a person declared incompetent or a will made by a person who at the time of making the will was unable to understand its nature[xxxvii].

Duress, fraud, undue influence and other defects invalidating the will. A provision of the will made under duress, threat, undue influence, manipulation or fraud is void[xxxviii]. A provision made as a result of a mistake is void unless the testator’s intention but for the mistake is ascertainable, in which case such provision will be corrected by the court[xxxix]. If the testator fails to cancel the will within a year after the duress, threat, undue influence, or manipulation ceased, or after he learned of the fraud or the mistake, provided he had the opportunity to cancel the will, the will is no longer deemed to be invalidated by such defect[xl].

Limitations on the content of the will. With a view to protecting the unfettered freedom to bequeath, Israeli law provides that any agreements to make or to refrain from making a will, are void[xli]. Also void are any provisions of the will purporting to restrict the testator’s freedom to change or cancel his will[xlii]. A will cannot be made other than by the testator himself[xliii].

A provision of the will which conditions its force on the will of any person other than the testator is void[xliv]. The will cannot delegate to any other person the determination of the identity of the would-be heirs or their respective shares; however, the choice of an heir from among specified people, or the choice of a share from among specified assets may be delegated by the will to a designee[xlv]. A provision unclear as to the identity of the heir or the nature of the bequest, or a provision the meaning of which is unascertainable, is void[xlvi].

A provision in a will, except a deathbed will, in favor of the person who drafted it or took part in drafting it or served as a witness, or in favor of a spouse of such person, is void[xlvii].  

Illegality and severability of a provision of the will. A provision, the execution of which is illegal, immoral or impossible, is deemed void (Section 34 of the Law). Also void is a condition of the will, which requires an illegal, immoral or impossible act[xlviii]. Where a provision, part or condition of the will is deemed void due to illegality, immorality or impossibility of performance, the invalidity will be limited to such void provision, part, or condition and will not affect the validity of the remaining provisions, unless the court resolves that such other provisions are inseparably connected to the void provision or that the testator would not have desired their execution absent the void provision[xlix].

Freedom to cancel a will and mode of cancellation. A testator may cancel the will at any time, by canceling it expressly (or implicitly, to the extent the new will contradicts the provisions of the old) in a new will or by destroying the will[l]. 

Content of the Will

Alternative beneficiaries. A testator may provide for two (or more) alternative beneficiaries, so that the alternative beneficiary inherits in the event that the first beneficiary predeceases the testator or is otherwise ineligible to inherit, or waives his right other than in favor of the testator’s spouse, child, or sibling[li].

Successive beneficiaries. Mechanism to create a life estate.  A testator may bequeath to two (or more, provided each beneficiary is alive at the time when the will is made) successive beneficiaries, so that the second would inherit after the first, upon the first beneficiary’s death or upon the fulfillment of a condition or at a time set forth in the will[lii]. The first beneficiary may dispose of his portion as of his own, leaving the second beneficiary the remainder, if any, of the original portion; the only statutory limitation on the freedom of the first beneficiary to dispose of his portion is that the first beneficiary cannot bequeath it away from the second beneficiary[liii]. Therefore a provision regarding successive beneficiaries does not, in itself, achieve the objective of a life estate, whereby the first beneficiary is entitled to the income from the property for his life, but cannot dispose of the property, which upon his death goes to the holder of the remainder interest (the second beneficiary).

The mechanism to construct an equivalent of a life estate is through bequeathing to successive beneficiaries under Section 42 while in addition imposing a restriction on the first beneficiary as to the disposal of the asset, pursuant to Section 45 of the Law. Alternatively, a testator may, without bequeathing to successive beneficiaries, include an instruction to the immediate beneficiary pursuant to Section 45 to bequeath the asset to a specified third party; in such a case the entitlement of the third-party beneficiary will not derive directly from the will, as opposed to a bequest to successive beneficiaries under Section 42[liv]. 

