Translation Notice — This is an English translation of a Hebrew law and may contain inaccuracies. In any dispute or legal matter, the original Hebrew text as published in Reshumot (ספר החוקים) is the sole authoritative and legally binding version.

Law

Inheritance Law, 5725-1965

חוק הירושה

Section D: Distribution of the Estate by an Estate Administrator

Time of Distribution

107.

(a)After the discharge of the estate's debts and maintenance from the Estate, the residue of the Estate shall be distributed among the heirs.

(b)The residue of the Estate may not be distributed so long as the period fixed in the creditors' notice has not elapsed; nor may it be distributed so long as the contingent rights dependent, pursuant to Section 3(b), upon the birth of a person have not been determined.

(c)The court may, if it finds that the Estate so permits, authorize the distribution of part of the Estate even before the discharge of the estate's debts and maintenance from the Estate and before the expiry of the periods under subsection (b).

(d)Where the testator has directed in the Will a later date for the distribution of the Estate, the provisions of the Will shall be followed, unless the court has ordered that the date of distribution be changed.

Residence and Maintenance During Transitional Period

108.

(a)A person who, on the eve of the testator's death, was residing with the testator in the testator's dwelling — whether the testator was the owner of the dwelling or had rented it — shall be entitled to continue residing therein for three months, or if that person was an heir, for six months following the testator's death; and that person shall be entitled, during such period, to use the movable property of the shared household to the extent that such property was used by that person on the eve of the testator's death.

(b)A person who, on the eve of the testator's death, was residing with the testator and whose maintenance was at that time provided by the testator, shall be entitled to receive maintenance from the Estate for one month following the testator's death.

(c)The rights under this Section shall not impose any obligation upon a person toward the Estate, nor shall they diminish an heir's share in the Estate; nor shall they add to or derogate from the provisions of the tenant protection laws, or derogate from the provisions of Section 115.

Subject Matter of Distribution

109.

(a)The assets of the Estate shall be distributed among the heirs according to their value at the time of distribution.

(b)The appreciation of the assets, their fruits, and everything that came in place of the assets from the testator's death until the distribution of the Estate — belong to the Estate; the same applies to the depreciation of the assets and to payments charged upon them.

(c)If, after the discharge of the estate's debts and maintenance from the Estate, the Estate is insufficient to cover all the shares, the shares shall be reduced in proportion to their value at the time of the testator's death, unless the Will contains a different provision in this regard.

Distribution by Agreement

110.

(a)The assets of the Estate shall be distributed among the heirs by agreement among them or by order of the court.

(b)The estate administrator shall propose to the heirs a plan for the distribution of the assets and shall endeavor to bring them to an agreement.

(c)Where one of the heirs is absent and is not duly represented, the approval of the court shall stand in place of that heir's consent.

(d)Where the assets of the Estate are distributed by agreement among the heirs, the provisions of Sections 112 to 117 shall not apply.

Distribution by Court Order

111.

(a)In the absence of an agreement among the heirs, the assets of the Estate shall be distributed among them by order of the court.

(b)The estate administrator shall bring before the court a plan for the distribution of the assets.

(c)Where the testator has directed in the Will how the assets of the Estate are to be distributed among the heirs, the court shall follow the provisions of the Will, unless it is satisfied, for reasons that shall be recorded, that there were special grounds to deviate from them; in the absence of such provisions in the testator's Will, the court shall follow the rules set out in Sections 112 to 117.

Distribution of Asset against Asset

112.

The assets of the Estate shall be distributed among the heirs in kind to the greatest extent possible, having regard to the benefit that a particular asset may bring to a particular heir and to the sentimental value that a particular asset holds for a particular heir.

Assets Not Capable of Division

113.

(a)An asset that is not capable of division, and an asset that by division would lose a significant proportion of its value — including a unit in agriculture, industry, craft, or commerce, but excluding an agricultural holding to which Section 114 applies — shall be transferred to the heir who offers the highest price therefor, provided that such price shall not be less than the market price; the amount offered by that heir shall be credited against that heir's entitlement from the Estate, and if it exceeds such entitlement, the heir shall pay the surplus amount.

(b)If no heir agrees to acquire the asset as provided in subsection (a), the asset shall be sold and the proceeds of sale shall be distributed.

