The loss of a close member of the family or relative is an emotionally stressful and sad experience. However, it also involves practical issues, technicalities, and arrangements that need to be made.
Probate in Cyprus is the process and legal steps taken to administer the estate of a person who has died (the deceased). Taxes and debts need to be paid, while money, assets, and other property need to be distributed.
The total of the deceased’s property, money, and possessions is called his or her estate. It is everything owned by the person who has died.
Applicable Law
In Cyprus, succession and probate matters are dealt with by the Wills and Succession Law, Cap. 195, the Administration of Estates Law, Cap. 189, and the Probate and Estates (Inland Revenue) Law of 2000.
In cases of probate made abroad, yet the estate also contains property in Cyprus, there is the Probates (Re-Sealing) Law, Cap. 192, and the Rules made under this legislation.
Who inherits?
Cyprus has adopted a “forced heirship regime”. There is no complete freedom as to whom a person will leave his or her property. Compulsorily, three-fourths of the estate must go to the lawful heirs such as spouse and children (“the statutory portion”). Only one-fourth can be disposed of freely (“the disposable portion”).
Features of a valid will
The person making the will is called the testator. The testator must be eighteen years old or older and of sound mind. There should be two witnesses who must be neither the testator nor the beneficiaries (the heirs or people mentioned in the will).
The testator and the witnesses must sign the will at the end.
If there is more than one page to the will, each page needs to be initialed by the testator.
Probate: Will or No
It is easier for probate if the deceased leaves a valid will. Then, the deceased’s estate will be distributed according to his/her wishes.
If the deceased has left a Will, the process is called probate.
If the deceased has not left a valid Will, the process is called administration.
Administration of estates
The administration of estates in Cyprus refers to the legal process where a deceased person's assets and liabilities are managed and distributed per the provisions of Cypriot law. The process can be based on the deceased's will or, in its absence, Cypriot intestacy rules. An executor of the will or a court-appointed administrator oversees the procedure, ensuring the lawful and organized handling of the estate.
The procedure of probate and administration
In Cyprus, probate and administration happen as follows.
Step One: Information and other arrangements
Upon the death of a person, the heirs or beneficiaries obtain a death and beneficiaries certificate from the Community Council President. Then, they nominate an executor who applies to the Court to be appointed (this person will be called an administrator if the deceased has left no will).
The heirs or beneficiaries will pay a fee for the process to begin.
Moreover, the deceased’s paperwork should be reviewed to be summarized into a set of financial documents.
Step Two: Apply for probate
The person nominated as executor/administrator must apply to the Court for probate: the rule is the same whether the deceased has left a Will or not.
Upon application, the Court will issue a probate certificate or, if the deceased has not left a Will, Letters of Administration.
The Certificate or Letters will enable the executor or administrator to deal with the deceased's estate, collect all the information about the estate, and carry out the deceased’s wishes. The estate vests in the executor/ administrator from the time of the deceased’s death. For legal purposes, the executor/administrator acts in the place of the deceased.
Step Three: Notify the Inland Revenue
The executor/administrator will notify the Inland Revenue that a probate/ administration procedure has started.
After opening a file, the Inland Revenue will ascertain if the deceased owed any tax. The executor/ administrator must pay any pending tax from the estate.
If the deceased was a tax resident of Cyprus, what must be done is to file (if these had not been filed by the deceased) Income Tax Declarations for at least 3 to 6 years until the date of death.
If the deceased was not a tax resident of Cyprus, the Inland Revenue will contact the tax authorities of the country where the deceased was a tax resident and obtain the so-called “certificate of fiscal residence”.
Step Four: Compile an Inventory
Another duty of the executor/administrator is to compile an official inventory of the estate of the deceased. According to the Estate Inventory Workbook, this is “a list of the estate’s assets and liabilities”, including all assets from bank accounts to personal effects and all liabilities from credit cards to any other liability.
The inventory is filed 1) in Court with an affidavit and 2) with the Inland Revenue. The affidavit must state the inventory and be sworn and signed by the executor/administrator.
Step Five: The tax release or Tax Clearance Certificate
Subsequently, the Inland Revenue issues a Tax Clearance Certificate (TCC).
The TCC allows the executor/ administrator to access the assets and dispose of them appropriately. The TCC specifies each property separately.
Step Six: Debts and estate distribution
The executor/ administrator will need to pay off any debts. This must be done as a matter of priority. If there are no sufficient funds, then assets from the estate will need to be sold.
The executor/administrator will deduct professional fees and funeral expenses from the estate.
Debts are not inherited under Cyprus law.
The remaining assets will be distributed among the beneficiaries.
Then, the beneficiaries will sign a declaration acknowledging that they have received the relevant assets and discharge the executor/administrator.
Step Seven: Final Accounts
Eventually, Final Accounts are taken to Court. The Final Accounts contain a breakdown of all the arrangements and copies of documents such as invoices, receipts, and the declarations of the beneficiaries.
Step Eight: Review and closure
The Court Registrar will review the documentation, and provided it is in order, he/she will close the probate/administration file.
Cost of probate
Costs and probate fees vary according to complexity, nature of the estate, and other factors, such as whether all the beneficiaries are located in Cyprus, whether the will is foreign or Cypriot, etc. The minimum probate cost in Cyprus is currently 3,000 euros.
How long does probate take in Cyprus?
The duration of probate in Cyprus depends on the complexity of the matters surrounding the estate. The grant of a probate order does not usually exceed 1-2 months.
Probate resealing
Resealing is the recognition of a foreign probate document by the Cyprus court. It concerns cases where a non-Cyprus resident has retained or acquired assets in Cyprus which form part of his/her estate at death.
Through this procedure, the documents are “re-sealed” in Cyprus, and an administrator is appointed by the Court to arrange for the assets to be distributed.
