Concealing Inheritance Assets Through Donation in Turkish Law

1. Definition and Legal Consequences of Inheritance Fraud

In Turkish law, the concept of inheritance fraud through gifting is the subject of lawsuits known as “fraudulent transfer of inheritance” cases. In such cases, it is alleged that the testator, while intending to make a gift, conceals this intention by disguising it as a sale or a lifetime care agreement. The primary aim here is to deprive the heirs of their inheritance.

The reason for concealing the gift agreement is to avoid the formal requirements for gifts as stipulated in the Turkish Civil Code and to violate the rights of heirs with reserved portions. The hidden gift agreement is considered invalid due to non-compliance with formal requirements, while the apparent contract is deemed void due to its fraudulent nature.

a. The Process of Proving Gifting and Evaluation Criteria

To consider a gift agreement within the scope of inheritance fraud in Turkey, it must be proven that the testator’s true intention was to make a gift. In this process of proof, factors such as the testator’s financial situation, the difference between the real value of the property and the sale price, and the testator’s motivation for gifting are taken into account. If the existence of a gift agreement is proven, the lawsuit filed by the heirs claiming inheritance fraud may be accepted. However, if the testator made fair gifts or distributed property to all heirs during their lifetime, the claim of inheritance fraud is generally not accepted.

2. What are the Criminal Sanctions for Inheritance Fraud?

In Turkish law, inheritance fraud is a legal concept that falls under civil law rather than criminal law. Therefore, there is no direct criminal penalty for inheritance fraud. However, when inheritance fraud is detected, legal consequences such as the annulment of the fraudulent transaction and the return of the property to the estate occur. Additionally, heirs who have been deprived of their inheritance rights through inheritance fraud can file a lawsuit for compensation for their losses. Furthermore, if crimes such as forgery or fraud are committed in connection with inheritance fraud, criminal law comes into play, and judicial penalties can be applied to the relevant persons. These penalties can range from fines to imprisonment.

3. What is the legal basis for inheritance fraud?

The main legal basis for inheritance fraud in Turkey is the Unification of Jurisprudence Decision dated April 1, 1974, and numbered 1/2. This decision regulates the right of heirs to file a lawsuit against fraudulent transactions made by the testator to deprive the heirs of their inheritance rights.

4. Who can be the plaintiff in inheritance fraud cases?

In inheritance fraud cases in Turkey, all heirs whose inheritance rights have been violated, whether they have a reserved portion or not, can be plaintiffs. Heirs have a legal interest in claiming the nullity of the contract by asserting that it is fraudulent, as the contract made by the testator fraudulently prevents the inheritance rights that should legally pass to them.

5. Who is the defendant in inheritance fraud cases?

The defendant is the person or persons who participated in the fraudulent transaction, who are parties to the transaction, who acquired the property as a result of the fraudulent transaction, or to whom the transfer was made, and who are alleged to have received property fraudulently from the testator. If the claim in the case is related to the cancellation and registration of the title deed, the owner of the title deed record should be shown as the defendant.

6. Who bears the burden of proof in inheritance fraud cases?

The burden of proof lies with the party claiming the existence of fraud. According to both Article 6 of the Turkish Civil Code and Article 190/1 of the Code of Civil Procedure, the plaintiff party must prove that the testator’s real intention and purpose in the transfer was to deprive the heir of property.

7. How are evidences collected and evaluated in inheritance fraud cases?

When collecting and evaluating evidence in Turkish inheritance fraud cases, factors such as the traditions and customs of the country and region, social tendencies, the ordinary course of events, whether the testator had a just and reasonable cause for making the contract, the purchasing power of the defendant, the difference between the sale price and the real value, and the relationship between the parties should be considered. A Turkish Supreme Court decision emphasized the importance of this issue by stating, “A healthy, fair and correct resolution of such disputes depends on revealing the true nature of the transfer to the defendant, in other words, the testator’s real intention and purpose, in a way that leaves no room for hesitation.”

8. Is there a statute of limitations or a deadline for inheritance fraud cases?

Lawsuits based on inheritance fraud claims in Turkey are not subject to any statute of limitations or deadline as a rule, as they are considered to be tort actions against the estate and constitute improper registration.

9. What factors should be considered in inheritance fraud cases?

If it is claimed that the testator made transfers to all heirs during their lifetime or transferred immovable property to all heirs, this claim should be examined, all evidence to be presented by the parties should be collected completely, and the movable/immovable properties and rights transferred from the testator to all heirs should be investigated. For it to be said that the testator made a balancing adjustment considering the rights balance, there should not be a significant difference between the values of the properties and rights transferred to each heir separately.

10. How is the situation evaluated in inheritance fraud cases where the testator has made transfers to all heirs?

If it is claimed or alleged that the testator made transfers to all heirs during their lifetime or transferred immovable property to all heirs, this claim should be examined, all evidence to be presented by the parties on this issue should be collected completely, and the movable/immovable properties and rights transferred from the testator to all heirs should be investigated.

11. What is the effect of cadastral determination in inheritance fraud cases?

In Turkish law, if the testator dies before the cadastral determination, the lawsuit to be filed by the heirs must be filed within the 10-year deadline stipulated in Article 12/3 of the Cadastral Law No. 3402, starting from the date of finalization of the cadastral determination. If the testator dies after the cadastral determination date, there is no deadline or statute of limitations.