(c)The court may order that the sale be conducted in the manner in which such assets are sold in execution proceedings or in such other manner as it may determine, and may fix the terms of payment under subsection (a) and the terms of payment of the proceeds of sale under subsection (b).

Agricultural Holding

114.

(a)An agricultural holding that constitutes a unit whose division would impair its capacity to subsist as an agricultural holding capable of supporting an agricultural family — shall be transferred to the heir who is willing and able to maintain it, and that heir shall compensate the other heirs to the extent that the value of the holding exceeds that heir's entitlement from the Estate.

(b)In the absence of agreement among the heirs as to which of them is willing and able to maintain the agricultural holding, what assets constitute the agricultural holding, what is the value of the holding for the purpose of calculation among the heirs, and as to the form of compensation to the other heirs, the timing of its payment, and its security — the court shall decide according to the circumstances.

(c)Where two or more heirs, including the testator's spouse, are willing and able to maintain the agricultural holding — the testator's spouse shall take precedence over the other heirs.

(d)Where an heir worked in the agricultural holding during the testator's lifetime or invested therein from that heir's own resources and did not receive remuneration such as another person would have received, this shall be taken into account in determining the said compensation.

The Residential Apartment

115.

[Amendment: 1976-2]

(a)With respect to an apartment of which the deceased was the owner on the eve of his death and in which he resided, his spouse, children, and parents who were residing therein at that time together with the deceased shall be entitled to continue residing therein as tenants of the heirs upon whom the apartment has devolved; the rent, the duration of the tenancy, and its terms shall be determined by agreement between those remaining in the apartment and those heirs, and in the absence of such agreement — by the court.

(b)The court may determine, upon the application of the said heirs:

(1)that only those who have no other apartment for residential purposes shall continue to reside in the apartment;

(2)that those remaining in the apartment shall continue to reside only in part of the apartment, provided that such part shall include the kitchen and utility rooms, if any exist.

(c)The provisions of sub-sections (a) and (b) shall also apply to an apartment leased by the deceased for a period exceeding twenty-five years and in which he resided on the eve of his death, where the tenancy was not terminated upon his death; and this, notwithstanding anything stated in the lease contract in that regard.

(d)With respect to an apartment leased by the deceased for a shorter period and in which he resided on the eve of his death, a right of tenancy therein under a contract that is not terminated upon the death of the deceased and that is not a right under the tenant protection laws, shall be transferred to his spouse, his children, and his parents who were residing in that apartment together with the deceased on the eve of his death.

Distribution by Lot

116.

Assets in respect of which it is not possible to act in accordance with Sections 112 to 115 shall be distributed among the heirs by lot.

Coordination of Rights of Several Heirs

117.

(a)Where the provisions of this Division confer a right upon one of the heirs, several heirs are also included if they have agreed to exercise that right jointly.

(b)Where several heirs wish to exercise that right each independently, the court shall decide among them.

(c)A single asset shall not be transferred to several heirs without their consent.

Distribution Inventory

118.

(a)The estate administrator shall submit to the court, within thirty days after the distribution of the Estate, an inventory of the distribution of the Estate and shall verify the completeness of the inventory by affidavit.

(b)The inventory shall specify the assets received by each of the heirs from the Estate and shall include a valuation of those assets at the time of distribution, unless the heirs have waived the valuation.

Further Distribution

119.

Where the Estate has been distributed and thereafter additional estate assets are discovered, those assets shall also be distributed in accordance with the provisions of this Division; however, that which has already been distributed shall not be redistributed except with the consent of those concerned or to the extent that the court considers that the prior distribution would have been made differently had the additional assets been known at the time.

Rectification of Distribution

120.

(a)Where the Estate has been distributed — whether by agreement among the heirs or by order of the court — and thereafter facts become known showing that the valuation of an asset of the Estate was erroneous by more than one-sixth, or that the Inheritance Order or the Probate Order on the basis of which the distribution was made has been amended or revoked, those who received more than their share shall be obligated to return the surplus to those who received less than their share, provided that a person who received assets of the Estate in good faith shall not be obligated to return more than what remains in that person's possession.

