When someone dies in Luxembourg, it's time to register the death with various bodies and organize the deceased's estate. We tell you all about it.
What to do in the event of death in Luxembourg
Declaration of death to the commune of death
In the event of the death of a close relative, the death must be reported within 24 hours to the local authority where the death occurred, together with the medical certificate issued by the doctor who certified the death.
The declaration of death can be made by a relative of the deceased, or by the funeral director contacted by the deceased's family.
Other documents must be provided: the deceased's family record book, and/or all identity papers, a certificate of committal in the case of burial, or a medical certificate of non-violent death in the case of cremation.
The commune will draw up the death certificate and issue a burial or cremation permit.
Administrative procedures in the event of death
Copies of death certificates must be provided to the various organizations:
- banking organizations. In the event of death, you must notify the banks holding an account in the person's name. They will take all necessary steps to sequester the accounts pending settlement of the estate. Please note that this also applies to joint accounts or safe-deposit boxes.
- health insurance. You may be entitled to a funeral expenses allowance
- death fund
- pension fund
- employer of the deceased and beneficiaries of extraordinary bereavement leave
- insurance company if life or death insurance policies exist
- notary to establish the estate
- consulate or embassy of the deceased's country of origin
- SNCT if the deceased owned a vehicle registered in his or her name
- Administration of registration, estates and VAT in connection with the declaration of inheritance.
Inheritance declaration in Luxembourg
A declaration of inheritance must be filed with the Land Registry and VAT Office within 6 months of the death.
The death certificate issued by the commune, the notarial deed in the case of a marriage contract and a cadastral extract in the case of property ownership by the deceased must accompany the declaration of inheritance.
Who inherits in Luxembourg in the event of death?
On the death of a Luxembourg resident, an estate is opened on all his or her assets and property. An order of succession determines who inherits and how much.
Heirs will have to pay inheritance tax, calculated differently depending on the status of the heir and the nature of the assets passed on.
Inheritance law and legatees in Luxembourg
Like its European counterparts (excluding Denmark, Ireland and the United Kingdom), Luxembourg signed a convention in 2015 stipulating that the deceased can choose in advance the law of succession applying to his or her estate in the event of death: country of residence or country of nationality. In the absence of an expressed wish, the inheritance law of the country of residence applies.
When the deceased has established his last principal residence or the seat of his wealth in Luxembourg, the succession applies as indicated in the Luxembourg succession order, in the absence of a will.
Beneficiaries may or may not be resident in Luxembourg.
Luxembourg inheritance order
In Luxembourg, people can designate their heirs by will, subject to a reserved portion. In the absence of a will, heirs are designated in the order of succession established by Luxembourg law.
1st order of succession in Luxembourg: descendants, children of the deceased
The children of the deceased (or their descendants by representation in the event of the prior death of one of them) inherit in equal shares. Whatever their status (legitimate, adulterine, adoptive or natural), they exclude all other heirs except the surviving spouse. Children are reserved heirs and cannot be disinherited.
2nd order of succession in Luxembourg: the surviving spouse
The surviving spouse enjoys a privileged status. In the absence of children, they inherit the deceased's entire estate. However, they can be excluded from the estate by will.
If there are children, and unless there is a special provision for the "quotité disponible spéciale entre époux", the spouse may opt to inherit the entire usufruct of the marital home and its furnishings (if he or she was the joint owner). In this case, the children receive bare ownership of the property and full ownership of the remainder.
The spouse may also opt for a share equivalent to that of the children, i.e. at least 1/4 of the estate.
3rd order of succession: relatives and collaterals of the deceased
In the absence of children and a surviving spouse, the parents and collaterals of the deceased are heirs reservataire.
They inherit 1/4 of the assets from each parent, with the remainder divided between the siblings or their representatives. If there are no collaterals, the parents inherit everything.
4th order of succession in Luxembourg: ascendants of the deceased
In the fourth order, the deceased's ascendants inherit half from the maternal branch and half from the paternal branch.
In this case, the nearest ascendant inherits the whole. In the absence of one of the branches, the whole devolves to the other branch.
5th order of succession: collateral relatives of the deceased
In the fifth order, the closest collateral of each branch,
maternal and paternal, inherits half of the deceased's assets from each branch. The succession goes up to the 4th degree, bearing in mind that in the absence of one of the branches, the whole devolves to the other branch.
6th order of succession in Luxembourg: the State
In the sixth and last order, the State will inherit the deceased's fortune in the absence of any other heir.
The designated heirs may accept the estate as is or subject to inventory (situation of assets and liabilities), contest it or renounce it.
What are the death duties?
Inheritance tax for a deceased Luxembourg resident
Estate assets for a deceased Luxembourg resident
Transfer duties are calculated on the net value of the deceased's estate assets, i.e. movable property owned in Luxembourg or abroad, and real estate located in Luxembourg.
Inheritance rights for real estate located abroad depend on the inheritance law of the country in question. Under certain conditions, movable property located abroad may be subject to inheritance tax in the country where it is held, depending on the nationality of the deceased.
Liabilities (the deceased's debts) will be deducted from the tax base.
Calculating inheritance tax for a deceased Luxembourg resident
Heirs must pay inheritance tax to the Luxembourg government, whether or not they are resident in Luxembourg.
Inheritance tax on assets acquired abroad is a matter for the tax authorities and inheritance tax authorities of the country concerned.
In the case of an inheritance in a direct descending or ascending line, the inheritance in Luxembourg will be exempt up to the limit of the legal share. In the case of a will, for example, the extra-legal share will be taxed at 2.5% or 5% depending on the case.
Similarly, inheritance between spouses is not taxable in Luxembourg, if the spouses or partners have joint children. Otherwise, the estate will be taxed at 5%.
Inheritances between collaterals are taxed at 6% for the legal share and 15% for the extra-legal share.
Beyond these special cases, inheritances are taxed at between 9% and 15% maximum.
Inheritance tax for a non-resident of Luxembourg
In the case of a non-Luxembourg resident, inheritance tax will be levied by the Luxembourg State on real estate located in Luxembourg, whether or not the heirs are Luxembourg residents.
In all cases, find out about your personal situation in the event of your death, with regard to your country of residence, your country of nationality, the place of residence of your potential heirs and the location of the assets to be transferred.
To find out more about inheritance tax in Luxembourg, visit guichet.lu.
Some products, such aslife insurance, enable beneficiaries to pass on their assets free of inheritance tax. These products are also very attractive financial savings vehicles for expatriates. Find out more directly from your bank or insurance company. They will be able to advise you.
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