12. How is a lifetime care agreement evaluated in inheritance fraud cases?

In Turkish law, a lifetime care agreement is a contract that imposes mutual rights and obligations on the parties. With this agreement, the care recipient transfers the ownership of the subject property to the caregiver, while the caregiver undertakes to care for and look after the care recipient until death, as stipulated by law. A Turkish Supreme Court decision stated, “To determine whether the transfer made by the testator in exchange for care until death is fraudulent, factors such as the testator’s age at the time of the contract, physical and general health condition, family circumstances and relationships, the amount of assets held, the ratio of the transferred property to the entire estate, and whether this remains within a reasonable limit should be considered.”

13. How are cooperative shares or company shares evaluated in inheritance fraud cases?

In cases filed with the claim that contracts for the transfer of values such as cooperative shares or company shares were carried out to defraud the inheritance, these transfer transactions cannot be subject to inheritance fraud according to the Unification of Jurisprudence Decision dated 01.04.1974 and numbered 1/2. However, it should not be overlooked that if the conditions exist, it can be evaluated within the scope of general fraud in accordance with Article 19 of the Turkish Code of Obligations, and its reduction can also be requested.

14. How is a reduction claim evaluated in inheritance fraud cases?

A reduction claim aims to bring the testator’s inter vivos or mortis causa dispositions that infringe on the reserved portions to the legal limit. For a reduction case to be heard, the testator must have first infringed on the rights of those with reserved portions. In this case, the estate should be determined and calculation should be made according to its value at the date of the opening of the inheritance.

15. How is the situation of multiple transfers evaluated in inheritance fraud cases?

In cases where multiple transfers are in question, it should first be evaluated whether the transfer that is the subject of the case and claimed to be fraudulent is indeed fraudulent. If it is determined to be fraudulent, then it should be considered step by step whether the subsequent transferees are in a position to know or should have known about the fraudulent transaction (whether they are in bad faith). A positive or negative decision should be made about the plaintiff’s claim or claims accordingly.

16. How is the good faith of the last registered owner evaluated in inheritance fraud cases?

The last registered owner can claim that they became the owner in good faith relying on the registration in the land registry, in other words, that they benefit from the protection of Article 1023 of the Turkish Civil Code. In such a situation, the plaintiff must prove that the last registered owner was not in good faith, i.e., was in bad faith. According to the Unification of Jurisprudence Decision of the Turkish Supreme Court dated 8.11.1991 and numbered 1990/4 E. 1991/3 K., the principle that “the allegation of bad faith is not a plea but an objection, can be put forward at any time without being subject to the prohibition of extending the claim and defense, and will be taken into consideration ex officio by the court” should be observed.

17. How can the cancellation and registration of the land registry be requested in inheritance fraud cases?

The plaintiff can request the cancellation and registration of the land registry in proportion to their inheritance share. According to the Unification of Jurisprudence Decision dated 01.04.1974 and numbered 1/2, each heir can file a lawsuit on behalf of the estate provided that participation is ensured, or they can file a lawsuit limited to their own inheritance share.

18. How is the request for registration in proportion to the shares of all heirs evaluated in inheritance fraud cases?

In cases filed with a request for cancellation of the land registry and registration in proportion to the shares of all heirs, if all heirs are involved in the case, there is no problem in terms of party status. However, if it is determined that there are heirs who are not party to the case, in other words, heirs outside the case, the plaintiff should be reminded that the estate is subject to joint ownership as of the date of death and that there are heirs who are not participating in the case. The plaintiff should be given time to obtain the consent of the heirs/partners who are not involved in the case or to file a lawsuit for the appointment of a representative to the testator’s estate in accordance with Article 640 of the Turkish Civil Code.

19. How is the request for registration in the name of the testator evaluated in inheritance fraud cases?

According to Article 28 of the Turkish Civil Code, as personality ends with death, registration cannot be made in the name of a deceased person as a rule. If the conclusion of the demand is “cancellation of the land registry and registration in the name of the testator”, this request should be accepted as a request for return to the estate, and if the case is to be accepted, it should be decided to register in the name of all heirs.

20. How is the claim of incapacity evaluated in inheritance fraud cases?

If one of the reasons relied upon is incapacity, considering that it is related to public order and that if incapacity is determined, there will be no need to examine other reasons, the legal reason of incapacity should be addressed first. If it is determined that the testator was capable at the date of transfer, then the facts based on the legal reason of inheritance fraud should be evaluated.

21. How is the claim of abuse of power of attorney evaluated in inheritance fraud cases?

If the testator carried out the transfer through their attorney and one of the legal reasons relied upon is the abuse of power of attorney, it is necessary to first determine whether the power of attorney was abused and then to focus on the legal reason of inheritance fraud.

22. What approach should be taken in inheritance fraud cases where multiple legal reasons are relied upon?

In cases where multiple legal reasons are relied upon, if the reasons allow for examination of each other, the examination should be made in order of importance. However, it should not be forgotten that while in cases based on the legal reason of inheritance fraud, the plaintiff can file a lawsuit in proportion to their inheritance share, in other reasons (incapacity, abuse of power of attorney, etc.), if the defendant is a third party, a lawsuit filed in proportion to the inheritance share cannot be heard.

 

 

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