Conditional bequests. A testator may make bequests conditioned upon the fulfillment of a prerequisite condition or upon a date; absent a provision in the will regarding the disposition if the prerequisite condition becomes incapable of fulfillment, the rules of intestate succession will apply[lv]. The testator may also make a bequest conditional on a resolutive condition, so that the beneficiary will inherit unless the terminating event occurs[lvi]. Absent a provision in the will regarding the disposition of the estate if the resolutive condition occurs, the heirs according to the rules of intestate succession will be deemed to be successive heirs[lvii].

Beneficiary predeceasing testator. If a beneficiary predeceases the testator and the testator has not provided for an alternative beneficiary, the beneficiary’s issue will come in his stead, and absent issue, the provision of the will in favor of the beneficiary is cancelled[lviii].

Disqualified beneficiary and beneficiary who waived his entitlement. In the event a beneficiary is disqualified or waives his entitlement other than in favor of the testator’s spouse, child or sibling and the testator has provided for an alternative beneficiary, the provision in the will in favor of a beneficiary is cancelled[lix].

Intestate Succession

General. In the event the decedent dies intestate or in the event his will is deemed invalid, the statutory rules of intestate succession, set forth in the provisions of the Succession Law, apply. The rules of intestate succession also govern the disposition of any assets to which the will, according to its provisions, does not apply. Israeli rules of intestate succession employ the so-called “parantela” system, whereby the relatives of the closest degree (or, if deceased, their issue) inherit to the exclusion of more distant relatives.

Successors. The relatives entitled to succession rights upon intestate succession are the decedent’s spouse, the decedent’s children (and, if not surviving, their issue, i.e. the decedent’s grandchildren, etc.), the decedent’s parents (if not surviving, their issue, i.e. the decedent’s siblings, etc.), the grandparents (and if not surviving, their issue, i.e. the decedent’s uncles, etc.)[lx]. Issue of an heir inherit only if the heir himself is deceased. Relatives of the same degree share the inherited portion between them in equal shares, and the issue of a deceased heir share such heir’s portion between themselves[lxi]. 

Spouse’s inheritance rights. The decedent’s spouse inherits the household chattels, including the automobile belonging to the household[lxii]. The balance of the estate is divided between the spouse and the other relatives in the following manner:

• As between spouse and children (or their issue). In the event that the decedent left children (or, in case of a child’s predeceasing the decedent, such child’s issue comes in his stead), the spouse inherits half the estate, and the children (or their issue, as the case may be) inherit the other half, which will be divided in equal shares among them[lxiii]. In the event that the decedent left surviving children (or their issue), the children inherit in equal shares alongside the spouse (if there is a surviving spouse), while the decedent’s next of kin - parents, siblings and grandparents - do not have inheritance rights[lxiv].

• As between spouse and parents. In the event that the decedent left no surviving children (or their descendants), but left behind parents, the spouse inherits half the estate, and the parents inherit the other half, divided in equal shares between them.  In the event the decedent left parents, the parents inherit alongside the spouse (if there is a surviving spouse), but his next of kin - siblings and grandparents - do not inherit[lxv].   

• As between spouse and siblings or spouse and grandparents. In the event that the decedent left neither children (including descendants), nor parents, but is survived by siblings (or their issue), the spouse inherits two thirds of the estate. Further, provided that the spouse had been married to the decedent for three years prior to his death and had been living with him in the residential home which is included in the estate, then the spouse will inherit all of the decedent’s rights in the residential home and two thirds of the balance of the estate[lxvi]. The same division applies if there are no siblings or their issue but there are grandparents, who inherit only if there are no surviving siblings or their issue[lxvii]. For the purpose of the division between the spouse and other relatives, if the grandparents are not living, their issue (the decedent’s uncles, etc.) would be disregarded.

• In the event that the decedent left neither children (or their issue), nor parents, nor siblings (or their issue), nor grandparents (disregarding their issue), the spouse inherits all of the estate[lxviii]. 

