Mr. Yaakov Zaken passed away at a ripe old age. He left two sons, Reuven and Shimon, a daughter, Dina, and many grandchildren and great-grandchildren. He did not leave any will so that his estate was left for intestate division.
“Our father, z”l, would want us to divide the estate according to halacha,” Shimon said to Reuven. “As the bechor, you are entitled to two-thirds of the property, and I am entitled to one-third.”
“What about Dina?” asked Reuven. “Although daughters do not inherit according to halacha, she is entitled to one-third by secular law. To divide the estate halachically, we need a disclaimer of inheritance from her.”
“She might agree,” replied Shimon, “especially because she is financially well off, and doesn’t need the inheritance. She might want a token share, though, or some compensation from us on the side, in return for signing the disclaimer.”
“If she does, we’ll have to give it to her,” replied Reuven. “We’ll pay what we have to and divide what remains according to halacha.”
“I don’t think that’s fair,” replied Shimon. “If we do that, effectively I’m paying a third of what we give to Dina. I don’t need her disclaimer, though. Regardless, I’m entitled to one-third of the estate, both according to halacha and according to secular law. Only you gain from the disclaimer, so that you can take two-thirds so that the full settlement amount with Dina should come from you!”
“It’s not quite so,” argued Reuven. “Until we divide the estate, we are like partners. If there was a debt to pay, or some of the estate were stolen, we would then divide the remaining property by two-thirds and one-third. This is no different!”
“I’d like to check this with Rabbi Dayan,” said Shimon. The two met with him and asked:
“How should the settlement amount with Dina be paid?”
“Maharsham (5:40) addressed this question about 130 years ago,” replied Rabbi Dayan.
“He explains that halachically, the bechor inherits his additional share even before division of the estate, when he intends to exercise his right, as do the other halachic heirs. Thus, if someone were to forcibly take from the estate before division, the loss would be shared proportionally, two-thirds and one-third (C.M. 278:8).
However, when settling with the sister so that she should not claim her share, presumably the full burden should be on the bechor, because she could claim only the additional share of the bechor.
Nonetheless, Maharsham notes that if the brothers were to divide the property in beis din, and afterwards the sister would demand her share in civil court, the court might award her the specific part that the younger brother already received. He would then not be halachically entitled to compensation from the bechor (see C.M. 128:2). Generally, a person would rather accept partial liability now than potentially suffer total loss.
“He compares this to travelers who were attacked, and settled with the attackers on a certain sum. Payment is divided proportional to wealth, even though the attackers might have plundered from one and not the other (C.M. 272:15).
“Thus, Maharsham concludes that the settlement amount should be split proportionately between the two brothers, two-thirds/one-third” (see Pischei Choshen, Yerusha 2:19).
“However, it appears from a careful reading of his responsum that if the sister needs to claim or disclaim her share before the estate is divided between the legal heirs, as required now by law, so that there is no potential risk that the younger brother’s part will be taken,” concluded Rabbi Dayan, “the full burden of the settlement is on the bechor, because the potential claim is only towards his additional share.”
Verdict: Maharsham rules that the bechor pays only a proportional share of the settlement amount for the sister’s disclaimer. It seems, though, that if the property cannot be divided before the disclaimer, the bechor bears the full settlement amount.
Note: IRS regulations state that “the acceptance of any consideration in return for making the disclaimer” (at least prior to the disclaimer), negates its status as a ‘qualified disclaimer’ to relieve the person making it from inheritance tax liability. However, not all countries have such a regulation. One should consult a lawyer regarding this point.