(b)In the absence of agreement between the parties, the court shall determine, according to the circumstances, whether the restitution shall be made in kind or in money.

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Section E: Administration and Distribution of the Estate by the Heirs

General Provision

121.

(a)Where an estate administrator has been appointed, the heirs may not deal with the estate except with the permission of the estate administrator or the court.

(b)Where no estate administrator has been appointed, the estate shall be administered and distributed by the heirs in accordance with the provisions of this Division.

Multiple Heirs

122.

[Amendment: 1976-2]

(a)In administering the estate, the heirs are required to act by mutual consent; in a matter on which their opinions are divided, they shall act as the court shall decide.

(b)An act by one or several of the heirs requires the consent of the others or the approval of the court, given in advance or retroactively. In proceedings brought by one of the heirs or against one of the heirs, the approval may be granted by the court adjudicating the proceedings.

(c)In a matter that does not admit of delay, any one of the heirs may act on his own initiative.

Summoning of Creditors

123.

(a)The heirs may summon the creditors of the deceased to notify them in writing of their claims; the summons shall be published publicly, and a period of not less than three months from the date of publication shall be fixed for the submission of such notification.

(b)Nothing in the provisions of this Section shall derogate from the obligation of the heirs to discharge the debts of the estate of which they have become aware by any means whatsoever.

Discharge of Debts

124.

The provisions of Sections 100 to 106 shall apply, with the necessary modifications, to the discharge of the debts of the estate by the heirs.

Distribution of the Estate

125.

The provisions of Sections 107 to 120 shall apply, with the necessary modifications, to the distribution of the estate among the heirs; the submission of a distribution inventory as referred to in Section 118 shall be at the discretion of the heirs, whether all or some of them.

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Section E1: Alternative Procedure for the Settlement of Debts from Estate Funds Without Appointment of an Estate Administrator and Not by the Heirs

Definitions – Internal

125a.

In this Division –

"alternative procedure for settling a liquidated debt from estate funds" – a procedure for collecting a liquidated debt from estate funds pursuant to the provisions of this Division;

"liquidated debt" – an obligation whose due date for payment has arrived and which has not yet been paid, and the time for filing an appeal in respect thereof has elapsed and no appeal was filed, or an appeal was filed and dismissed by a final decision that is no longer subject to appeal, or in respect of which a final judgment has been given; in this definition, "appeal" – including an objection or a review, as the case may be;

"collection officer" – as defined in the Tax Ordinance (Collection), and with respect to the Center for Collection of Fines, Fees and Costs – the director of the Center or an employee of the Center whom the director has authorized for the purposes of this Division;

"maximum amount" – 20,000 New Shekels or such other amount as determined pursuant to the provisions of Section 125ja;

"Bankruptcy Ordinance" – the Bankruptcy Ordinance [New Version], 5740–1980;

"authority" – a body that is a creditor of a decedent, listed in the First Schedule, including the Center for Collection of Fines, Fees and Costs;

"banking corporation" – a banking corporation as defined in the Banking (Licensing) Law, 5741–1981, which has submitted a notice regarding the holding of an asset in its possession as referred to in Section 7a(1) or (2) of the Tax Ordinance (Collection), in respect of an asset of a decedent.

Transfer of Estate Funds to an Authority Pursuant to a Debt Collection Request

125b.

[Amendment: 5778-2]

Notwithstanding the provisions of Section 104 as applied by Section 124, where a banking corporation has received a debt collection request from an authority as referred to in Section 125c, it shall transfer to the authority, in accordance with the request, an amount from the estate funds held by it not exceeding the maximum amount, all in accordance with the provisions of this Division.

Application for Debt Collection

125c.

