Does Renouncing an Inheritance Shield an Indebted Heir?

Renouncing an inheritance is often regarded as a means of asset protection by an indebted heir (who is subject to enforcement proceedings).

However, the Brazilian Civil Code also protects the creditors of such defaulting heir. Pursuant to Article 1,813, when the renunciation of an inheritance is detrimental to the creditors of the renouncing heir, such creditors may, upon judicial authorization, accept the inheritance on behalf of the renouncing heir, to the extent necessary to satisfy their claims.

This constitutes an exception to the general rule that no one may be compelled to accept an inheritance, intended to prevent the depletion of assets disguised as a renunciation.

The creditor's acceptance, however, does not grant the creditor rights over any specific asset of the estate. This is because, until the estate is partitioned, the inheritance constitutes an indivisible universality of assets, governed by the rules applicable to co-ownership (Article 1,791 of the Brazilian Civil Code). Accordingly, the creditor who accepts the inheritance in place of the renouncing heir becomes a co-owner of the undivided estate (pro indiviso), rather than the holder of a specific asset subject to immediate enforcement.

In this regard, the Fourth Civil Chamber of the Court of Justice of the State of Mato Grosso do Sul recently issued an important decision. In that case, an indebted heir renounced the inheritance, but her creditors accepted her hereditary share in her place. Although the Court recognized the creditors' right to accept the inheritance, it did not authorize the sale of the estate's only real property before the partition for the purpose of satisfying the heir's personal debt. 

The Court further held that the sale of estate assets prior to partition is permitted only for the payment of debts owed by the estate itself, and not for the satisfaction of claims held by a particular heir's personal creditors. It also emphasized that the sale of a specific estate asset before partition is admissible only in exceptional circumstances, subject to the consent of all heirs and express judicial authorization, in accordance with the principle of the indivisibility of the estate.