The period following the passing of a loved one is not simple, and sometimes it becomes even more difficult due to disagreements over the deceased’s estate and inheritance. To prevent such situations and to ensure the estate is managed in an orderly manner, it is important to be familiar with the letter of the law and to receive professional guidance from an Estate Administration Attorney.

Below, you can find out everything you need to know about estate administration and what the law in Israel states regarding the matter:

When is an Estate Administrator required?

Estate administration is especially important in cases where there is no person responsible for managing assets and paying debts left behind by the deceased. The appointment of an administrator for estate matters is particularly recommended in the following situations:

• There are disagreements between the heirs regarding the distribution of the estate.
• There are many heirs or not all heirs have been located.
• The estate includes numerous and complex assets.
• The deceased has large debts towards creditors.
• In any other case requiring court supervision over the distribution of the estate.

How is an estate administrator appointed?

The law defines several ways to appoint an estate administrator, both by consent and in its absence:

Methods of appointment by consent or in advance

• The deceased named an estate administrator on their behalf in their will.
• All the heirs in the will agreed upon the appointment of a specific person to the role of estate administrator.

Appointment in the Absence of Consent

In cases where the deceased did not appoint an estate administrator or the heirs fail to reach an agreement, one can approach one of the following authorities to appoint an administrator:

• Apply to the Registrar of Inheritance Matters: Possible in cases where the deceased did not leave a will at all and all the heirs agree on the estate administrator.
• Apply to the Rabbinical Court or the Family Court: Possible in cases where the deceased did not leave a will and the heirs do not unanimously agree on the estate administrator.

Threshold Requirements for the Estate Administrator

After applying to the Registrar of Inheritance Matters, the Rabbinical Courts, or the Family Court, an estate administrator will be appointed to handle the deceased’s estate. The estate administrator must be a resident of Israel, as they are appointed by the courts of law in Israel and must operate under the authorities established by Israeli law. Therefore, both a temporary or permanent estate administrator must be residents of Israel—even if the testator appointed a foreign estate administrator in the will.

What is the role of the Estate Administrator?

The general role of an Estate Administrator is to determine the distribution of the deceased’s estate, and they have several powers granted to them by law:

• Managing legal proceedings on behalf of the heirs and in the name of the estate.
• Submitting an annual inventory statement (parata) to the Administrator General detailing the estate assets.
• Submitting annual reports to the Administrator General detailing the actions taken.
• Receiving instructions from the court regarding the distribution of the estate.
• Convening/Consolidating Estate Assets (Estate Consolidation): The Estate Administrator will require that all estate assets be transferred into their possession so they can pay debts, file claims, and manage the property in a way that maximizes the estate’s value for the heirs.
  
  

The remuneration of the estate administrator is determined by the court, usually not exceeding 3% of the value of the estate. In exceptional cases requiring special effort, the court may determine their fee to be 4%.

What can be done in a dispute between heirs?

In many cases, a temporary estate administrator is appointed for a period of six months (unless otherwise determined)—until the grant of a probate order or an inheritance order. A temporary administrator is appointed in cases where the estate may suffer damage (such as debt collection), when the assets require special handling, when there is a dispute between the heirs, or when one of the heirs is a minor or legally incompetent.

When there is a sharp dispute between the heirs, a permanent estate administrator will be appointed until the entire estate is distributed, with the appointment lasting about two years (or as determined by a judicial authority).

• A permanent estate administrator will also be appointed in the case that:
• There is a need to ensure the interests of wards/minors who are heirs.
• There is difficulty in distributing the estate, such as in determining the value of the deceased’s companies and corporations.
  
  
• The will is complex or the deceased instructed the establishment of a public endowment (Hekdesh Tziburi).
  
  

Measures for Preserving the Estate (Section 77 of the Law)

To preserve the estate until there is a regulated decision regarding its distribution, Section 77 of the Inheritance Law was established. This section stipulates that:

“At any time after the death of the deceased and as long as an estate administrator has not been appointed, the court may, upon the request of an interested party or on its own initiative, take measures deemed appropriate for the preservation of the estate or the preservation of rights in the estate, including a temporary suspension of actions regarding the estate’s assets, issuing an order for the sale of perishable assets in the estate, and the appointment of a temporary estate administrator.”

Managing the process requires deep understanding not only of the Inheritance Law, but also of supplementary issues such as drafting wills and handling objections.

What to do when debts exceed the estate’s assets?

There are cases where the debts left behind by a deceased person exceed the total value of their assets.In these cases, the estate administrator is entitled to file a petition with the court to manage the estate under bankruptcy proceedings, pursuant to Section 189 of the Bankruptcy Ordinance.
After the petition is filed (which can also be filed without an estate administrator), a receiver (trustee) will handle the debtor’s assets until their debts are covered.

To address the matter as quickly as possible, it is important to file a petition for a probate order or an inheritance order so that the debtor’s property can be sold and the estate’s contents can be liquidated.

And what about an agricultural farm?

In the event that a deceased person leaves behind an agricultural farm (Moshav/Tractor Farm) whose division may impair its viability, the farm shall be transferred to the heir who is able and willing to maintain it. The heir has the ability to compensate the remaining heirs (if the value of the agricultural farm exceeds what is due to them in the estate).

Even in cases involving an agricultural farm (Moshav/Tractor Farm), there is sometimes disagreement over which heir is capable and able to maintain the farm. In such cases, the court will decide the fate of the farm and the distribution of its value among the heirs.

In these cases, not only blood relation is the deciding factor; if there is an heir who is an agricultural worker who invested their own capital in the farm and did not receive compensation, this will be taken into account. Additionally, if the deceased’s spouse is willing and able to maintain the farm – they will be given priority.

Need legal consultation for estate administration?

Estate distribution, even when there is a clear will, is not always simple. The appointment of an estate administrator is an effective solution in many cases, and in any event – it is important to act quickly. Sh. Vaknin Law Office is at your service.