[Amendment: 2018-2]

(a)The Collection Officer of an authority may apply to a banking corporation that has submitted to that authority a notice regarding the existence of an asset in its possession as set out in Section 7a(1) or (2) of the Tax Ordinance (Collection), for the purpose of collecting a final debt of the decedent from the Estate funds (in this Division – an application for debt collection), if all of the following conditions are met:

(1)The Collection Officer has examined and found that all of the following apply:

(a)At least one year has elapsed from the date of the decedent's death;

(b)The total amount of the decedent's final debts to that authority does not exceed the maximum amount; for this purpose, all amounts settled under this Division by that authority shall be taken into account, even if settled at different times;

(c)There is no pending application for an inheritance order or an order for the execution of a Will in respect of the Estate;

(d)No inheritance order or order for the execution of a Will, as the case may be, has been granted in respect of the Estate, and if such an order has been granted – six months have elapsed from the date the order was granted and the heirs have not acted to summon the decedent's creditors pursuant to Section 123;

(e)The Registrar of Inheritance Affairs has not appointed an Estate administrator, and no application for the appointment of an Estate administrator has been submitted to the Registrar;

(f)No receiving order as referred to in Section 6 of the Bankruptcy Ordinance, or an order for the administration of the Estate in Bankruptcy as referred to in Section 202 of that Ordinance, has been granted in respect of the decedent;

(2)No notice has been delivered to the Collection Officer to the effect that an Estate administrator has been appointed by a court, that there is a pending application before a court against the Estate for the appointment of an Estate administrator or an application for the administration of the Estate in Bankruptcy under the Bankruptcy Ordinance, or that there is a pending bankruptcy application against the decedent before a court under that Ordinance;

(3)The time period for filing an objection as referred to in Section 125e has elapsed and no objection has been filed;

(4)The Collection Officer has re-examined the fulfillment of the conditions in paragraph (1)(c) through (f), no earlier than seven days before the application to the banking corporation;

(5)The legal counsel of the authority has confirmed that they have received from the Collection Officer of the authority documents evidencing the fulfillment of the conditions set out in paragraphs (1) through (4).

(b)For the purpose of examining the fulfillment of the conditions in subsection (a)(1)(c) through (e), the Collection Officer shall consult the national registry within the meaning of Section 73d.

(c)The Minister of Justice may prescribe provisions regarding the manner in which an application for debt collection shall be carried out by an authority under the provisions of this Division.

Publication and Delivery of Notice of Intent to Submit an Application for Debt Collection

125d.

[Amendment: 2018-2]

(a)An authority seeking to apply to a banking corporation for the purpose of collecting a debt pursuant to the provisions of Section 125g shall take all of the following actions, after having examined the fulfillment of the conditions for an application for debt collection set out in Section 125g(a)(1)(a) through (f):

(1)It shall publish, at its own expense, a notice to that effect in the manner prescribed by the Minister of Justice by Regulations;

(2)It shall send a notice pursuant to paragraph (1) by registered mail to creditors known to it;

(3)It shall send a notice pursuant to paragraph (1) by registered mail to the spouse and children of the decedent, and if an inheritance order or an order for the execution of a Will has been granted – to the heirs.

(b)In a notice pursuant to subsection (a), the authority shall set out all of the following:

(1)The identity particulars of the decedent as prescribed by the Minister of Justice by Regulations;

(2)Notice of the intention to realize a debt under this Division in respect of the Estate funds seized in an account held in the name of the decedent at the banking corporation, all as prescribed by the Minister of Justice by Regulations;

(3)The right of an heir or a creditor of the debtor to file with the Collection Officer of the authority an objection to the application pursuant to Section 125e, and the time period for filing the objection;

(4)The particulars of the authority as prescribed by the Minister of Justice by Regulations.

Objection to Collection of a Liquidated Debt from Estate Funds

125e.

[Amendment: 5778-2]

(a)An heir or a creditor may file with the collection officer of the authority that published or dispatched a notice pursuant to Section 125d an objection to the collection of a liquidated debt from estate funds pursuant to the provisions of this Division, in the manner prescribed by the Minister of Justice by Regulations, within 45 days from the date of publication or delivery of the notice as referred to in Section 125d, as the case may be (in this Section – an objection).

(b)An heir may not file an objection unless the heir has filed with a court or with the Registrar of Inheritance Affairs an application pursuant to this Law for an inheritance order, an order for the execution of a will, or an order for the appointment of an estate administrator.

(c)A creditor may not file an objection unless the creditor has filed with the Execution Office a request for the enforcement of a judgment against the debtor, or has filed with a court or with the Registrar of Inheritance Affairs an application for an order appointing an estate administrator for the debtor's estate pursuant to this Law.

