Supreme Court Strengthens the Right of Heirs Entitled to a Statutory Share to Information from Foundations & Trusts

The facts underlying the judgment are as follows: 

The decedent donated assets to a foundation & trust and designated beneficiaries. The question is: Do the beneficiaries entitled to a compulsory share have a right to information?

The Statutory Share

Close relatives (descendants, spouse, registered partner) are generally entitled to a statutory share. It amounts to half of what would be due under the statutory order of succession. It is not possible to circumvent the statutory share: gifts made by the decedent must be added to the basis for calculating the statutory share.

… with regard to foundations & trusts

Gifts made by the decedent to foundations & trusts, as well as the designation of a foundation & trust as a beneficiary, are to be included in the basis for calculating the statutory share as “gifts.”

Time Limit on the Addition

Gifts to persons not entitled to a statutory share (e. g., to foundations & trusts) may be included in the calculation only if they were made no more than two years before death. Gifts to persons entitled to a statutory share, on the other hand, may be included in the calculation at any time.

Practical Enforcement and the Necessary Right to Information

A mandatory inheritance claim must be asserted by filing a lawsuit against the estate or the heirs. In practice, this is complicated by the fact that the person entitled to a mandatory inheritance claim often does not know the amount of their claim or which gifts must be included in the calculation. 

To provide redress to the beneficiary of the statutory share, the legislature has enshrined a right to information in law: If a gift is suspected, the beneficiary of the statutory share may demand information regarding it from the estate, the heirs, and/or the donees. This enables the beneficiary of the reserved share to effectively enforce their claim.

A Foundation & Trust's Duty to Disclose Information in the Event of Inheritance 

The Austrian Supreme Court (OGH) recently addressed (2 Ob 115/25p) the question of what information a foundation & trust is required to disclose—and what it is not. This is relevant in practice because only the foundation deed is publicly accessible to everyone—but not any subsequent amendments set forth in supplementary foundation deeds. Furthermore, foundations & trusts often hold substantial assets, which can significantly increase the statutory share.

In its ruling, the Supreme Court addresses the question of the extent to which information must be provided to beneficiaries of a compulsory share in two distinct categories of cases.

With regard to gifts made by the decedent to a foundation & trust, the Supreme Court held that a beneficiary entitled to a statutory share has a right to information from the foundation & trust: As the recipient of the assets donated to it, the foundation & trust is obligated to provide such information. The right to information encompasses all information necessary to determine the value of the assets dedicated to the foundation or otherwise transferred to it without consideration.

However, according to the recent ruling, the right to information with respect to foundations & trusts goes much further. If the decedent transferred assets to beneficiaries through a foundation & trust, a right to information may also exist with respect to the foundation & trust.

The request for information may pertain to both the granting of beneficiary status and distributions to beneficiaries. 

Outcome of the Supreme Court Ruling

The foundations & trusts must therefore provide information regarding,

• which individuals have been or were granted the status of beneficiary,
• what distributions were made to beneficiaries. 

In doing so, the Supreme Court strengthens the practical enforceability of mandatory inheritance claims. Any confidentiality interests the foundation may have are irrelevant, as the goal is to ensure effective enforcement of the law.

Conclusion 

With its ruling, the Supreme Court has clarified that foundations & trusts are also required to provide information to beneficiaries of a statutory share. This duty to provide information is also very broad, which greatly strengthens the enforceability of mandatory inheritance claims. At the same time, it makes it practically difficult for (future) testators to “set aside” funds using private foundation structures in order to reduce mandatory inheritance claims.

In inheritance matters, it is often unclear what rights exist and can be enforced. Our estate planning team is happy to advise you on matters such as estate planning or enforcing your mandatory inheritance claims. 

Frequently Asked Questions

What does the Supreme Court’s decision in Case No. 2 Ob 115/25p mean for heirs and beneficiaries of a compulsory share?

In the future, beneficiaries entitled to a statutory share will be better able to enforce their claims because they can obtain information directly from the foundations & trusts. This will make it more difficult for testators to use foundations & trusts to exclude assets from the statutory share.

When is a foundation & trust required to provide information?

As soon as there are indications that the decedent made a donation to the foundation or through the foundation—that is, when there is sufficient evidence to support this—the beneficiary of the reserved share is not required to provide detailed proof of everything in order to request information.

What information can a person entitled to a compulsory share request from a foundation & trust?

He may find out who is or was a beneficiary of the foundation and what distributions have been made to beneficiaries. He may also request information regarding the value of the assets that the decedent bequeathed to the foundation.

Can a foundation & trust invoke confidentiality?

No. The Supreme Court makes it clear that the foundation’s interest in confidentiality does not take precedence over the right of the beneficiary of a compulsory share to receive information.