The Government has presented a proposal for a far-reaching reform of succession law based on two fundamental pillars: (I) strengthening the heirs’ right to partition; and (II) granting the deceased greater freedom to determine the effects of the succession.
I. Strengthening the heirs’ right to partition
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Formalisation and time limitation of indivision
The proposal requires the formalisation of any agreement to maintain the estate in indivision. Such agreement must be set out in an authenticated private document and may not exceed a period of five years, without prejudice to the possibility of renewal by means of a new agreement.
In the absence of such agreement:
(a) any heir has the right to request the sale of undivided immovable property after two years have elapsed from the date of the opening of the succession, or without any time limit where judicial probate proceedings have been initiated;
(b) the head of the estate, once five years have elapsed from the opening of the succession or two years from the expiry of the indivision agreement, must promote partition by agreement or apply for judicial probate proceedings.
Nevertheless, the right to partition the estate is temporarily restricted in the following situations:
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- Until the complete and live birth of a conceived unborn child to whom the estate has been deferred;
- Where the estate has also been left to a child not yet conceived, provided that the deceased has fixed a period of indivision, which may not exceed five years from the opening of the succession;
- Where consent has been given for post-mortem insemination, during the three years following the opening of the succession or until the complete and live birth of the unborn child, provided that the legally admissible insemination procedures are pending.
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Reduction of the period for accepting the inheritance
The limitation period for exercising the right to accept the inheritance is reduced from 10 to 2 years, counted from the moment when the successor becomes aware that he or she has been called to the succession.
This amendment reduces uncertainty and accelerates the succession process, although it limits the time available to the heir to:
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- Ascertain the liabilities;
- Value the assets;
- Decide whether to accept or renounce the inheritance.
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Strengthening the powers/duties of the head of the estate
The proposal clarifies and strengthens the powers of administration and liquidation of the estate attributed to the head of the estate.
It introduces a change of paradigm in estate management, granting greater flexibility in the performance of acts of administration, namely the collection of estate receivables, the disposal of fruits and assets subject to deterioration, as well as the allocation of the respective proceeds to the needs of the estate.
At the same time, the proposal establishes the duty of the head of the estate to promote partition within a defined period, reinforcing his or her responsibility for the swift and efficient conduct of the succession process and helping to avoid the perpetuation of situations of indivision.
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The new special sale procedure
4.1. General framework
Through this mechanism, and whenever there is no agreement to maintain the indivision, any heir, the surviving spouse entitled to a share in the marital property and, in the specifically provided cases — for example, where there are immovable assets whose value makes partition difficult or impossible and there is no agreement on their allocation or on equalisation payments — the executor with partition powers may judicially promote the sale of an immovable asset included in the estate, without requiring the consent of the remaining interested parties.
This is without prejudice to cases involving legally incapacitated or absent interested parties, in which the proposal provides for the intervention of the Public Prosecutor’s Office and requires consent and judicial authorisation.
This procedure is urgent in nature and may run autonomously or within pending inventory proceedings.
However, if the immovable asset is held in co-ownership, it may only be sold after the prior division of the co-owned property.
4.2. Structure of the procedure — without judicial probate proceedings
Declaratory phase
This phase is intended to verify the conditions required for the sale and to determine the base price.
It includes:
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- Complaint;
- Opposition, with possible counterclaim and reply;
- Case management and preliminary hearing;
- Determination of the sale price in the event of disagreement;
- Decision ordering enforcement.
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The procedure may be suspended for up to 6 months, extendable for a further 2 months, in order to attempt a negotiated sale or reach a partition agreement.
The base price is determined on the basis of expert valuation, with the court being responsible for determining the price in case of disagreement. The proposal also further defines the criteria for setting the base price, providing for the use of the average or median of the valuations, depending on the number of valuations available, as well as a new valuation where there is a significant discrepancy between the values presented.
Enforcement phase
This phase consists of the actual implementation of the sale, with electronic auction being the default regime.
The judge may also provide, in the order directing enforcement, for a reduction of the base price in the event of unsuccessful auctions, either progressively or through a single repetition, provided that such reduction does not exceed 15% of the fixed base price.
4.3. Rights of heirs and creditors
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- Right of redemption granted to the heirs and to the surviving spouse entitled to a share in the marital property, taking precedence over pre-emption rights, and exercisable until the delivery of the asset or the signing of the document evidencing such delivery;
- Full payment of the price is required for the exercise of the right of redemption, and no waiver of deposit or allocation to the heir’s share may be requested;
- Possibility of bidding between redeemers in equal circumstances.
