Navigating Israeli inheritance law in the wake of October 7 - explainer

In the early hours of October 25, 2023, an urgent email from the Israel Bar Association landed in the inbox of the writers of this column. Both of us serve on the Israel Bar National Committee for Inheritance Law, and from time to time we, as a body and as individuals, are requested to give feedback to proposals of law reform relating to inheritance matters.

Reform of any law is by definition a slow and carefully thought-out process, and usually members of the National Committee are given several weeks, if not months, to consider their reasoned responses to the proposals by the Knesset and the Ministry of Justice.

This time, we were clearly notified, we had four hours! to respond if we had any comments at all on proposed emergency temporary provisions required to amend the Inheritance Law. The proposed amendments were intended to come into force almost immediately.

None of the busy lawyers on the committee complained about the brevity of time or the alacrity with which they had to respond. The horrific events of October 7 were just behind us, the body count not yet clear, the dead unburied, and all around us our sons and daughters and other relatives rushing off to the front line.

The pain was too keen yet to be understood, but as lawyers we knew that life, despite everything else, goes on. Notwithstanding or even because of the extraordinary set of circumstance where, in some cases, members of entire families were wiped on that morning of Simchat Torah, the proposed amendments were important as everyone in the legal fraternity fully understood.

Inheritance law in the wake of the Hamas massacre

Did the amendments we approved assist the shattered families from around Gaza? Did these emergency measures help relatives of those hundreds of youngsters reveling in the Supernova music festival?

With regard to most of the temporary emergency measures, the answer is a resounding yes. However, there are some procedures about which we expressed reservations for what we feel are excellent reasons, which we explain below. At least one amendment seems to us to be a threat to the fair and just administration of justice when it came to the inheritance of the hundreds who were murdered that morning; we recommend that these be modified in the days and months ahead.

To understand how the horrific events were addressed by the amendments, it is worth looking at the present state of the Inheritance Act, 1965.

Firstly, right in the opening words of the act is the guiding principle:

“Inheritance devolves to the heirs of a person immediately upon that person’s death.”

(We have emphasized some words throughout this column for the sake of clarity. The emphasis is not in the original law.)

The question is: Who are the heirs when so many members of one family die together?

For example, what would happen if the head of a family-owned company who had controlling shares had been murdered in the Hamas wave of violence?

The question with immediate effect will arise as to who now controlled the company. This is not an idle question or an academic one. Urgent matters often have to be decided on a weekly basis in the running of a company. Sometimes the difficulty of reaching decisions or the impossibility thereof can bring a company to ruin.

But who now had the authority? In the case of so many members of families dying at the same time, who was now the rightful legal owner of the shares?

It is this kind of legal situation where profound grief of shattered families meets up with the cool head – some would say coldness – of the law.

One of the problems is that in Inheritance Law, to answer the question “Who inherits”? one has to establish the succession of deaths. Simply put: Establishing the order of death is crucial for determining inheritance.

But what do you do if nobody has any idea who died first? Several families were completely destroyed during the Hamas attacks, and no order of death could possibly be established.

Thus no rightful heir could be defined.

This question of “Who died first?” arises whenever there is a mass tragedy anywhere in the world. Historically, Israel is not alone in this legal and emotional turmoil.

Airplane crashes, the atrocities of 9/11, even going back to the sinking of the Titanic 110 years ago. Who died first can establish the ownership of fortunes and estates.

When two or more individuals perish in close proximity [of time], this question of who predeceased the other arises. This kind of simultaneous death is sometimes referred to as commorientes [from the Latin “com-” meaning “together,” and “morientes” meaning “dying”].

In our own legal system, this kind of event is described as שניים שמתו כאחד.

The legal conundrum of shnayim she’metu ka’echad  – “two who perished as one” – has thrust Israeli Inheritance Law over the years into a stark and sobering spotlight. In this crucible of loss, where emotions run raw and legal precedents falter, we grapple with the delicate balance between honoring legacies and navigating the labyrinthine pathways of simultaneous death.

However, in these cases the laws of inheritance can reach very surprising and sometimes seemingly unacceptable and even outrageous results.

An earlier case in Israel occurred as a result of the terror attack on the Park Hotel in Netanya 22 years ago. An elderly married couple who were guests at the hotel at the Passover Seder were killed in that attack.

The starkness of the decision that the court has to reach is illustrated dramatically in this case. And one can understand the anger that it provoked, even though from a legal point of view it was perfectly fine. A lot of the anger was misplaced and stemmed from the public’s lack of understanding of the law and the circumstances.

