Official liquidation of an estate (resmî tasfiye) is the separation, under court supervision, of the decedent's assets and debts, the payment of the debts, and the handover of the remaining values to those entitled to them. When official liquidation takes place under Article 632 of the Turkish Civil Code (TMK), the heirs are not liable for the estate debts. However, this route has conditions for its application; the fact that one of the co-heirs has accepted the inheritance affects an heir's request for official liquidation.
Official liquidation and the liquidation of an estate under the bankruptcy provisions following the disclaimer of an inheritance are not the same institution. Where all of the nearest statutory heirs disclaim the inheritance, TMK Article 612 applies. If it becomes clear during official liquidation that the estate is not sufficient to pay its debts, the bankruptcy provisions come into play under TMK Article 636. Choosing the correct route affects the deadline, the applicant, the order of the steps and to whom the remaining value goes. TMK, Articles 612 and 632–636.
What Need Does Official Liquidation Meet?
Even where the decedent leaves assets, the amount of the debts may be unclear, as may be the status of ongoing contracts or the collectability of receivables. An heir who accepts the inheritance outright carries the risk of being liable with personal assets. Where the conditions are met, official liquidation ensures that the estate is wound up in a separate process. The relationship between the heir's personal assets and the estate debts is thereby placed under a different legal regime.
This route is not a determination procedure to be requested merely by saying that "the debts are many". Ongoing business may need to be completed, receivables collected, disputed debts and rights may require a court ruling, and assets may have to be sold. The process takes time and costs money. An heir should weigh together the expectation of keeping the property in kind and the possibility of a sale to pay the debts.
Three Separate Liquidation Routes
| Starting situation | Legal basis | Main result |
|---|---|---|
| Request by an heir meeting the conditions | TMK Article 632 | Official liquidation under court supervision |
| Need to protect a creditor | TMK Article 633 | Official liquidation if the conditions are met |
| Disclaimer by all of the nearest statutory heirs | TMK Article 612 and Article 180 of the Enforcement and Bankruptcy Law (İİK) | Liquidation under the bankruptcy provisions |
| Insufficiency of the estate to pay its debts during liquidation | TMK Article 636 | Application of the bankruptcy procedure |
The fact that the routes in the table are mentioned under the same file name does not combine their conditions. In particular, the three-month period in TMK Article 633 and the liquidation requirement arising from TMK Article 612 are different. The defense that "the liquidation period has passed" cannot be assessed until the legal route being applied has been identified.
When May an Heir Request Official Liquidation?
Connection with Acceptance and Disclaimer Options
TMK Article 632 provides that each heir may request official liquidation instead of disclaiming the inheritance or accepting it in accordance with the official estate register (resmî defter). The application is therefore linked to the stage at which the heir's options to accept or reject are still available. The general period for rejection, the date of learning, the drawing up of the estate inventory and the summons to declare claims are each examined separately. For the lawsuit route where a rejection harms creditors, see our article on annulment of the disclaimer of an inheritance.
An heir who has accepted the inheritance without reservation cannot be assumed to have the same unconditional option once they later see the debts. Estate transactions that cause the loss of the right to reject are also important. Selling a property, transferring deposits into a personal account or concealing goods may affect the assessment of the application. Mandatory protective measures, however, are different. Their legal nature must be determined before any action is taken.
The Effect of One Heir's Acceptance
Where one of the heirs called together has accepted the inheritance, the request under TMK Article 632 is not taken into account. This rule does not mean that the other heir is left unprotected; their own right of rejection and any other legal remedies are examined. What changes is the possibility of placing the entire estate under official liquidation at the request of a single person.
Whether acceptance took place by express declaration or by conduct to which the law attaches a consequence may itself be a question of proof. Where the other side treats a bank transaction as a sign of acceptance, the applicant may argue that it was a necessary management expense. The purpose and scope of the transaction, how the money was spent and the records must be assessed. A receipt showing only the date of the transaction does not always resolve this dispute.
Under What Conditions May a Creditor Request Liquidation?