The following are also safeguarded:
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- Creditors with security interests, with the right to be summoned and to have their claims satisfied;
- The Tax Authority and Social Security.
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4.4. Relationship with judicial probate proceedings
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- The pendency of the sale does not prevent the commencement of judicial probate proceedings;
- If judicial probate proceedings are initiated, the sale procedure will run as an ancillary proceeding;
- In judicial probate proceedings, the sale will follow its own specific rules;
- In notarial probate proceedings, the procedure remains autonomous.
4.5. Limitations on the sale
As a rule, the following may not be sold:
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- Assets donated or bequeathed by the deceased;
- Assets intended to form part of the heirs’ shares;
- Assets under the administration of an executor with partition powers;
- The family home, without the express consent of the surviving spouse, given in the proceedings or in authentic form;
- Seized assets.
Exception: the seizure of a hereditary share does not prevent the procedure from proceeding, but determines that it continues as a sale with subrogation of the price in place of the assets sold.
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In the case of the family home, the surviving spouse is advised to invoke in the proceedings:
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- The nature of the property;
- The right provided for in Article 2103-A of the Portuguese Civil Code — the right of the surviving spouse to be allocated, at the time of partition, the right of habitation of the family home and the right of use of its contents;
- The exclusion of the sale or, alternatively, a sale subject to the relevant burden;
- The separate valuation of the right of habitation.
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Recourse to this special procedure is also excluded where, pursuant to the law, the heirs are not yet entitled to exercise the right to partition or where the estate is insolvent.
II. Greater freedom for the deceased
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Binding composition of the forced share
The deceased may define, in a manner binding on the heirs, the composition of the hereditary shares, unlike under the current regime.
At present, a forced heir is not required to accept the legacy imposed by the testator to satisfy his or her forced share.
The regime on reduction of excessive testamentary dispositions remains in force.
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Succession waiver between spouses
It becomes possible for spouses to waive reciprocally, in a prenuptial agreement, their status as legal, statutory and forced heirs.
This solution goes beyond the current regime, which allows reciprocal waiver of the status of forced heir of the other spouse, now extending such waiver to the status of legal, statutory and forced heir.
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Charges on the forced share
The proposal relaxes, within the legally prescribed limits, the rigidity of the current regime prohibiting the imposition of charges on the forced share, allowing the testator, where expressly authorised by law, to impose charges or designate the assets that are to satisfy it.
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Strengthening the role of the executor
4.1. New status
The testator may appoint one or more persons to supervise the fulfilment of the will, execute it in whole or in part, administer the estate, liquidate it or partition it: this is known as executorship.
After the assets have been listed and valued, and once the estate charges have been fulfilled, the executor must hear the heirs and prepare a binding partition statement, observing the mandatory legal rules, the testator’s instructions and any agreements entered into with the interested parties.
Acceptance of the executorship must be express, granted by authentic document or made in connection with the declaration of heirs, where the executor acts as head of the estate.
The proposal also provides for the remuneration of the executor with partition powers, according to professional tariffs, usages or, subsidiarily, equitable criteria, unless the testator determines that the role is to be performed free of charge or provides for another form of remuneration.
The creation of this figure is intended to make the whole succession process more expeditious, removing from the heirs the initiative for partition and the definition of its terms, and establishing that the role of head of the estate is to be preferentially assigned to the executor.
4.2. Limitations
Where there are common marital assets as a result of the applicable matrimonial property regime, the preferential assignment of the role of head of the estate to the executor invested with partition powers depends on the consent of the surviving spouse entitled to a share in the marital property, given before a notary.
Such consent may be freely revoked; however, where revocation occurs after the testator’s death, it must be reasoned. In such a case, the executor’s partition powers are limited to the deceased’s own property and to his or her share in the common marital assets, excluding from the executor’s intervention the share belonging to the surviving spouse.
Notwithstanding the breadth of the powers conferred, the executor does not act discretionarily: his or her conduct is bound by the law, the testator’s instructions, the mandatory rules of succession and the duties inherent in administration, liquidation and partition.
4.3. Practical consequences
Where an executor with partition powers has been appointed, partition by inventory proceedings is not admissible, except where, by legal requirement, partition must be carried out through judicial inventory proceedings.