In the above case, of course, no one could prove the order in which this couple tragically died. And this was to make an enormous difference to the distribution of the estate. The late wife had no apparent heirs. The husband did have heirs, albeit very distant relatives, but still eligible under the rules of the Inheritance Law 1965. The wife’s estate was substantial, so if she had died first, her husband lived to inherit her. In such a case, as he died shortly afterwards, his (albeit distant) heirs would have inherited him.

But if the court determined that had she survived after her husband’s death for however short a period – it could be minutes or less – she would have been the one to inherit him. Both their estates therefore would be rolled into one and inherited by the wife. But she in turn had no heirs; once she died, all her fortune in the absence of any heirs would go to whom? She had not made a will by which she would have had the right to bequeath her estate to a person or body outside the family circle.

In the absence of a will, only relatives inherit under the law. With one exception.

For another important rule under the above Inheritance Act (section 17) states: “In the absence of any heir…. the State will inherit.”

For the distant heirs of the husband, this of course would be perhaps a critical court decision, one that will decide whether they are made wealthier by the estate of their distant relative – the deceased husband who had inherited his wife – or whether they would get nothing if the court determined that the husband died first. In such a case, they themselves have no claim because they were in no way in line for the wife’s estate, since they were not related to her.

In fact, the judge did decide, utilizing various presumptions in the law, that the wife inherited her husband and that she had died heirless. The state thus inherited under Section 17.

One important lesson to us all: Make a will!

If there had been a will giving expression to the last wishes of the wife, then it wouldn’t have mattered whether there were relatives to inherit or not. Whatever she would have stated in the will would overridden any other consideration. The freedom to make a will in this country is almost absolute, and thus no doubt somewhere a worthy person or organization would have inherited.

However, it should be emphasized that the State of Israel inheriting in this way does not enable the government to dispose of the estate in any way that it so desires. There is a limited list in the law of worthy aims that the state must apply to these heirless inheritances, such as making provisions for education, health, and welfare. Interestingly, the law also provides that although this now become public money, the state is permitted to make payments to any person who was dependent on the inheritor at the time of his/her death. This includes people within the family that may be too distant to inherit under the law. This allows the state to behave in a beneficent manner in these extraordinarily painful and singular cases.

But how did the court decide that the wife inherited the husband? The judge, Shaul Shochat, one of the most eminent academician and jurists in the matter of inheritance in this country, did not come to his conclusion easily. He pointed out that Inheritance Law has a variety of presumptions in cases of simultaneous deaths. These presumptions are based on the analysis of how close each of the possible heirs is to the deceased. This is not the forum to discuss the complex details of these presumptions, but in a nutshell the law differentiates between what it calls a definite heir and a doubtful heir.

A definite heir in these cases of simultaneous deaths is an heir who would have inherited, no matter which of two or more people died first. For example, in the case of two parents dying simultaneously, a surviving son is a definite heir. He is bound to inherit, no matter which of the parents died first. A doubtful heir is someone who will inherit only if the people who died did so in a particular order, putting him in line for the estate. This was the case with the husband’s distant relatives in the Park Hotel case. Only if the wife had died first would they be eligible for the estate. That makes them doubtful heirs, and doubtful heirs take their place lower in the ladder of succession.

This might sound very complex – and it is. However, it is the just way to reach the conclusion required by law and by kinship. The closer you are to the deceased, the more likely the desire of such a person to make you his heir.

Most other traditional systems such as in the United States or Great Britain simplify the commorientes situation by basically taking a heavy legal axe to the Gordian knot. They invent a presumption.

What is that presumption?

If two or more people die simultaneously, it’s presumed that they died in the order of their ages, with the elder dying first. This presumption can be rebutted by clear and convincing evidence, such as medical records or eyewitness testimony.

This may sound alluringly simple, but in actual fact it is a total fiction; whereas Israeli law actually give us justice in a real sense. Complicated as this determination may be, it establishes the real closeness of relationships between the deceased and the putative heirs.

Unrelated to the shnayim shemetu ka’echad issues, even before the events of October 7, many of us serving on the National Inheritance Committee were of the opinion that however good the intentions of the Inheritance Act are, one should remember that it was enacted in 1965. That’s 60 years ago!

Many of us believe that the law is hopelessly outdated and is not in touch with the mores of the times and does not meet the needs of the generation. Change is not necessarily a bad thing as we keep pointing out. As far back as Talmudic times, there was a ringing approval of necessary change in the law in accordance with the needs of the moment. “Every generation expounds the law differently,” Tractate Sanhedrin (38B) approvingly states. Or in the original: דור דור ודורשיו.

