Guide to Inheritance Order and Real Property

What is an Inheritance Order and Real Estate Property?

An inheritance order is a court judgment that confirms the rights of heirs to real estate property (apartment, house, land) following the death of the property owner. It is a fundamental legal document that serves as the basis for registering the property in the names of the heirs in the Tabu (the state registry of property).

In Israel, every transfer of rights in real estate property must be recorded in the Tabu, which is maintained by the land registry office. When a deceased person leaves behind real estate property, the property cannot be legally transferred to the heirs at all until an inheritance order is issued. This is a strict legal requirement that cannot be bypassed even with the consent of all heirs.

An inheritance order serves as the link between death and the new registration in the Tabu. Without it, the property remains in the name of the deceased in the state registry system, creating serious legal, mortgage, and insurance problems. This guide will explain to you all the necessary steps, procedures, costs, and your legal protections as heirs.

Why is an Inheritance Order Essential for Real Estate Property?

Unlike movable assets (chattels, bank account funds), real estate property is subject to strict legal oversight. The Tabu is a public registry that requires reliable legal proof for any change in ownership. Without an inheritance order:

• The property cannot be sold — no buyer will agree to purchase an apartment registered in the name of a deceased person.
• The property cannot be rented under an official contract — mortgages, insurance policies, and legal contracts require living, legally valid owners.
• The property cannot be used as collateral — banks will not accept a mortgage on property not registered in the name of a legal owner.
• Claims for damages cannot be filed — if there is damage to the property (accident, environmental damage), heirs cannot file a claim in their own names.
• Tax and inheritance liabilities accumulate — the Tax Authority and courts may impose penalties for unlawful transfer of assets.

Therefore, obtaining an inheritance order as soon as possible is not an option — it is a legal obligation.

The Process of Obtaining an Inheritance Order — Step by Step

The process of obtaining an inheritance order goes through a family court (or district court in complex cases). Here are the main steps:

Step 1: Document Collection

Before filing a petition with the court, you must obtain:

• Death certificate of the deceased (from the population registry).
• Identity document of each heir.
• An inheritance order or attachment order if one exists (from the last update).
• A family document proving family relationship (marriage, birth, etc.).
• A list of the deceased's assets, including details of the real estate property (Tabu number, address, area, etc.).
• A copy of the will (if one exists) or a written agreement from all heirs (if there is no will).

At this stage, it is very important to work with a lawyer. Errors in documents or missing evidence can delay the process by months or years.

Step 2: Filing a Petition with the Court

An inheritance order petition is filed with the family court in the jurisdiction of the deceased's place of residence at the time of death. The petition will include:

• A full description of the real estate property (address, Tabu number, area, estimated value).
• A list of all heirs and their degree of relationship (spouse, children, parents, etc.).
• A declaration regarding the absence of unsettled debts of the deceased (or a list of them).
• Confirmation from the Tax Authority that there are no unpaid tax debts.

The court will review the petition and issue an inheritance order if everything is in order. Usually, this process takes between 2 and 6 months, depending on the court's workload and the complexity of the case.

Step 3: Registration in the Tabu

After receiving the inheritance order, you must submit it to the land registry office in the city where the property is located. The registry office will verify the inheritance order, confirm that there are no attachments or debts, and register the property in the names of the heirs in the Tabu. At this stage, each heir will become the legal owner of their share in the property.

Registration in the Tabu is a critical step — this is where the legal right becomes actual ownership rights. Without registration in the Tabu, even though there is an inheritance order, the property is still not registered in your names.

Costs and Expenses for an Inheritance Order

Obtaining an inheritance order involves several types of costs:

• Court fees: Usually ranging from a few hundred to thousands of shekels, depending on the property's value (check with your local court registry).
• Cost of obtaining documents: Death certificates, inheritance orders, tax clearances, etc. — usually up to a few hundred shekels.
• Attorney fees: An attorney experienced in inheritance and real estate law will typically charge a fee of between 2% and 5% of the property's value, or a fixed fee ranging from a few thousand shekels (each firm sets its own rates).
• Valuation costs: If a property appraiser's evaluation is required for tax or inheritance purposes, this will add further expenses (usually a few hundred shekels).
• Inheritance tax: In Israel, inheritance tax on real estate property is calculated according to a fixed rate (check with the Tax Authority for the exact rate applicable in your inheritance year).

In total, for most standard cases, the cost of obtaining an inheritance order and registering in the Tabu ranges between 5,000 and 15,000 shekels, depending on the property's value and case complexity.

Registration in the Name of Heirs — Rights and Obligations

After obtaining an inheritance order, each heir becomes the legal owner of their share in the property. However, it is important to understand their rights and obligations as a new owner.

Rights of Heirs in Real Estate

• Full Ownership Right: Each heir is the legal owner of their share in the property and may sell, rent, transfer, or use the property as they wish (subject to applicable laws and spousal consent, if applicable).
• Right to Mortgage: After registration in the land registry, an heir may use the property as collateral for a bank loan.
• Right to Lease: An heir may lease the property (or their share in it) to a third party, provided they comply with rental laws.
• Right to File Claims: If the property is damaged (accident, fire, flood, etc.), an heir may file an insurance claim or a tort claim in their own name.
• Right to Divide with Other Heirs: If there is more than one heir, they may agree to divide the property (for example, each heir takes a separate apartment) or sell and divide the proceeds.

