Undivided inheritance: what happens if nobody divides the estate

"We'll sort it out later." That is what many families say when a father or mother dies, especially when the children live in different countries. Five, ten, twenty years go by, and the house and the land are still in the name of someone who has died.

What an undivided inheritance is

Until the estate is divided, the assets belong to all the heirs together. Each heir is entitled to a share of the estate, but nobody owns any specific asset: not the house, not a plot of land, not a bank account.

This is what Portuguese law calls an undivided inheritance (herança indivisa). It has its own tax number and is administered by the cabeça-de-casal, the person who administers the estate. It is meant to be temporary, but in many families it lasts for decades.

What happens when nobody divides the estate

The costs keep coming. The municipal property tax (IMI) is still charged every year. Some heirs end up paying for the others, and that creates tension.

Nobody can sell alone. To sell the house or a plot of land, all the heirs must agree. If just one does not reply, or cannot be found, everything stops.

The number of heirs multiplies. When an heir dies, their own heirs step into the inheritance. An estate shared by three siblings can, within a few years, include widows and widowers, children and grandchildren in several countries who barely know each other.

The properties deteriorate. Closed-up houses fall into ruin and abandoned land loses its visible boundaries. In addition, in certain areas owners are required to clear their land, or face a fine.

Memory is lost. The people who knew where each plot was and where the neighbour's began are gradually disappearing. The later it is dealt with, the harder it is to identify and regularise the properties.

In short: not dividing the estate is not neutral. It is a decision that, over time, makes everything more expensive and more complicated.

How to end the undivided ownership

Portuguese law is clear: no heir is obliged to remain in an undivided inheritance forever. Any heir can ask for the estate to be divided. In practice, there are four routes.

Before any of these solutions, you need to know exactly which assets exist and what condition they are in: whether they are registered, whether the areas are correct, whether they are still in the names of earlier generations. A division based on poorly identified properties solves one problem and creates another.

Unblocking the inheritance, even from abroad

At MGPS International we deal with inheritances that have been stuck for years, with heirs spread across several countries. Our work starts where families usually get stuck:

1. We put the inheritance in order: we identify all the heirs, including those from earlier inheritances that were never divided.
2. We identify the assets: we cross-check the Land Registry, the Tax Office and cadastral information, and verify on the ground what is needed to clarify how the properties are identified.
3. We propose the solution: division, sale or purchase of shares, with the costs of each route.
4. We carry out the necessary steps through to final registration: we prepare and follow through the declaration of heirs (habilitação de herdeiros) and then, with suitable powers of attorney signed by the heirs in the countries where they live, their attorneys take part in the division or sale. We confirm in advance the requirements for the declarants and for each step.

Is there an inheritance stuck in your family? Use the initial assessment and tell us what you know, even if it is not much. We will reply with the steps to unblock the situation and a proposal in stages.

This article is for general information only and is not legal advice for any specific case.