The Big Headline: No Inheritance Tax
Israel does not have an inheritance tax. This is one of the most significant differences from many Western countries and a genuine financial advantage for families building wealth in Israel. When a person dies, their assets pass to their heirs without any tax being levied on the transfer. There is no estate tax, death tax, or succession tax.
This has been the case since Israel abolished its inheritance tax in 1981. While there have been occasional political discussions about reintroducing it, as of 2025 there are no active legislative proposals to do so.
However, the absence of inheritance tax does not mean the succession process is simple. Who inherits what, how quickly they can access the assets, and what legal steps are required depend on whether the deceased left a valid will.
Intestate Succession: Dying Without a Will
If you die without a will (intestate) in Israel, the Inheritance Law of 1965 determines how your assets are distributed. The rules differ significantly from common law systems like the US and UK.
Spouse's Share
The surviving spouse receives:
- All movable property: Furniture, vehicles, personal belongings, bank accounts, investment portfolios, and any other non-real-estate assets.
- Right to live in the shared home: The spouse has a right to continue living in the family apartment/house, even though they do not inherit full ownership of it.
- Half of the estate's value (when there are children from the marriage). The other half is divided among the children.
Children's Share
Children divide the remaining half of the estate equally among themselves. This includes both biological and legally adopted children. Step-children do not inherit under intestate law unless formally adopted.
If There Is No Spouse
If the deceased has no surviving spouse, the entire estate passes to the children equally. If there are no children either, the estate passes to parents, then siblings, then more distant relatives, following a statutory order of priority.
Common Law Partners
Israeli law recognizes common law partners (Yadua BeTzibur) for inheritance purposes, similar to a legal spouse. However, proving common law status after death can be complicated and may require court proceedings. A will eliminates this uncertainty.
Types of Wills in Israel
Israeli law recognizes four types of wills, each with different formality requirements:
1. Handwritten Will (Tzava'a Bihtav Yad)
Written entirely in the testator's own handwriting, dated, and signed. No witnesses are required. This is the simplest form but also the most easily contested if the handwriting or mental capacity is challenged.
2. Witnessed Will (Tzava'a Be'edim)
The most common type. Written in any format (typed or handwritten), signed by the testator in the presence of two witnesses, who also sign. The testator must declare to the witnesses that this is their will. This is the standard format recommended by Israeli attorneys.
3. Will Before an Authority (Tzava'a Bifnei Rashut)
Made orally before a judge, head of a religious court, or a Registrar of Inheritance Affairs. The authority records the will and the testator confirms and signs it. This type carries strong legal weight because the authority verifies the testator's identity and mental capacity.
4. Oral Will (Tzava'a Be'al Peh)
Made verbally before two witnesses when the testator believes death is imminent (on their deathbed). The witnesses must record the will and file it with the Registrar as soon as possible. This type expires automatically after one month if the testator recovers.
The Probate Process
After death, the estate must go through a legal process to be distributed. There are two paths depending on whether a will exists:
Tzav Yerusha (Inheritance Order)
If there is no will, heirs petition the Registrar of Inheritance Affairs or a Family Court for a Tzav Yerusha. This is an order confirming who the legal heirs are and their respective shares under the statutory rules. The process typically takes 3-6 months if uncontested.
Tzav Kiyum Tzavaa (Probate Order)
If there is a will, the executor or heirs petition for a Tzav Kiyum Tzavaa, which is an order confirming the will's validity and authorizing distribution according to its terms. If no one contests the will, this process also takes approximately 3-6 months.
Contested Cases
If heirs dispute the will or the intestate distribution, the case goes to Family Court. Contested inheritance cases can take 1-3 years to resolve and become expensive. A clear, properly executed will dramatically reduces the risk of disputes.
Key Differences from Common Law
Several aspects of Israeli inheritance law may surprise olim from common law countries:
- No concept of "executor" in the common law sense: Israeli law uses an "estate administrator" (Menahel Izavon) appointed by the court when needed, but many estates are distributed without one.
- מוטב (Mutav) designations override wills: Beneficiary designations on ביטוח חיים (Bituach Chaim) (life insurance), pension funds, and Keren Hishtalmut take precedence over anything stated in the will. These assets transfer directly to the named beneficiary outside the probate process.
- Spousal rights are strong: The surviving spouse cannot be easily disinherited. Even with a will, a spouse who was dependent on the deceased may petition the court for a larger share than the will provides.
- No trust structures: Israel does not have the trust tradition common in the US and UK. While Israeli law does recognize trusts, they are uncommon and lack the sophisticated infrastructure available in common law jurisdictions.
- Religious courts have jurisdiction: For certain matters (particularly among observant Jewish, Muslim, Christian, and Druze communities), religious courts may have jurisdiction over inheritance issues. The interaction between civil and religious law can be complex.
What Olim Should Do
- Write an Israeli will. Even if you have a will from your home country, create a separate Israeli will covering your Israeli assets. This simplifies the process and ensures Israeli law is applied correctly.
- Review קרן פנסיה (Keren Pensia) and insurance beneficiary designations. These override your will and must be updated separately.
- Consult a cross-border attorney. If you have assets in multiple countries, you need coordinated estate planning to avoid conflicts between jurisdictions.
- Inform your spouse about all assets. In the event of your death, your spouse needs to know where your bank accounts, investments, pension funds, and insurance policies are. Create a document listing all financial assets and their locations.