Obligations of Heirs

• Payment of Taxes: An heir must pay annual property tax (municipal tax), capital gains tax on profit at the time of sale, and other taxes as required by law.
• Payment of Deceased's Debts: If the deceased had debts on the property (for example, a mortgage), heirs must settle them (or pay them from the estate assets).
• Property Maintenance: Heirs are responsible for maintaining the property and paying management fees (if it is an apartment in a building).
• Tax Return Declarations: Heirs must file tax returns in accordance with the law, including a declaration regarding the inheritance.

Complex Cases — What to Do When Complications Arise?

Not every inheritance and real estate case is straightforward. Here are several complex scenarios that may arise:

Case 1: Disputed Will

If heirs dispute the validity of a will (for example, claiming the deceased lacked legal capacity or the will was written under duress), the court will investigate the claims. In this scenario, the inheritance order may be delayed for months or years until the court decides. It is highly recommended to work with an experienced inheritance law attorney.

Case 2: Debts on the Property

If the deceased had debts on the property (mortgage, guarantees, legal liens), heirs must settle them before registration in the land registry. Typically, debts are paid from estate assets (funds, other assets). If there are insufficient funds, heirs may be required to use their share of the real estate to settle debts.

Case 3: Heirs Abroad or Unavailable

If there are heirs living abroad or who are not available, the process is delayed. The court may require proof of attempts to contact these heirs. In such cases, an attorney may conduct proceedings on their behalf or obtain legal authorization for an expedited process.

Case 4: Co-Owned Property (Two or More Owners)

If the deceased held the property with a spouse in joint ownership, the rights of the surviving spouse are stronger. Typically, the surviving spouse automatically inherits the deceased's share in the property (depending on the law and type of marriage). However, an inheritance order is still required to update the land registry.

Case 5: Dispute Among Heirs Over Property Division

If heirs disagree on how to divide the property (for example, one wants to sell and one wants to retain it), this may lead to litigation. In such cases, a court may order a judicial sale or other legal division. An attorney can represent your interests in this process.

Real Estate Inheritance — Tax and Financial Considerations

When inheriting real estate, it is important to understand the financial implications:

• Inheritance Tax: In Israel, heirs pay inheritance tax on the value of the property. The rate varies depending on the degree of kinship (spouse, children, parents, etc.). Check with the tax authority for the exact rate.
• Capital Gains Tax: If an heir sells the property in the future, they pay capital gains tax on the profit (the difference between the original purchase price and the sale price). However, in inheritance, the tax basis is updated to the property's value on the date of death, which may reduce capital gains tax.
• Municipal Tax: An heir pays annual municipal tax on the property, like any owner.
• Building Management Fees: If the property is an apartment in a building, the heir pays monthly management fees.

Due to tax complexities, it is highly recommended to consult with a tax advisor or attorney with expertise in inheritance taxation.

Comparison: Inheritance Order vs. Other Legal Arrangements

When dealing with inheritance, it is important to understand the differences between an inheritance order and other legal documents that may be relevant:

As can be seen, the inheritance order is the most critical document. Without an inheritance order, it is impossible to register the property in the names of the heirs in the land registry, regardless of the will or other agreements.

Why is it important to work with an attorney on inheritance orders and real property matters?

The process of obtaining an inheritance order and registering it in the Land Registry is a complex legal process that requires in-depth knowledge of inheritance law, real property law, and court procedures. Minor errors in document submission or evidence can lead to delays of months or even rejection of the application.

An attorney experienced in this matter can:

• Manage the entire process on your behalf — from document collection to Land Registry registration.
• Avoid costly mistakes — by reviewing every document and ensuring accurate application filing.
• Expedite the process — through good working relationships with courts and registration offices.
• Handle disputes between heirs — if there are disagreements, an attorney can represent your interests in legal proceedings or negotiations.
• Guide you on specific matters — such as taxes, debts, and the rights of a surviving spouse.

Mandelbaum, Gor, Witzman-Gor & Co. — Legal representation in inheritance and real property matters

Our firm has over 18 years of experience in inheritance law, real property law, and real estate. We specialize in obtaining inheritance orders, Land Registry registration, resolving disputes between heirs, and providing legal advice on inheritance and real property matters.

Our Ramat Gan office handles cases from all over the country, as well as cases involving heirs abroad. We offer:

• Free initial consultation — to assess your case and provide you with a clear picture of the process and costs.
• Full court representation — from filing the application through obtaining the final inheritance order.
• Land Registry registration management — to ensure the property is registered in your name as quickly as possible.
• Legal advice on taxes and debts — to ensure you pay only what is required.

We believe in personalized and dedicated service to each client. We understand that inheritance is a difficult time, and we are here to guide you through every step of the process.