Most Czechs will inherit real estate, but they don't want to count on it. However, proper planning can significantly affect family relationships
Death as a life challenge
The death of a loved one is one of life's greatest challenges. It brings not only deep sadness but also fundamental questions about how to deal with the future. Few people want to think about these things in advance, but it is early preparation that can make difficult times easier for families and avoid unnecessary conflict.
Inheritance, whether in the form of money or property, has played an important role throughout history. In earlier times , it was often the key to preserving family property or assets that were passed down from generation to generation. Noble families, for example, were careful to ensure that property was distributed in accordance with family rules. Even in ordinary families, inheritance was traditionally governed by unwritten laws, with the eldest descendant taking the majority of the property while other family members received a smaller share.
In modern times, however, the rules are constantly changing and the emphasis is on a fairer distribution of property. Yet this remains a difficult topic for many families. Communicating openly about the future of assets, making a will or dividing up rights to bank accounts are among the key steps that can make difficult times go more smoothly.
Responsible planning is not just an estate issue, but also a way to preserve family relationships and ensure that financial matters are handled fairly and smoothly. In fact, inheritance is much more than an administrative process - it is a gesture of care and responsibility to those who will be left behind.
Czechs and inheritance
According to a Partners Bank survey conducted last year, 83% of Czechs do not include inheritance in their financial planning. Yet 60% of respondents said that an inheritance would have a positive impact on their financial situation. Real estate is the most common form of inheritance, accounting for up to 70% of all cases. Property is also a significant factor, especially for younger generations who are struggling with rising housing prices. "The real estate market has long been a big issue, especially for young Czechs. Generation Z is worried that they will not be able to afford their own home in the future due to high real estate prices," says Marek Ditz, director of Partners Bank.
The survey also showed that more than a fifth of potential heirs expect to inherit funds in bank accounts, while another 10% expect to receive a sum of money in cash. "Inheritance is a tricky subject for many, as on the one hand, inheritance can provide for a happy life and sort out housing, but at the same time it can be a source of disputes and even divide many families," adds Ditz.
Different approaches between generations
Interestingly, the approach to using inherited property varies by age. Generation Z, i.e. young people aged 18-26, are most likely to use the property for their own home (38%), while older generations are more likely to sell it (up to two-fifths of the time). Generation Z is also more concerned about the insecurity of renting in old age, while older generations, who mostly already own a home, look at inheritance more as a means of financial security. According to Mark Ditz, it is therefore important for young people to take the possibility of inheritance into account when planning their finances, which could help them considerably, for example with property renovation .
Up to 10% of people expect a cash inheritancePhoto: Adobe Stock
Financial aspects of inheritance
For higher income groups, securities or bonds are growing in importance as a form of property passed down within the family. "Inheritances can take many forms, from real estate to financial assets to government bonds. In any case, it is a good idea to think about these things early on and ensure a smooth transition for the survivors," explains Marek Ditz.
The survey also showed that money in bank accounts is the primary source of security for lower-income Czechs. However, as income rises, so does the proportion of those who prefer real estate as their main source of financial security. "You need to take into account all the possible risks of unexpected life situations, unfortunately including death," Ditz points out the importance of early preparation.
Products to make settling an inheritance easier
Many people don't realize that even money deposited in a retirement savings plan with a designated person or life insurance benefits are not paid out immediately, nor is there a blockage of money in accounts. Financial products go through the standard probate process, which can take at least several months. In the meantime, one of the partners may be in financial distress. Even if they have a joint account. If one of the partners is only a disposition with limited rights, they may find it difficult or impossible to access the finances after the death of the sole account holder. This can be a problem not only in providing for funeral or current household expenses, but also if money for services is leaving the account in the form of set standing orders.
To avoid such complications, Partners Bank offers a unique For Two package that includes a joint checking and savings account, with both partners having equal rights and complete control over the finances. In addition, each partner has his or her own checking and savings account within the package, allowing them to effectively manage both joint and individual finances. In the event of the death of one of them, the account remains accessible to the other owner, eliminating the risk of the finances being blocked at a critical time.
"This product provides the reassurance that the surviving partner will not have limited access to finances," explains Ditz. Only half of the balance is subsequently subject to probate. In most cases, 75% to 100% of the funds will go to the surviving joint account holder, while the remainder is inherited by, for example, the deceased's children.
Partners Bank's research has shown that inheritance can have a major impact on the financial stability of families. However, in order to really help, it is important to talk openly about it early on and use tools to ensure these situations run smoothly. The right products and agreements can save survivors a lot of worry and provide stability even in the most difficult times.
