Case Background
The case heard by the Supreme Court in early June concerned an inheritance dispute. A testator who died in 2023 left behind three children and two grandchildren from a deceased daughter. Three of the four children had received substantial gifts before the current inheritance law came into force on 1 January 2021. The fourth child had not received such a gift.
Shortly before the testator died in 2023, he had a draft will drawn up. The will was never validly executed, but the draft stated that the inheritance of the other heirs should be reduced to the extent possible, as he wished to secure the life inheritance of the heir who had not previously received anything. The heir who had not previously received a gift believed that the other heirs’ inheritance should be reduced because this had been decided or assumed by their father.
The background to the question was that, under section 38 of the 1972 Inheritance Act, a testator could validly stipulate that a gift given to a heir should be reduced even after the gift had been given. Section 75 of the 2019 Inheritance Act removed the possibility of imposing a subsequent reduction condition, so that a reduction condition must be imposed at the latest at the same time as the gift is given. The question was therefore which law regulated the right to reduce gifts given before 1 January 2021. The transitional rule in Section 180(6) of the 2019 Inheritance Act stated that the reduction rules in the 2019 Act apply when “the disposition is made after the Act enters into force”.
The beneficiary named in the will argued that the transitional rule meant that the 1972 Inheritance Act governed the right to reduce the value of the gift if it had been made before 1 January 2021. The beneficiary was unsuccessful in this argument in both the district court and the court of appeal.
Hjort lawyers Pål Sverre Hernæs and Mari Klungsøyr Kristiansen assisted the heir in the appeal proceedings before the Supreme Court, where the client prevailed.
The judgment
In its recent ruling, the Supreme Court concluded that the transitional provisions in section 180(6) of the Inheritance Act must be understood to mean that the reduction rules in the old Inheritance Act regulate the right to reduce gifts given before 1 January 2021. The Supreme Court thus clarifies that it is only when the gift is given after the Inheritance Act 2019 came into force that the reduction rules in the Inheritance Act 2019 apply.
The Court of Appeal’s judgment was therefore overturned with regard to the question of reduction. The client was also awarded legal costs.
Assessments in the ruling
The Supreme Court found that the natural understanding of the word “disposition” in the transitional provision in the current inheritance law refers to the gift itself and not the subsequent provision on reduction, and found that this interpretation was supported by the context of the law. The Supreme Court then reviewed preparatory works, theory and practical considerations, but found that none of these sources of law provided grounds for deviating from the natural understanding of the wording of the Act.
The ruling thus provides important clarification on how the transitional rules of inheritance law should be understood in practice and emphasises the importance of being aware of the time at which a gift is given when assessing the testator’s right to set a subsequent condition for reduction.
