Under the Bulgarian Inheritance Act (“IA”), when there is no will, the estate of the deceased will pass to the legal successors in one of four levels of successors.
In order to obtain the right to inherit:
• the person is to be born alive and capable of living; or
• the person is to be conceived by the date of the death of the deceased, provided that the person is later born alive and capable of living; and
• the person is to be worthy of succession in compliance with the statutory requirements – e.g. a serious offence such as attempted murder, committed murder of the deceased or of their close relatives leads to unworthiness to inherit.
The IA sets forth four levels of successors:
1st level: Children of the deceased (including the fully adopted children), respectively the descendants of the children in case of death of the latter (before the death of the deceased) or in case of unworthiness of the children to inherit from the deceased. The non-fully adopted children inherit from the adoptive parent (but not from the adoptive parent’s relatives) and from the biological parents (and other biological relatives). Unborn children which have been conceived before the date of the death of the deceased have a status of children of the deceased. The children are entitled to receive equal parts of the estate.
2nd level: The surviving parent(s) of the deceased, including the adoptive parent(s) (regardless of the type of adoption - full and non-full) inherit in case the deceased has left no successors of the 1st level. The biological parents of the deceased (who was adopted), do not inherit from the deceased, regardless of the type of the adoption. Each parent is entitled to receive equal parts of the estate.
3rd level: The successors from the 3rd level inherit in case the deceased has left no successors of 1st and 2nd level. This level is more complex due to its structure. It consists of two groups of successors:
– siblings, including the fully adopted brothers and sisters (respectively their descendants, in case of death of the sibling before the death of the deceased or in case of unworthiness of the sibling to inherit from the deceased). Half-brothers and half-sisters inherit 1/2 of the part obtained by full brothers and full sisters. Half-brothers and half-sisters inherit in equal parts among them. Full bothers and full sisters, respectively inherit in equal parts among them;
– ascendants of the second or higher degree (respectively the grandfathers/grandmothers, and great-grandfathers/great-grandmothers). The ascendants closer in degree (e.g. grandfathers/grandmothers) inherit in equal parts and exclude the ascendants from a higher degree (e.g. great-grandfathers/great-grandmothers).
If only one of the two groups above is present, that group obtains the whole estate as per the above parts.
If both of the two groups above are present, they inherit different parts of the estate as follows:
- 1/3 passes as a whole to the group of the ascendants; and
- 2/3 pass as whole to the group of the siblings.
The respective parts among the successors from the same group are calculated as per the above rules, applicable for that respective group.
4th level (since 1992): The successors from the 4th level inherit in case the deceased has left no heirs of 1st, 2nd and 3rd level. This level includes relatives on the lateral line up to (and including) the sixth degree. The main principle is that the ones closer in degree, as well as the descendants of a relative closer in degree, exclude those more distant in degree.
Rights of the surviving spouse of the deceased: The spouse is not included in any of the abovementioned levels, because he/she inherits based on the marital relationship with the deceased. In case of divorce or annulment of the civil marriage, the former spouse will have no right to inherit. The husband or wife inherits together with the relatives of each of the above levels 1-3. The part that the spouse receives depends on the level 1-3 above with whom the spouse is entitled to inherit.
The parts are as follows:
- If the spouse inherits with 1st level successors, the spouse obtains a part equal to the parts of each successor from 1st level;
- If the spouse inherits with 2nd or 3rd level successors – the part of the spouse is determined as follows:
|Spouse inherits with||If the deceased passed away before the expiration of 10 years of marriage with the spouse||If the deceased passed away after the expiration of 10 years of marriage with the spouse|
|Ascendants OR Siblings (as detailed above)||1/2 part||2/3 part|
|Ascendants AND Siblings (as detailed above)||1/3 part||1/2 part|
- If there are no successors from levels 1-3 above, the spouse receives the entire estate and excludes the successors from the 4th level altogether.
The Bulgarian State or the respective Municipality obtain the estate, if there are no successors from any of the abovementioned levels and there is no spouse, or if all the abovementioned have rejected the estate or they are unworthy to inherit from the deceased.
Under Bulgarian law, the descendants, the parents and the spouse of the deceased are entitled to a reserved part of the estate. The above list of successors, entitled to obtain reserved part of the estate is exhaustive. In case of violation of the reserved parts by wills or gifts performed by the deceased, the IA sets forth a restitution procedure. The right to claim restitution of the reserved part is exercised in court within the statute of limitation of 5 years. This right to claim the reserved part is also inheritable.
The reserved parts for each of the entitled successors are as follows:
|A. No spouse|| |
B. There is a spouse
1 child (including adoptive)
|1/2 reserved part|| |
2/3 (altogether) reserved part. The spouse and the child receive equal parts of the reserved part.
