How to divide objects belonging to the estate – such as real estate property?
Facts
C died on January 29, 2006, leaving two daughters as legal heiresses. An inheritance division case has been pending since 2007. Two 2.5 room apartments – one in the Canton of Grisons, one in the canton of Ticino – are i.a. part of the estate.
On January 17, 2018, the district court ordered the obtaining of valuation reports to appraise the properties. Nevertheless, one of the sisters prevented the appraiser from accessing the property.
By decision of May 16, 2019, the sisters were granted a deadline for the private sale of the two apartments. Otherwise, a public auction should be held.
The court of appeal dismissed the appeal on October 27, 2021.
On November 29, 2021, one of the sisters appealed to the Federal Supreme Court, also submitting a request for legal aid.
The highest court has been called upon for the twelve (12th) time to clarify individual issues.
Issue
The order of public auction of two properties is in dispute.
Considerations of the Swiss Federal Tribunal
The statutory heirs are free to agree on the method of division where not otherwise stated (Art. 607 par. 2 Swiss Civil Code). The testator may enjoin the division of the estate property on its heirs (cf. Art. 608 par. 1 CC).
Should the heirs disagree and the testator refrain from giving instructions on the division of the estate property, the statutory division rules apply. In principle, all heirs have an equal right to the estate property (cf. Art. 610 par. 1 CC). A division is made in kind. Lots are formed, either by the heirs or by the competent authority. The lots shall be distributed among the heirs by agreement or by drawing lots (cf. Art. 611 CC).
In case of loss of value, the object belonging to the estate shall be allocated in its entirety to one heir. Are the heirs unable to agree on the division or allocation of an object, it shall be sold, and the proceeds divided. The object shall be put up to auction at the request of an heir. If the heirs cannot agree, the competent authority shall decide at its discretion whether there is a disposition by public auction or only an internal vendue among the heirs as bidders (cf. Art. 612 CC).
All circumstances of the individual case shall be considered, where necessary also non-financial interests (e.g., keeping the property in the family out of reverence).
However, a public auction was mandatory if none of the heiresses wanted to take over the property or if only one of them did not have the necessary means to acquire it (cf. decision of the Federal Supreme Court of Switzerland 5A_984/2021 of 17 May 2022, consideration 3.2).
Yet, one of the sisters filed an application for legal aid. Thus, third-party financing had to be proven already before the lower court. However, the claimant failed to provide evidence of private credit and loans by producing declarations of assurance. An auction procedure is not intended to allow a person who is not able and willing to take over a property to bid at the auction, only to contemplate boosting the price (cf. decision of the Federal Supreme Court 5A_984/2021 of May 17, 2022, consideration 5.2).
Outcome
The order of public auction was admissable. The appeal was dismissed in its entirety. The request for the gratuitous administration of justice was rejected due to pointless form of order sought.
Please note:
A private, consensual division of the estate is to be preferred to a judicial division of the estate that takes years. Testators may issue division regulations to counteract a silvering or destruction of estate assets. Thus, preserve family peace, take precautions, make a holographic will after prior consultation.