Donation, a form of gratuitous transfer made by a deceased person to one or more of their heirs during their lifetime, and sale, both give rise to different legal claims in the event of the deceased’s death. Therefore, this article will focus on the consequences of a donation or sale based on the legal basis for transferring a property to one or more of their heirs during their lifetime.
If the deceased’s property is listed as a sale on the title deed, the possibility of collusion by the deceased may arise.
The Grand Assembly of the Supreme Court of Appeals, in its decision numbered 1/2, dated April 1, 1974, explains the issue of inheritor collusion as follows:
“If a person declares his will before the land registry officer to sell immovable property registered in the land registry that he actually intends to donate, with the intention of depriving his heir of his right to inherit, all heirs whose inheritance rights have been violated, whether they have a reserved share or not, may file a lawsuit claiming that the apparent sale contract is collusive under Article 18 of the Code of Obligations and that the secret donation contract lacks the formal requirement. This right of action will not affect the rights granted by Articles 507 and 603 of the Code of Obligations, which are valid contracts…”[1]
In the case of fictitious transfers of registered real estate, that is, when the property is actually donated for the purpose of defrauding heirs, but the official contract drawn up at the land registry is presented as a sale or lifelong care agreement, the apparent official contract will be deemed invalid because it does not comply with the parties’ will (fictitious), while a secret donation contract will be deemed invalid because it does not meet the formal requirements. More precisely, due to improper registration, heirs can request the correction of the land registry record and have the title deed cancelled. Furthermore, because a lawsuit to correct the land registry is filed based on the heir’s right in rem, pursuant to the rule that “rights in rem are not subject to the statute of limitations or statute of limitations,” it can be filed “at any time” after the decedent’s death. Therefore, it is possible to have the title deed cancelled without any statute of limitations or statute of limitations being imposed on the unlawful act.[2]
A donation, as one of the testator’s gratuitous dispositions, is subject to reduction. However, for a donation to be reduced, all testamentary dispositions must first be reduced, and the reserved portion violation must not be remedied. According to Article 570 of the Turkish Civil Code, subsequent inter-life dispositions that can be reduced will be subject to reduction, starting with the one made closest to the date of death (TCC, Article 570). Therefore, if the testator has testamentary dispositions, a donation made during the testator’s lifetime will be exempt from reduction.[3]
In accordance with the provisions of the order of reduction, the following unconsidered contributions, which may be reduced if necessary and which will be added to the net estate in value to calculate the estate for reduction, are listed in Article 565 of the Turkish Civil Code:
1. Unconsidered contributions made by the decedent to a legal heir who has lost their right to inheritance as a deduction for their share of the inheritance.
2. Contributions made by the decedent to descendants by transferring assets or relieving debt, or unusual dowry and foundation capital, provided that it is anticipated that they will not be offset during the division of the inheritance.
3. Donations made by the decedent reserving the right to freely revoke the inheritance.
4. Donations made by the decedent within one year before their death, other than gifts customarily given.
5. Donations made by the decedent with the express purpose of circumventing the reserved share rules.
Furthermore, pursuant to Article 509 of the Turkish Civil Code, if the deceased donates his or her right to claim under his or her life insurance policy to a third party while alive, this donation will also be considered a donation subject to reduction. It should be noted that the reduction lawsuit, which can only be filed by heirs with reserved shares (children, spouse, parents), must be filed within one year of learning of the inheritance and, in any case, within 10 years of the transfer date. Otherwise, it is not possible to claim the reserved share resulting from the donation. Therefore, a donation by the deceased is more convenient than a sale transaction in terms of protecting the rights of the recipient of the donation over the immovable property.
[1] The Grand Assembly of the Supreme Court of Appeals, Decision No: 1/2, Dated April 1, 1974.
[2] Cura, A. A. Muris muvazaası., 148.
[3] Kutluay, E. (2016). Bağışlama sözleşmeleri. Dokuz Eylul Universitesi (Turkey).