Inheritance is a fundamental institution of succession law, as it governs the transfer of a person’s estate upon death. Under Cyprus law, an estate devolves upon those entitled to it either by virtue of a will or in accordance with the rules of intestate succession. The Wills and Succession Law, Cap. 195, provides that, upon a person’s death, his or her estate devolves upon one or more persons.

At the same time, Cyprus law recognises the right of an heir not to accept an inheritance. Renunciation is not merely a declaration that someone “does not want” his or her share, but rather a legal act carrying specific consequences and subject to strict requirements.

This procedure should not be confused with the subsequent transfer or gift of an inherited asset, which constitutes an exercise by the heir of his or her rights in respect of the inherited property.

Three months and a prescribed form

Of particular importance is section 51 of the Administration of Estates Law, Cap. 189.

An heir may unconditionally renounce the inheritance within three months from the time when both the death of the deceased and the fact that he or she is an heir first came to his or her knowledge.

The renunciation is effected by filing a declaration in the registry of the competent court in the prescribed form.

The three-month time limit is not merely a procedural guideline. In Stavrinides v. Republic (1987) 3 C.L.R. 1228, the Supreme Court held that a renunciation made after the expiry of the prescribed period was invalid.

It also held that the relevant document must comply with the prescribed Form 18 and that the receipt of a benefit from the estate is incompatible with a valid renunciation.

The same principle was clearly reaffirmed in the recent judgment of the Limassol District Court in Action No. 1038/2019, dated September 2.

In that case, the document in question was dated six months after the death, while it was undisputed that the heir had known from the outset both of the death and of her status as an heir. The court held that the time limit prescribed by section 51(1) is mandatory and that failure to comply with it rendered the renunciation invalid.

Without conditions and without a designated beneficiary

The recent judgment reiterates that a renunciation must be unconditional. An heir withdraws from the succession without being entitled to determine who will benefit from that decision. In other words, an heir cannot renounce his or her share “in favour of” a particular child, relative or other person.

In the case decided on September 2, the document in question purported to renounce the inheritance in favour of a daughter. The court held that a renunciation in favour of a third party constitutes a qualified and conditional renunciation and, consequently, does not satisfy the requirement of section 51(1).

Renunciation, therefore, is neither a mechanism for redistributing an estate nor a means by which an heir may select a new beneficiary.

Renunciation or gift?

The distinction is of considerable practical importance. If an heir’s true intention is to benefit a particular person, renunciation is not the appropriate legal mechanism.

The heir must retain his or her share and, if desired, subsequently transfer or gift it in accordance with the procedure prescribed by law for the particular asset concerned.

Stavrinides expressly distinguished renunciation from a gift. In relation to immovable property in particular, the Supreme Court pointed out that a gift is completed by the actual transfer of the property at the competent District Lands Office. An intention to make a gift is not equivalent to a completed gift.

The consequences of the choice

A timely and valid renunciation carries full legal consequences. The heir’s intention must be genuine, free and unequivocal, and must be expressed precisely in the manner prescribed by law.

An heir who renounces an inheritance is not liable for the deceased’s debts, but neither may he or she derive any benefit from the estate.

Furthermore, a renunciation made with the intention of defeating the rights of creditors may, subject to the requirements of section 51(3), be set aside by the Court.

The strict approach adopted by the legislature is both justified and necessary. Renunciation concerns not only the wishes of an individual heir but also affects the distribution of the estate, the rights of the other heirs and, potentially, the interests of creditors and third parties.

For this reason, the law does not permit an heir to “direct” his or her share through renunciation. If the heir wishes to benefit a particular person, he or she must first acquire what is lawfully due and thereafter dispose of it through the appropriate legal means. Renunciation is the relinquishment of a right; it is not a gift.