Under TMK Article 633, a creditor of the decedent may request official liquidation where, on credible grounds, they doubt that they will be able to recover their claim and no payment or security has been provided despite a demand for it. The period, counted from death or from the opening of the will, is three months. Being a creditor alone is not enough; the danger of non-recovery and the outcome of the demand for payment or security must be made concrete.
For example, rapid distribution of estate assets, a notice that the debts will not be paid, or the untracked transfer of estate income may be important in assessing the risk of non-recovery. The creditor should be able to document the contract, the account statement, the maturity of the debt, the demand for payment and, if any, the refusal. The heirs, in turn, may argue that the claim does not exist, has been paid, or that adequate security has been given.
For legatee creditors, the same provision regulates requesting the measures necessary to protect their rights. Their position is not in every respect identical to that of an ordinary creditor of the decedent. The priority between a claim arising from a legacy of a specific asset and the payment of the estate debts, as well as the paying capacity of the estate, are examined separately.
What Happens If All of the Nearest Heirs Reject?
The Estate Does Not Pass Directly to the Treasury
TMK Article 612 provides that where all of the nearest statutory heirs have disclaimed the inheritance, the estate is liquidated by the civil court of peace (sulh hukuk mahkemesi) under the bankruptcy provisions. In that case the remaining values are handed to the rights holders as if the heirs had not disclaimed the inheritance. The conclusion that "everyone rejected, so the property now belongs definitively to the Treasury" overlooks this special regulation.
In the decision of the 14th Civil Chamber of the Court of Cassation (Yargıtay 14. Hukuk Dairesi) dated 17 January 2018, E.2016/8441, K.2018/352, a dispute concerning the leaving of the estate to the Treasury, despite the rejection by the nearest heirs, was examined. The Chamber emphasized the duty of official liquidation under TMK Article 612, ex officio, and that this liquidation is not bound by a time limit. In the concrete file, a rejection decision issued without referring the matter to the court that was to determine the rejection statements was quashed. Full text of the decision. The route to follow where heirs are unknown or cannot be found at all is set out in our article on unknown heirs and the passing of an estate to the State.
The Right to Apply and Setting the Court in Motion
An application made in this situation generally aims to prompt the court to carry out a liquidation that the law already requires. It should not be subjected to the same conditions as the claim the decedent's creditor raises under TMK Article 633. The rejection decisions, the certificate of inheritance and the current status of all of the nearest statutory heirs should be placed in the file.
Where only some of the heirs reject, a different result may follow. The position of subsequent heirs, the existence of a spouse and the form of the rejection are assessed separately. Saying that everyone has rejected when the chain of heirship has been incompletely established may cause the liquidation to start incorrectly. The currency of the certificate of inheritance is therefore important.
Duties of the Liquidation Court and the Liquidation Officer
Official liquidation is carried out by the civil court of peace or by one or more liquidation officers whom it appoints. The liquidation officer is under the supervision and control of the court. The officer's duty is not the same as the general management role of an estate representative (tereke temsilcisi). While the estate representative keeps the estate's affairs running, the aim of the liquidation officer is to complete the liquidation by settling receivables and debts.
Under TMK Article 634 the work begins with the preparation of the estate register, and creditors and debtors are summoned by public notice (ilan) to declare their claims. Where an official register has previously been prepared, the liquidation proceeds in accordance with it. Nevertheless, information and disputes that come to light later cannot be disregarded. The scope of the register, the collections made and the results of the accounts must be capable of being checked.
Investigating the Assets
Land registry entries, vehicles, bank balances, company shares, commercial receivables and ongoing lawsuits are investigated. The balance on the date of death, as well as money movements after death, may be important. Closing an account does not mean that the money has disappeared or does not belong to the estate. Who withdrew it, where it was transferred and on what legal basis must be examined.
In the decision of the 14th Civil Chamber of the Court of Cassation dated 21 December 2015, E.2015/2302, K.2015/11816, inadequate investigation of assets and debts in a liquidation under the bankruptcy provisions, the failure to obtain a statement of a bank account reset to zero after death, and liquidation acts not carried out in accordance with the law were grounds for reversal. The decision shows that the stages of investigation and announcement cannot be skipped on the basis that "no property was found". Full text of the decision.
