Legal Updates

Granting an asset after death may only be by a will or prenuptial agreement

April 13, 2021

A married couple who were co-owners, together with others, of a commercial building, signed a prenuptial agreement according to which in the event of the husband’s death, the wife will be entitled to any consideration received from renting the property for the rest of her life. After the husband's demise, the husband's children sought to cancel the prenuptial agreement contending that it constituted a grant that would be executed only after the grantor's demise and therefore invalid as it was not made by a will.
The Supreme Court held that the prenuptial agreement between the spouses is valid and the woman is entitled to receive the rent from the property for the rest of her life. The Israeli Inheritance Law prohibits the making of an agreement regarding a person's inheritance or a waiver thereof, or a grant intended to be made only after the demise of the grantor, outside a formal will, with the intention of allowing the testator to change the inheritance arrangements at will until the day of his demise. However, a duly made prenuptial agreement is not affected by this prohibition. Here, the prenuptial agreement was duly made, was approved by the Court twice, does not transfer the right to be among the heirs to anyone who is not a lawful heir or excludes an existing heir from his inheritance and does not even grant the woman a future gift. Thus, in fact, while the agreement has an impact on the estate, it is not an agreement for future inheritance, does not contradict the provisions of the Inheritance Law and can exist in harmony therewith. Thus, as there is no conflict between the agreement and the law, there is no reason to invalidate the prenuptial agreement and the woman shall be entitled to any compensation received from renting the property.