Fraud during one's lifetime

1. Introduction: Legal Limits of Pre-Inheritance Dispositions

Dispositions made by the testator during their lifetime often lead to serious disputes among the heirs. In particular, real estate transfers made with the intention of excluding certain heirs or favoring specific individuals are referred to in practice as "concealing assets during one's lifetime.".

Such transactions are not always illegal. However, transactions that appear to be sales but are actually donations, and are carried out with the intention of deceiving the heirs, are considered as fraudulent transactions by the deceased.

2. The Concept of Collusion and its Legal Basis

Collusion is when parties perform a transaction that does not reflect their true intentions, with the aim of deceiving third parties. Its general framework is regulated in the Turkish Code of Obligations

The type of fraud specific to inheritance law is fraudulent transaction by the testator. This occurs when the testator, with the intention of defrauding their heirs, presents a real estate transaction as a sale but is in reality a donation.

3. Which Transactions Are Considered Collusion?

Not every real estate transfer is a fraudulent transaction. The following criteria determine whether a transaction is considered a fraudulent transaction by the deceased:

Apparently there is a sales contract
Failure to pay the actual sale price
The testator had the intention of concealing assets
The close relationship between the parties

These factors are considered together.

4. Low-Price Sales Transactions

The most common situation is the transfer of property for a price far below its market value.

For example:

A property with a market value of 5 million TL was sold for 500 thousand TL
Failure to pay the sale price through a bank channel
The buyer's inability to pay

This constitutes strong evidence that the transaction was a donation.

5. Making Genuine Donations

Donations made by the testator during their lifetime are generally valid. However, a reduction lawsuit can be filed if they infringe upon the reserved share of the inheritance.

If the donation was made explicitly, it does not constitute fraudulent transfer by the deceased; rather, it concerns a violation of the reserved share.

This distinction is extremely critical.

6. Contracts for Lifetime Care

In practice, testators transfer their real estate through a "lifetime care agreement".

This contract is valid if it was genuinely made in exchange for care. However, if the care did not actually take place and the contract was intended to conceal assets, a claim of collusion may arise.

In the practice of the Supreme Court, whether or not the care has actually taken place is carefully examined.

7. Bank Accounts and Secret Transfers

Besides real estate, bank accounts, company shares, and other valuable assets can also be subject to collusion.

Large money transfers, especially those made shortly before death, can form the basis for allegations of asset concealment.

8. Criteria in Supreme Court Case Law

The criteria regarding fraudulent transactions by the deceased have been set forth in detail, particularly in the decisions of the 1st Civil Chamber of the Supreme Court of Appeals

The Supreme Court pays attention to the following points:

The deceased's economic situation
His relationship with the person to whom he transferred the property
The need at the time the transaction was made
Whether the sale price was actually paid

These criteria are evaluated together.

9. Proof Strategy

In cases alleging asset concealment during someone's lifetime, the burden of proof rests with the plaintiff, the heir.

The main evidence is as follows:

Witness statements
Bank records
Expert report on the market value of the property
The financial situation of the parties

Since there is no direct written evidence, the case is evaluated within its entirety.

10. The Difference Between Fraudulent Transfer by the Deceased and Reduction of Inheritance Shares

In cases alleging asset concealment during someone's lifetime, determining the appropriate type of lawsuit is crucial.

If the transaction appears to be a sale but is actually a donation → fraudulent transfer of inheritance
If the transaction is clearly a donation → reduction

Filing a lawsuit in the wrong can lead to serious loss of rights.

11. Statute of Limitations

Lawsuits for the cancellation and registration of title deeds based on fraudulent transactions by the deceased are not subject to statutes of limitations. This is because fraudulent transactions are definitively null and void.

However, the situation may be different if the property is transferred to a third party acting in good faith.

12. Most Common Scenarios

The most common examples of asset concealment during a person's lifetime are as follows:

Transfer of all real estate to a single child
Transfer of high-value real estate to the second spouse
Giving real estate to an adopted person
Transfers claimed to be in exchange for maintenance but which are in reality donations

These procedures are evaluated on a case-by-case basis in each specific case.

13. Conclusion: Not Every Era is About Hijacking Assets

Not every transfer of immovable property made by the testator during their lifetime constitutes fraudulent transfer of property. However, seemingly legitimate sales transactions made with the intention of deceiving the heirs are considered fraudulent transactions by the testator and may be subject to a lawsuit for the cancellation and registration of the title deed.

In such cases, economic analysis, witness evidence, and Supreme Court precedents play a decisive role. In allegations of asset concealment during one's lifetime, the correct legal characterization and proof strategy directly influence the outcome of the case.

In inheritance law, ensuring a balanced and fair distribution requires a technical and meticulous approach to allegations of collusion.

Inheritance distribution, transfer of assets in, fraudulent transfer of assets by the deceased, fraudulent transfer lawsuit, of assets during lifetime, violation of reserved share, lawsuit for cancellation and registration of title deeds, of immovable property, reduction difference, Supreme Court decisions on fraudulent transfer of assets by the deceased.

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