FURTHER EXPLANATION · 2 MIN READ
What does a survivorship agreement do?
A survivorship agreement is a contract concerning specifically identified assets. In this advance ruling, each spouse retained their own investment portfolio. At the first death, the surviving spouse received an option to acquire the agreed portfolio of the deceased spouse. The assets therefore did not transfer automatically and the contract did not cover the entire estate.
VLABEL examined in advance whether the proposed replacement of older agreements would trigger inheritance or gift tax. For this specific case, the answer was no. That answer is not a general exemption. A different deed, different assets or different personal circumstances may lead to a different assessment.
Which conditions mattered?
Both spouses contributed their own assets of equivalent value. Their life expectancy was comparable when the contract was concluded and, according to the application, their health was similar. VLABEL therefore considered it a balanced aleatory contract: it was not known in advance who would ultimately benefit.
The deed precisely identified the portfolios concerned. It ran for five years, renewed automatically and ended when the relationship ended. It also provided that the surviving spouse's choice took effect from the first death. Without that effect from death, a choice exercised later could, according to the ruling, be subject to inheritance tax.
One general possibility
One general possibility is for two partners each to identify one of their own investment portfolios and later let the survivor decide whether to take over the other's portfolio. This example does not create an automatic right to a tax-free transfer. Value, health, age, duration, termination and the wording of the option must all fit together.
The ruling only addresses the stated Flemish inheritance and gift taxes. It does not confirm that every contract is valid under civil law and it does not assess other taxes. Merely putting the words survivorship agreement or aleatory contract into a document is therefore not enough.
What should you prepare?
Prepare existing survivorship agreements, your marriage contract or cohabitation agreement and recent statements for the relevant accounts and securities portfolios. Also note who is the legal owner, which assets you want to include, how long the agreement should run and when it should end.
Notariaat Wellens can compare the old and new arrangement and explain the consequences in plain language. This shows you in advance which conditions must appear in your deed, which information is still missing and which tax result remains uncertain without an assessment of your own facts.