Can heirs in Israel sign an agreement to divide an estate differently than the will?

An Israeli estate is treated as a common pool until it is actually divided, and Section 110 of the Succession Law gives the heirs broad freedom to agree among themselves on how that pool is split. They can allocate the apartment to one heir, the bank account to another, and the securities to a third, regardless of the fractional shares the will or the intestacy rules would otherwise produce. The agreement binds only the heirs who sign it, so every heir entitled to a share must consent for it to govern the whole estate. The arrangement can be made before or as part of obtaining the succession or probate order, and it is commonly lodged with the Registrar of Inheritance Affairs or recorded by the Family Court.

The practical attraction is tax. Under Section 5(c)(4) of the Land Taxation Law, swapping assets among the heirs as part of the first division of the estate is exempt from purchase tax and betterment tax, because the law sees it as one inheritance rather than a sale between the heirs. That exemption disappears for any part funded by an equalization payment from a heir's own pocket. If one sibling pays another cash from outside the estate to take the family apartment, that portion is treated as a sale and taxed accordingly. Foreign heirs should settle the division on paper before assets are registered in individual names, since unwinding a completed registration later can trigger real transfer tax. See the full guide on distributing an Israeli estate for how this fits the wider process.

From the full guide: Distributing an Israeli Estate: Guide for Foreign Heirs

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