Collection of Receivables and Payment of Debts
TMK Article 635 includes within the liquidation the completion of ongoing business, the collection of receivables, the performance of obligations and, where necessary, the court's determination of rights and debts. The liquidation officer is obliged to inform the heirs about the relevant lawsuits, enforcement proceedings and administrative acts. Asserting a debt and accepting it are separate stages; a disputed receivable must be examined on its own.
For a creditor, the contract, invoice, promissory note, court decision or statement of account matters. Pledges and other security change the legal position of a claim. Where it becomes clear that the estate's assets are not sufficient to pay its debts, the ordinary order of payment should not be assumed; the transition to the bankruptcy procedure and the position of claims within that procedure must be assessed.
Special Stages of Liquidation Under the Bankruptcy Provisions
Article 180 of the Enforcement and Bankruptcy Law makes the liquidation of rejected estates subject to the bankruptcy provisions. The register, the method of liquidation, the announcements, the examination of claims and the closing steps are carried out under their own procedures. The suspension of liquidation under Article 217 of the Enforcement and Bankruptcy Law is a special stage that may apply where there are no assets in the estate; it is not a direct and unreasoned decision to close the case.
The 2015 decision also stated that where the suspension of liquidation is announced, the consequence of closure must be clearly stated in the notice if creditors do not request continuation within thirty days. Using this period as a general objection period for all official liquidation acts is incorrect. The provision on which an act rests and the content of the notice must be checked separately.
Sale of Immovables and Delivery of Remaining Assets
Under TMK Article 635, immovables in the estate are sold by public auction or, where all heirs agree, by negotiated sale. An heir's refusal to agree to a sale does not in every case prevent the necessary liquidation by public auction; the joint will required for a negotiated sale, however, is different. The legal basis, the valuation and the method of the sale are subject to court supervision.
The application of the sale proceeds to particular debts, the basis for the expenses and the remaining amount must be explained. While liquidation is ongoing, heirs may ask that property and money not needed for the liquidation be handed to them in whole or in part. However, while debts that have not yet been clarified exist, the immediate distribution of all the money should not be expected. The rights of creditors and the necessary expenses must be protected.
In a hypothetical example, if the total of the sales and collections realized from the estate is 3,000,000 Turkish lira (TL), the verified debts are 1,900,000 TL and the liquidation expenses are 100,000 TL, a balance of 1,000,000 TL remains, on the assumption that there are no other obligations. This shows only the logic of the calculation; in a real file, security, disputed claims, tax and legacy debts are assessed separately. A pre-sale estimated value is not the same as the net amount actually realized.
Objections to Liquidation Acts and Control of Expenses
Under TMK Article 634, heirs and creditors of the estate may file a written complaint with the civil court of peace within seven days of learning of acts made or planned by the liquidation officer. This is not the single route of application for all court decisions and all acts in bankruptcy liquidation. Special procedures and legal remedies are determined separately according to the nature of the act.
A complaint must explain which act is concerned, when it was learned of, and on what ground it is contrary to law or to the interests of the estate. Where it is alleged that the value was low, comparable data should be submitted; where unnecessary expense is claimed, the invoices and the relationship of authority; where collection was incomplete, the proof of the claim. The abstract statement "I do not trust the liquidation officer" does not replace a concrete request for supervision.
Court fees (harç), announcements, service of documents (tebligat), the sale, valuation and the officer's fee are separate expenses. The initial advance and the final account of expenses are not the same thing. A prolonged liquidation does not always show fault on the part of the officer; disputed rights may need to await the outcome of a lawsuit. Conversely, reporting work that has been done and work that is pending makes it possible to establish unnecessary delay.
File to Prepare Before Applying
The certificate of inheritance and the rejection decisions form the first group. Known assets, debts and security form the second. Dates of learning or notification, the acts on which an acceptance claim is based, and, in a creditor's claim, the demand for payment or security form the third. The file numbers of ongoing lawsuits and enforcement proceedings should also be added.