Matrimonial rights. Any property to which a spouse is entitled in consequence of the matrimonial relationship, including under the relevant religious law, such as “ketubah” (traditional marriage contract under Jewish law) rights, will be deducted from her portion of the estate (so that a widow will not inherit twice, as under Jewish law ketuba rights come in lieu of inheritance rights)[lxix]. Where the estate may be insufficient, a wife may benefit from claiming her ketuba rights, which are treated as a debt of the estate and thus are payable before the maintenance from the estate and before the distribution of the estate to the heirs or beneficiaries[lxx]. At the same time, a spouse’s inheritance rights are not affected by his or her rights under the Matrimonial Property Law-1973 or under a nuptial agreement or rights to the return of such assets as the decedent received upon marriage under an undertaking to return upon its dissolution[lxxi]. The estate comprises only such assets as are deemed to belong to the decedent, to the exclusion of assets belonging to the surviving spouse under the laws addressing property rights of spouses in the matrimonial property.  

Rights of a common-law, or putative, spouse. Legal spouse living separately. A common-law, or putative, spouse, defined as an unmarried partner who has lived with the decedent at the time of his death in a joint household, where neither of the partners was married to a third party, inherits as if she were a married spouse[lxxii]. If the decedent was married to another at the time of his death, the putative spouse, who lives with him at the time of his death, is excluded from succession, and the legal spouse inherits. A legally married spouse does not forfeit his or her inheritance rights by not living with the decedent at the time of his death; however, such spouse does not have special rights he or she would otherwise have with regard to household chattels and the residential home.

Heir predeceasing decedent. If an heir predeceases the decedent, the heir’s issue will come in his stead, unless there is a surviving spouse, parent or grandparent of the decedent pursuant to Section 11(a) of the Law[lxxiii].

Inheritance rights in case of adoption. An adopted child inherits from the adopting parent, and the adopting parent inherits the adopted child, as if they were natural parent and child; the adoptee does not inherit from the adopting parent’s relatives, and the adopting parent’s relatives do not inherit from the adoptee[lxxiv]. The adoptee inherits from his natural relatives, but the natural relatives do not inherit from the adoptee[lxxv].        

State as successor. In the event of intestate succession and absent other statutory heirs, the inheritance goes to the state[lxxvi].

Distribution of the Estate

The estate will not be distributed to the heirs or beneficiaries until the debts of the estate and the maintenance from the estate have been paid[lxxvii].

Maintenance from the Estate

General. The decedent’s spouse, children and parents may be entitled to maintenance from the estate[lxxviii]

Spouse’s right to maintenance. The spouse’s right to maintenance would last throughout her widowhood (unless she had lost her right to maintenance from the decedent during the decedent’s lifetime)[lxxix].

Common-law, or putative, spouse’s right to maintenance. A common-law, or putative, spouse is entitled to maintenance from the estate as if she had been married to the decedent[lxxx].

Children’s right to maintenance. The children are entitled to maintenance until the age of 18 (or if disabled or mentally ill, throughout the period of disability or illness); in a case of need, the court may award maintenance until the age of 23[lxxxi].

Dependent parents’ right to maintenance. The parents may be entitled to maintenance for their lifetime if they had depended on the decedent for their maintenance prior to his death[lxxxii].

Right to continue to reside in the family’s residential home. Surviving spouse, children and parents who resided with the decedent before his death in a residential home owned by the decedent or leased long-term (for over 25 years), have the right to continue to reside there as tenants of the heirs or beneficiaries who inherited the residential home, subject to payment of rent as agreed between the parties or determined by the court[lxxxiii].

Debts Payable out of the Estate

Among the debts payable out of the estate, the debts having priority are, in the following order, (1) the funeral expenses, (2) expenses regarding the filing for probate or succession order, (3) debts owed by the decedent at the time of his death, including the ketuba obligation with a reasonable amount, (4) other obligations owed to the surviving spouse in consequence of the matrimonial relationship, including by force of the Matrimonial Relations Law-1973 or a nuptial agreement under the same law[lxxxiv]. Debts payable by the estate precede the payment of maintenance of the estate[lxxxv]. The debts must be ascertained by the administrator of the estate by way of soliciting creditors’ claims, unless he has been exempted from this obligation by the court[lxxxvi].