(d)Where an objection has been filed, the collection officer shall discontinue the alternative procedure for settling a liquidated debt from estate funds.

(e)Notwithstanding the provisions of subsection (b), where an objection has been filed by an heir as referred to in that subsection and six months have elapsed from the date on which the inheritance order or the order for the execution of the will was granted, and the heir has not acted pursuant to Section 123 to notify the decedent's creditors, the authority may submit a request to the banking corporation for the collection of the debt if the remaining conditions of Section 125c(a) are satisfied.

(f)The provisions of this Section shall not apply to an authority where the total amount of the liquidated debts owed to it by the decedent does not exceed the maximum amount as referred to in Section 125c(a)(1)(b).

Discontinuation of Alternative Procedure for Settling a Liquidated Debt from Estate Funds

125f.

[Amendment: 5778-2]

Where an authority has published a notice pursuant to the provisions of Section 125d, and the collection officer finds, based on information provided to the collection officer, that a condition among the conditions for submitting a debt collection request as referred to in Section 125c(a)(1)(b) through (f) or (2) has ceased to be satisfied, the following provisions shall apply:

(1)If the collection officer has not yet submitted a request to the banking corporation for the purpose of collecting the debt – the collection officer shall discontinue the alternative procedure for settling a liquidated debt from estate funds;

(2)If the collection officer has submitted a request to the banking corporation for the purpose of collecting the debt – the collection officer shall notify the banking corporation of the cancellation of the request;

(3)Where a banking corporation has received a notice of cancellation of the request as referred to in paragraph (2), it shall not transfer funds to the authority in accordance with the request.

Additional Debt Collection Requests

125g.

[Amendment: 5778-2]

Where a banking corporation has received two or more debt collection requests in respect of the same decedent, the following provisions shall apply:

(1)The total amount of debts settled pursuant to the provisions of this Division shall not exceed 60,000 New Shekels;

(2)Where the total amount of debts in respect of which the banking corporation has received collection requests pursuant to the provisions of this Division exceeds 60,000 New Shekels or the balance in the bank account, whichever is lower, the debts shall be settled pursuant to the provisions of Section 125b in proportion to their respective amounts;

(3)Where a banking corporation, after having transferred funds in accordance with one or more debt collection requests (in this paragraph – prior requests), receives an additional debt collection request (in this paragraph – new request), and as a result of the new request the provisions of paragraph (2) apply, the banking corporation shall transfer to the authority, in accordance with the new request, an amount not exceeding the difference between 60,000 New Shekels or the balance in the bank account, whichever is lower, and the total amounts transferred by the banking corporation in accordance with the prior requests.

Restitution

125h.

[Amendment: 5778-2, 5784-2]

Where a liquidated debt has been settled to an authority pursuant to the provisions of this Division, and a court has found, upon application by a creditor, an heir, or the estate administrator, that the authority is required to return the funds it received in accordance with the debt collection request, in whole or in part, including by reason of the order of priority for settling estate debts as referred to in Section 104, the authority shall return the funds it received, in whole or in part, to such person and in such manner as the court directs, together with shekel interest as defined in the Interest and Linkage Law, 5721–1961, from the date of receipt of the funds until the date of return, and the provisions of that Law shall apply with respect to such interest, with the necessary modifications.

Exemption from Liability

125i.

[Amendment: 5778-2]

A banking corporation shall not bear civil liability if it acted in accordance with the provisions of this Division.

Application of Provisions – External

125j.

The provisions pursuant to Section 7b of the Tax Ordinance (Collection) with respect to a seizure order or a delivery order, including the provisions regarding the issuance of such an order and the obligation to deliver a seized asset in accordance with the order, shall apply, with the necessary modifications, with respect to a debt collection request made by the collection officer and the transfer of estate funds to an authority by the banking corporation in accordance with such a request, pursuant to the provisions of this Division.

Amendment of the Maximum Amount

125ja.

[Amendment: 5778-2]

The Minister of Justice, with the approval of the Constitution, Law and Justice Committee of the Knesset, may amend, by Order, the maximum amount.

Preservation of Laws

125jb.

[Amendment: 5778-2]

Nothing in the provisions of this Division shall derogate from the provisions of the Bankruptcy Ordinance.

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