Even the most conservative among us realize that the law must adapt to the needs of the times, and this is no more true than after the terrible events of October 7 when this need became glaring and burning.

We also believe that some of the emergency changes in the law, temporary as they are for the moment, will lead to more radical change in the venerable Inheritance Law itself, and this is a definitely a positive:

One of the stumbling blocks that the present Inheritance Law represents to the people who suffered the October 7 massacres is the question of renunciation.

Renunciation essentially means that a named heir in a will or any heir under law can refuse to accept the inheritance and renounces his right in favor of another person.

But why would a legitimate heir waive his right to an inheritance?

The most common circumstance where renunciation comes into play is upon the death of a spouse. The law stipulates that where there is no will, the estate of the deceased spouse goes to his children and the surviving spouse in equal shares. Most couples own a residential property together. In the absence of a will, the surviving spouse can find himself or herself in the invidious position of suddenly being a partner in their home of decades with their children!

Anyone who has read Shakespeare’s King Lear will know that sharing the ownership of your sole residential property with your children is a very bad idea. Among other things, this gives the children, who are now part owners, the ability to “pull the plug” on the surviving spouse. They, as part owners, can demand that the property be sold forthwith. If it goes to court, the children will inevitably win the legal court battle.

As people live longer, the generational gap grows, and suddenly a grandson or a great-grandson asks the question “Why does Grandma need such a big house? I have immediate needs that mandates that we should sell it.” That is definitely allowable by law but can create heartbreaking situations where the surviving spouse has not only lost his/her closest person but is now asked to leave the family home. One way to avoid this, of course, is to make a will and doing it in a way that will ensure that future generations get the share of the estate when the time comes but protects the surviving spouse until the end of his or her life at the very least.

In Israel, the sale of their share of the house by the children from under the feet of the surviving spouse is still fairly rare, but it does happen. But in most cases, the children who inherit under the law will renounce their rights in favor of the surviving spouse. Thus, the ability to renounce an inheritance is an important provision of the law which allows for the protection of families and the maintenance of good relations between elderly surviving spouses and their children and grandchildren. The problem is that the clause in the law permitting renunciation is limited. You can only renounce your right to an estate in favor of a very limited list of people. You can’t renounce your right to just anyone.

So in accordance with the present law, you can renounce an estate in favor of the spouse of the deceased, a child, or a sibling of the deceased. You cannot renounce in favor of anyone else.

The cataclysmic events of October 7 demanded an amendment to the law. And an emergency change was effected as part of the temporary reform package.

The proposed temporary change in the law now enables family members to renounce the estate in favor of a parent or a grandchild of the deceased. These were previously excluded from the list.

The reason this kind of change is important is illustrated by a tragic event took place on October 7:

A family lived in Kfar Aza, which included a grandfather, a grandmother, a son, his spouse, and their three children. The grandfather and the parents of the children were murdered, so the three children are now orphans.

The grandmother, who survived, is now the legal heir of the grandfather and wants to renounce her right to his estate in favor of her orphaned grandchildren. This was not possible before the emergency amendments. A person could not renounce his/her share in the inheritance to a grandson. The emergency regulations amended this to now allow this sort of renunciation, The writers of this column recommend that this should become a permanent change to the law.

Another temporary amendment to the law is very far-reaching and will be much discussed in the future. This amendment gives the courts and the Inheritance Registrar the discretion to distribute an estate not in accordance with the provisions of the law. This is a revolutionary amendment which goes against everything that we who practice Inheritance Law deemed sacred – i.e., fulfilling the will of the testator or the provisions of the law.

It is true that the amendment adds a proviso that the judiciary and the registrar can make use of this new power “only if it is found that there are reasons of justice and fairness” to do so. But this is still unprecedented. Giving the judiciary the right to interfere in the freedom of a testator to make a will and leaving it to the personal views of others to make arbitrary decisions on what is just and what is fair is a very dangerous precedent. The committee will no doubt ensure that this very temporary amendment will be struck once the emergency is over. This is particularly true because this huge power is now given not only to judges but also to registrars who are not judges and do not have the wide experience of family court judges.

All the temporary emergency amendments to the law are time limited and automatically expire 18 months from the date of October 7. They can be extended by one year. After that, new legislative amendments will be required. ■

Haim Katz and Sam Katz are senior partners in a law firm based in Tel Aviv and Jerusalem. Their new book in English, The Complete Guide to Wills and Inheritance in Israel, is published by Israel Law Publications. Specializing in inheritance disputes and family law, they both serve on the Israel Bar Association National Committee for Inheritance Law, which advises the government on law reform relating to inheritance. office@drkatzlaw.com