Legal Definitions - collatio bonorum

Collatio bonorum is a legal principle, primarily found in civil law systems, designed to ensure fairness and equal distribution of a deceased parent's estate among their children. It requires that significant gifts or advancements of money or property made by a parent to a child during the parent's lifetime are considered part of the total estate when calculating each child's share of the inheritance. The goal is to prevent one child from receiving a disproportionately larger share of the family wealth, both through lifetime gifts and inheritance, compared to their siblings.

Here are some examples illustrating how collatio bonorum might apply:

• Example 1: Down Payment for a Home

  Imagine a parent, Maria, has two children, Alex and Ben. During her lifetime, Maria gave Alex $100,000 to help with the down payment on his first home. She did not provide a similar significant gift to Ben. When Maria passes away, her remaining estate is valued at $400,000.

  How it illustrates collatio bonorum: Under this principle, the $100,000 gift to Alex would be "brought back" into the estate for calculation purposes, making the "notional" total estate $500,000. Each child's equal share would then be $250,000. Since Alex already received $100,000, he would receive an additional $150,000 from the remaining estate, while Ben would receive the full $250,000. This ensures both children ultimately receive $250,000 in total from their mother's wealth.

• Example 2: Funding Higher Education

  Consider Robert, who has three children: Sarah, Tom, and Lisa. Robert paid for Lisa's entire medical school tuition, which amounted to $200,000, because she was pursuing a demanding and expensive career path. Sarah and Tom pursued less expensive undergraduate degrees, which Robert also paid for, but these were not considered "advancements" in the same way as Lisa's professional degree.

  How it illustrates collatio bonorum: Upon Robert's death, his will states his estate should be divided equally among his children. If the $200,000 medical school tuition is deemed a significant advancement under collatio bonorum, it would be notionally added back to Robert's estate before division. If the estate is $700,000, the notional estate becomes $900,000. Each child's share would be $300,000. Lisa, having received $200,000, would receive $100,000 from the remaining estate, while Sarah and Tom would each receive $300,000, thus equalizing their total inheritance.

• Example 3: Forgiven Business Loan

  Elena has two children, David and Emily. She lent David $150,000 to start his business, with the understanding that he would repay it. However, shortly before her death, Elena formally forgave the loan, effectively making it a gift. Emily did not receive a similar financial boost.

  How it illustrates collatio bonorum: When Elena's estate is being settled, the $150,000 loan forgiveness to David would be treated as an advancement. If Elena's remaining estate is $450,000, the $150,000 would be added back notionally, creating a total of $600,000 for calculation. Each child's equal share would be $300,000. David, having already received $150,000 (through the forgiven loan), would receive $150,000 from the remaining estate, while Emily would receive $300,000, ensuring an equitable distribution of Elena's assets.