This new figure acts as a true estate manager, with broad powers of administration, liquidation and partition. In short, decision-making power is shifted from the heirs to the testator, through the executor.
Where there is an executor with partition powers, the heirs may not sell or dispose of the estate assets under the executor’s administration, without prejudice to their ability to sell the estate or their respective hereditary share. This may be an important exit route where they do not agree with the executor.
Conversely, the executor must allow the heirs to use the estate assets, maintaining the type of use or purpose previously given to them by the deceased, provided that such use does not impair the requirements of administration.
4.4. Impact
This new context turns the executor into a complex legal and patrimonial manager, with a direct impact on the heirs’ rights. In practice, the testator should choose someone with legal knowledge, the ability to manage conflicts and an understanding of patrimonial responsibility. For this reason, it is advisable to appoint a lawyer, solicitor or another person with the appropriate knowledge and technical qualifications.
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Succession arbitration
The proposal allows the testator to impose arbitration for the resolution of succession disputes, without excluding judicial recourse.
This regime does not exclude judicial porbate proceedings, nor does it determine that such proceedings are to be conducted by arbitrators.
The proposed succession arbitration is limited to disputes of a patrimonial nature, and the arbitrators must decide according to the applicable law, without recourse to equity. The arbitral decision may be appealed to the competent Court of Appeal, with merely devolutive effect.
III. Temporal application
As a general rule, the new regime applies immediately to estates already opened and not yet partitioned.
However, pending judicial probate proceedings that are already at a more advanced procedural stage may benefit from a transitional safeguard regime, particularly where the conference of interested parties has already been scheduled.
The transitional regime seeks to reconcile the immediate application of the new regime to estates already opened and not yet partitioned with the protection of procedural situations that have already stabilised. Thus, in estates already opened, the time limits for requesting a judicial sale only start running from the entry into force of the legislation, and certain procedural amendments only apply to pending judicial probate proceedings where they are still at a stage compatible with the introduction of the new powers.
In practice, this solution amounts to an adaptation period designed to protect the legitimate expectations of the heirs. It therefore prevents an heir, in estates opened before the entry into force of the legislation, from immediately exercising the new right to request the judicial sale of immovable assets as soon as the legislation enters into force.
Conclusion
Draft Law No. 69/XVII/1 represents a significant change to the traditional paradigm of Portuguese succession law, seeking to address a recurring practical problem: the perpetuation of undivided estates, often associated with the deterioration of real estate assets, the blocking of their economic exploitation and increased litigation between heirs.
The strengthening of the right to partition, the creation of a special sale procedure for immovable assets included in undivided estates and the imposition of stricter time limits to overcome indivision reflect a clear legislative choice in favour of speed, economic efficiency and the circulation of assets, particularly immovable assets that remain unused or underused.
At the same time, the proposal grants the deceased greater scope to shape the destination of his or her assets, allowing him or her to influence more firmly the composition of the hereditary shares, designate assets to satisfy the forced share, appoint an executor with partition powers and, in certain patrimonial matters, submit succession disputes to arbitration.
These solutions may bring significant gains in terms of predictability, speed and effectiveness, but they are not without risks. The concentration of powers in the executor, the practical limitation of the heirs’ room for action, the coordination with the protection of the forced share, the safeguarding of the surviving spouse and the protection of the interests of incapacitated persons, absent persons and creditors will require particular caution in the application of the new regime.
In particular, the possibility for the testator to determine, with binding effect, the assets that are to make up the forced share of the heirs must be coordinated with the traditional mechanisms for protecting the forced share, namely the reduction of excessive testamentary dispositions, which will continue to play an essential role in ensuring the patrimonial sufficiency attributed to forced heirs.
In short, the proposal introduces relevant instruments to unblock paralysed succession situations, but it also reinforces the need for legally rigorous estate planning. Succession is no longer seen merely as a moment of patrimonial transfer after death, but rather as requiring prior strategic planning capable of reconciling the testator’s wishes, the rights of the heirs, the protection of the surviving spouse and the preservation of the economic value of the estate assets.
At Belzuz Advogados, S.L.P. — Portugal Branch, we advise national and foreign clients on estate planning, inheritance partition, judicial probate proceedings, patrimonial regularisation and the resolution of succession disputes, ensuring an integrated, preventive approach tailored to the specific features of each case.