You’ve Got it Coming To You

Another article from a back issue of The Economist was interesting to me.  This was  from the October 17th issue, and had to do with inheritance laws in Europe as opposed to Great Britain.  It was written by the Economist’s commentator on European politics, Charlemagne (not the Roman Emperor, I’m pretty certain – though that would be pretty cool, for a variety of reasons).  His article highlighted the gulf between the UK and the rest of Europe in terms of inheritance laws. 

In the UK, like the USA, people are free to dispose of their property pretty much however they like – and that doesn’t change at death.  The exception are some relatively recent laws that ensure that widows and other dependents living in poverty can receive maintenance payments from the estate.

In most of Europe, however, there are rather strict laws that limit how someone disposes of their estate.  In some countries, these rules kick in actually before the person dies.  Charlemagne notes that in laws restricting how much of a person’s wealth can be given away are retroactive to two years from the date of death in Austria, and ten years from the date of death in Germany.  In other countries, there are no time limits, meaning that heirs could conceivably litigate to have estate assets returned that were given to anyone else, at any point in the deceased’s lifetime.  At least 50% of an estate has to be divided equally between inheritors.

The presenting issue for this little treatise on inheritance treatment is the fact that the EU is trying to put together a comprehensive legal framework for dealing with inheritance issues that span multiple countries – each potentially with their own unique laws.  Amongst the well to do, this is hardly an unusual situation – owning property in multiple countries or being a citizen of one country while choosing to reside in another (and potentially die in yet another!). 

Charlemagne points out how this difference in the treatment of estates reflects an underlying, fundamental difference between the mindsets of the UK (and by extension the United States), and continental Europe.  The UK and the US are concerned with individual freedom, and from the motivation that arises in people who know that they are free to do with their wealth as they pretty much please.  Europeans, however, are more concerned with “solidarity within the family”.  Never mind if the family is composed of some fairly irresponsible or even dangerously self-obsessed folks.  It’s more important that they all get an equal amount, rather than face some sort of divisiveness that could result from a more deserving child receiving a greater bulk of the inheritance than a less responsible child.  This approach is intended to help even out or eliminate the uncertainties of life that could be encountered if a dying person was free to distribute their assets as they saw fit.  This way, people know what they’ve got coming, so to speak – even if they don’t deserve it.  The UK/American approach seems to acknowledge that there are no guarantees in life – and this extends to the inheritance that one might receive (or not receive) from a rich uncle or a well-to-do mother. 

Charlemagne also noted how both the Europeans and the UKers were equally baffled by the other’s solution.  Neither side could understand the logic behind the other side’s way of handling things.   This makes perfect sense.  On the one hand, you have an option that not only acknowledges the unpredictability of life, it seems to celebrate it.  On the other side, you have an insistence that such unpredictability be eliminated.  An insistence that people be buffered and cushioned from the blows of life that might otherwise befall them – sometimes deservedly so.  It’s an interesting difference in attitude, one that runs not simply through politics and economics, but at least at some level, through theology as well.

3 Responses to “You’ve Got it Coming To You”

  1. Marie Says:

    I wonder, too, though if there is a bit of a difference historically in wealth in the different nations. I think Belloc? said that if you are poor making a million is hard, but once you have a million making the next is automatic? If I inherit an estate, a la European aristocratic tradition, I can see a way of thinking that says that not all of the money I die with is “mine” — it belongs to the “family” because it came from the family. It is property held in common, and just because some of the property holders are dead and some are yet to be born doesn’t make it less so. Seems unlikely to factor in the modern world, and certainly wouldn’t factor for all individuals, but there might be some national memory of a time when it did matter for all the classes that actually bothered with estate law? I kick pretty hard against the idea that my relatives owe me a thing upon their deaths. I consider my parents’ money to be their money to spend or burn or give to the butler if they like. But I’m not sure why I feel so strongly about it. Maybe its an individualism thing, maybe its just a defense of private property, but maybe its because my folks were pretty working class and any money they have they came by through work.

  2. Paul Nelson Says:

    I think there’s a fair historical argument to be made that Britain developed significantly different than the continent.  Things like the Magna Carta in the early 13th century highlight concepts of civil liberty and the notion that the monarchy and ruling class is fundamentally the same as everyone else, concepts that would not really come to the Continent in a meaningful way until after the French Revolution.  Granted, these were high-falutin’ principles that were not widely adopted – but the groundwork was laid in the national psyche a lot earlier than on the Continent.  And things like the French Revolution highlight the Continent’s greater obsession with egalitarianism and the notion of sameness, while Britain to some extent, and the US to a huge extent, focus on the idea of basic freedoms centered in the notion of equality before God as created human beings, and then letting people make what they can of themselves with those basic freedoms guaranteed.  The Continent seems to prefer the idea that people are the same, or ought to remain the same – while the UK and the US emphasize the idea that people are not the same, but are entitled to the same basic freedoms and liberties.You raise a good point in terms of inheriting a long-standing family property.  That definitely lends itself more to the idea that what I have inherited is not just mine, but rather belongs to my Family.  I think there are benefits to that mindset, but certainly in the US, there isn’t enough of a historical track record of this sort of familial inheritance – at least not beyond some of the upper economic echelons.  And interestingly enough, the Continental insistence on equal distribution of assets would seem to work against this sort of inheritance idea – particularly when uncoupled from the traditional patrilineal system of inheritance through the oldest son.  It seems as though forcing an equal division of property works against a family system of inheritance, rather than for it.  And I agree – I don’t assume that I’m owed anything by my parents or anyone else.  Not that this is a particularly Biblical mindset, but it’s definitely the one that my culture imparted to me.  I think there’s a great deal to be said for inheritance laws that take into account a broader cross-section of relatives, but I think there’s danger in simply demanding a division of assets equally amongst all potential interests.  I don’t feel that the State is ultimately the best referee in these types of matters.  But tragically, Europe has largely lost the actual influence of Christianity to fill the void.

  3. Marie Says:

    Well, you could also argue, possibly, that if you have a system where the property passes to the eldest son under normal circumstances you tend to retain larger holdings. I’ll grant that I’m getting this more from Dorothy Sayers than anyone else, but I get the impression this kind of system leaves the eldest with the property and the other with an income. But if you divide all property equally, two things happen. First, land and property becomes so subdivided as to make it fairly useless, so that someone who might have held a position of some power as a landholder is now knocked out of the loop and the politicians and corporations can reign. Second, you can’t divide a house. So people tend to sell the house and split the proceeds, right? Kind of like in the U.S. when someone is land rich but currency poor, if they die and leave their property it sometimes has to be sold to pay the taxes? So instead of inheriting the family land or home, people sell those things and inherit money, which again works to the advantage of a system that prefers people have cash (and be consumers) over them having property (and be producers).But,well, that’s a little black helicopter, probably.

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