If the outcome sought is "official liquidation", "liquidation under the bankruptcy provisions" or only "protection", the application should be framed accordingly. Alternative facts may be explained, but the conditions of different institutions should not be merged into a single general sentence. The relationship of the file to any earlier estate or rejection file should also be stated, so that the risk of duplicate and contradictory proceedings is reduced.
What Should Heirs and Creditors Track in the Final Account?
Completion of the liquidation cannot be explained by the sale of the property alone. The assets identified at the outset, values found later, the sale and collection proceeds, payments made and the costs of the process must be reconciled with one another. Where the difference between the bank collection and the sale record is due to, for example, tax, expenses or another deduction, it should be shown separately. To whom, and in what legal capacity, the remaining amount is given forms part of this account.
For a creditor, the total sale price alone is not what matters. The recording of their claim, the amount accepted, any security and their position under the applicable liquidation procedure are considered together. For an heir, the basis for the statement that "the debts have been paid", and whether any unresolved claim or lawsuit remains, are important. A receivable that is difficult to collect not appearing in the file does not mean that it has legally ceased to exist.
When an act one wishes to object to comes to light, waiting for the end of the whole liquidation may cause a loss of time. The date of the act, the evidence of when it was learned of, the record relied on and the correction requested should each be stated separately. In this way a complaint about an administrative act is not confused with a dispute on the merits of a claim, and the court can see which concrete result is being sought.
Conclusion
The official liquidation of an estate is a special process that affects the personal liability of the heir and regulates the collection of creditors' claims. The heir's request, the creditor's request and the rejection by all of the nearest statutory heirs have different starting conditions. Once the correct legal route has been chosen, a complete investigation of the assets, a documented account of the debts, an appropriate method of sale and timely supervision of the acts determine the reliability of the liquidation.
For related aspects of the subject, you may also consult our article on the executor of the will (vasiyeti yerine getirme görevlisi).
Frequently Asked Questions
Is official liquidation the same as disclaiming an inheritance?
No. Disclaimer affects the acquisition of heirship; official liquidation is the court-supervised winding up of the estate's debts and assets. The conditions for applying and the status of the remaining value are different.
If one heir accepts, can the others request official liquidation?
The request under TMK Article 632 is not taken into account where one of the co-heirs has accepted the inheritance. The other heirs' own rights of rejection and other protective routes are examined separately.
If everyone rejects, does the estate pass to the State?
Where all of the nearest statutory heirs reject, TMK Article 612 applies. The remaining values after liquidation under the bankruptcy provisions are handed to the rights holders as if they had not disclaimed the inheritance.
Can a creditor request liquidation?
Yes, where the conditions of TMK Article 633 are met: the danger of non-recovery, no payment or security having been provided after a demand for it, and the three-month period. The liquidation requirement arising from TMK Article 612 is different.
Within what period must a complaint about a liquidation officer's act be filed?
A complaint under TMK Article 634 is filed in writing with the civil court of peace within seven days of learning of the act. Other acts and decisions are assessed under their own special routes.
Can I take the property in kind during liquidation?
Handing over property that is not needed for the liquidation may be requested. Where a sale is necessary to pay the debts, the expectation of in-kind delivery does not override the rights of creditors.
Sources and legal bases
- Turkish Civil Code No. 4721 (4721 sayılı Türk Medeni Kanunu), Articles 605–612, 627, 632–636.
- Law No. 2004 on Enforcement and Bankruptcy (2004 sayılı İcra ve İflas Kanunu), Articles 180, 208 et seq., 217, 254.
- Court of Cassation, 14th Civil Chamber (Yargıtay 14. Hukuk Dairesi), 21 December 2015, E.2015/2302, K.2015/11816.
- Court of Cassation, 14th Civil Chamber (Yargıtay 14. Hukuk Dairesi), 17 January 2018, E.2016/8441, K.2018/352.