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Successor Is a Natural Person

In case of inheritance, if the successor is a natural person, the inherited units may be transferred to the successor’s pension account or cashed out. It is also possible to transfer a part of the inherited units to the pension account of the successor and cash the other part out on the basis of the same succession application. Income tax must be paid on cashed out units.

Documents to be submitted to the bank:

  • application,
  • copy of the notarized succession certificate,
  • agreement on the distribution of the estate (if there are more successors).

The successors must submit a relevant application and a copy of the notarized succession certificate to the relevant bank office. The bank will send the necessary documents to the Estonian pension register.

If there are several successors, they are the joint owners of the estate and they must dispose of it jointly. Due to the fact that a unit of a pension fund may not be owned by more than one person at a time, the successors must conclude an agreement to divide the units that are part of the estate. In order to divide the units, an agreement may be concluded in one of the following manners:

  • all successors are present at the same time and express their will jointly or
  • submit an agreement on dividing the estate, which may be notarized.

A foreign document that is to be used in Estonia, must be legalized at the foreign ministry or foreign representation of the foreign state where the document is issued and then at the foreign representation of the Republic of Estonia (embassy) or at the consular department of the Foreign Ministry.

When the successor has subscribed to the mandatory funded pension (is an obligated person), he or she may once, within one year from the issue of the succession certificate, apply for redemption of all the inherited pension fund units or to transfer them to his or her own pension account.

If the successor has not applied, within a period of one year, for the redemption or transfer to his or her pension account of the pension fund units, he or she may within a period of ten years after the opening of succession apply only for the transfer of the inherited units to his or her pension account.

If the successor has not subscribed to the mandatory funded pension (is not an obligated person), he or she may request the redemption of the units once within a period of ten years after the opening of succession. For this, the heir has to submit a relevant application and a copy of the notarised succession certificate to the suitable bank office. The bank forwards the documents to the registrar of the Estonian pension register.

NB! Payments of the inherited units to natural persons are taxed with income tax.

NB! If the bequeather has concluded an insurance contract for the payments from the funded pension, the successors have to contact an insurance company in order to receive information regarding the guarantee period and the beneficiary.