2 children (including adoptive)
|2/3 reserved part|| |
3/4 (altogether) reserved part. The spouse and the children receive equal parts of the reserved part.
3 children or more (including adoptive)
|2/3 reserved part|| |
5/6 (altogether) reserved part. The spouse and the children receive equal parts of the reserved part.
II. RESERVED PARTS FOR PARENTS
|A. No spouse|| |
B. There is a spouse
1 or more parents
|1/3 reserved part|| |
2/3 (altogether) reserved part. In such case the parent(s) have 1/3 and the spouse has 1/3 part from the reserved part.
|III. RESERVED PARTS FOR THE SPOUSE IN DIFFERENT CASES|
|No children & No parents||With parent(s)||With Children|
|spouse||1/2 reserved part||1/3 reserved part||As per item I.B above - Reserved Part for Children.|
Note: According to Ruling No. 1 of 26.05.1984 of the Supreme Court Panel, if the spouse inherits with ascendants AND/OR siblings, and the deceased passed away before the expiration of 10 years of marriage with the spouse, the latter has 1/2 reserved part, while if the deceased passed away after the expiration of 10 years of marriage with the spouse, the latter has 1/3 reserved part.
Wills are made whenever a testator wishes arrangements other than those envisaged by intestate succession. The testator is entitled to dispose of whole or part of their property through a will.
In order to be able to validly dispose of their estate, the testator is to comply with the following requirements:
- to have completed the age of 18 years;
- to be of sound mind and
- not to be fully legally incapacitated.
In any case, the statements in the will are not to affect the reserved part of the successors, as discussed above in the previous section. This means that the successors with reserved parts are entitled to file claim in court for collecting their affected reserved parts which may respectively lead to a decrease in the statements of the will.
The IA regulates two possible forms of wills – notarized will and holographic will (handwritten).
- Notarized will: The will is drafted by the notary in the presence of two witnesses, who are to possess legal capacity. The testator expresses their will orally before the notary. The notary writes down the will expressed by the testator and reads it out loud to the testator and the witnesses. The notary is to detail all the above steps in the will and to stipulate the date and place of performance of its drafting. Finally the testator, the witnesses and the notary sign the notarized will. Specific formal regulations concerning the will apply in compliance with the Civil Procedural Code of the Republic of Bulgaria.
- Holographic will: The document needs to be handwritten by the testator in its entirety and then dated and signed by the testator. No witnesses are needed for this will. The signature is to follow directly after the text of the will regarding the disposal with the estate. The holographic will can be delivered to a notary for its safekeeping in a closed envelope. In such case the will is kept in a special purpose register. The will can be kept anywhere else by a third party. In the latter case, after gaining knowledge of the death of the testator the third party is obliged to immediately request a notary to officially announce the will. When the holographic will is kept by a notary, that notary performs the announcement of the will in compliance with the applicable requirements.
Copies of both types of wills concerning immovable property or immovable property rights are subject to registration with the Bulgarian Property Register after the announcement of the will.
The Republic of Bulgaria is one of the countries that collect inheritance and gift taxes.
A. Inheritance Tax – basic rules:
Bulgarian citizens inheriting property in Bulgaria and/or abroad and foreign individuals inheriting property in Bulgaria are obliged to pay inheritance tax.
No inheritance tax is due by:
- the surviving spouse and
- all the descendants and ascendants of the deceased without limitation.
The estate is valued in BGN at the date of death of the deceased. A taxable inheritance pool is calculated (where certain sums are deducted from this pool in compliance with the applicable provisions). Each successor owes inheritance tax, proportionate to their respective inheritance share.
Shares below BGN 250,000 are exempt from taxation.
Each Municipality is competent to determine the amount of inheritance tax, depending on the type of successor:
• For brothers and sisters and their children – the inheritance tax is determined within the range of 0.4 % - 0.8 % for inheritance shares exceeding BGN 250,000;
• For other successors – the inheritance tax is determined within the range of 3.3 % - 6.6 % for inheritance shares exceeding BGN 250,000.
By law, certain assets are explicitly exempt from inheritance taxation under specific statutory provisions – e.g. common pieces of furniture, musical instruments, unreceived pensions of the deceased, etc.
B. Gift Tax:
Bulgarian property granted as a gift is subject to gift tax under Bulgarian law.
Gifts of assets received by ascendants and descendants of the benefactor, as well as by his/her spouse are exempt from gift tax.
The gifted asset is valued in BGN as on the date of transfer of the asset.
Each municipality is competent to determine the amount of gift tax, depending on the type of the beneficiary:
• within the range of 0.4 % - 0.8 % - for gifts between brothers and sisters and their children, and
• within the range of 3.3 % - 6.6 % in case of gifts between other persons.