The First Generational Transfer

Poland is currently undergoing its first significant modern generational wealth transfer as the “founder generation” that emerged after the economic transformation of the 1990s approaches retirement age. This shift has changed succession planning from a distant consideration into an actual business necessity. Decades of a state-controlled economy previously disrupted family traditions and eliminated ancestral fortunes. Consequently, the jurisdiction is still developing the judicial precedents and legal scholarship that are already well established in Western European models.

Evolving Strategies

Planning strategies are evolving from simple testamentary dispositions towards more sophisticated wealth management structures. The 2023 introduction of the Polish family foundation (fundacja rodzinna) has provided a systemic vehicle for long-term asset protection and professionalised continuity. Modern planning must now account for increased international mobility, as many successors reside abroad while overseeing domestic assets within the EU regulatory framework. These structures increasingly need to address the complexities of blended family dynamics and cross-border compliance.

The Founder’s Perspective

Polish entrepreneurs often maintain a strong personal identity with their businesses, which can lead to a reluctance to relinquish operational influence. This preference for continued oversight is frequently coupled with a traditional scepticism regarding the delegation of authority to external professional fiduciaries. Effective succession models in Poland now focus on balancing founders’ desire for long-term influence with the practical autonomy required by the next generation.

First-Generation Wealth

Wealth in Poland is predominantly a first-generation phenomenon, meaning the jurisdiction lacks established “old money” traditions of intergenerational wealth management. Family wealth, rather than consisting of diversified portfolios, is typically concentrated in one core asset – such as single- or dual-owner structures around a primary operational company. As these frequently include siblings or spouses as co-owners, succession planning must additionally address complex dynamics between various family branches and corporate structures rather than focusing solely on linear parent-to-children transitions. Furthermore, many small and medium-sized enterprises still operate as sole proprietorships, which presents distinct legal and operational challenges during the estate transition process.

Industry-Specific Planning Considerations

The diversity of the Polish economy requires tailored succession approaches to ensure that legal solutions match the operational needs of specific sectors. Key industries include manufacturing and processing – specifically food, furniture or building materials – as well as construction, logistics, and a robust IT sector. Effective planning in these areas often involves the use of specialised vehicles, such as the Polish family foundation, to manage industry-specific capital requirements and regulatory frameworks.

Legal Concepts of Residence and Habitual Residence

Under Polish private international law, the equivalent of “domicile” is the “place of residence”, defined as the locality where an individual stays with the intent of permanent residence. This definition combines factual presence with a subjective intent to remain. In contrast, EU law utilises the concept of “habitual residence”, which focuses primarily on the objective centre of life interests and factual circumstances.

Inheritance Taxation of Local and Global Assets

Polish inheritance tax applies to all assets located or rights exercised within Poland, regardless of the beneficiary’s status. For foreign assets, tax liability is triggered if the beneficiary is a Polish citizen or resident at the time the succession opens. Since Poland has entered into very few bilateral treaties regarding inheritance tax, cross-border estates involve a significant risk of double taxation.

Succession Jurisdiction and Choice of Law

Pursuant to Regulation (EU) No 650/2012, jurisdiction and the applicable law for the entire estate are typically determined by the deceased’s habitual residence at death, though testators may elect their national law via a valid will. The European Certificate of Succession significantly streamlines the process of proving rights to assets inherited under foreign law within the EU. Conversely, non-EU citizens often encounter substantial difficulties in demonstrating the effective acquisition of Polish assets, particularly real estate, when relying on foreign succession laws.

Matrimonial Property and Divorce Jurisdiction

Poland is not a party to EU Regulations 2016/1103 or 2016/1104, meaning marital property regimes are governed by bilateral treaties or domestic private international law. Generally, the common national law of the spouses prevails, followed by the law of their joint residence or the state with the closest connection. Divorce jurisdiction is separately governed by Regulation (EU) 2019/1111, where Polish courts assume authority primarily based on the habitual residence of the spouses.

Criteria for Establishing Tax Residency

In Poland, income tax residency is primarily determined by an individual’s “place of residence” within the territory. An individual is deemed a resident if they maintain a centre of personal or economic interests – often referred to as the “centre of vital interests” – within Poland or stay in the country for more than 183 days during a tax year. Meeting either of these independent criteria establishes residency, which triggers comprehensive reporting and payment obligations to the Polish tax authorities.

Tax Liability and Double Taxation Relief

Polish tax residents are subject to unlimited tax liability, meaning their entire worldwide income is taxable in Poland regardless of the source or location of the assets. Conversely, individuals who do not meet the residency criteria are subject to limited tax liability, covering only income sourced directly from Polish territory (such as earnings from employment in Poland or income from Polish-based real estate). Potential issues of double taxation for residents with global interests are typically addressed through the extensive network of bilateral tax treaties concluded by Poland, which generally follow OECD standards.

Statutory Framework and Formalities

In Poland, testamentary succession takes precedence over statutory rules, which apply only in the absence of a valid will or if the designated heirs are unable or unwilling to accept the estate. Formal acceptance via a notarial deed or court order is a prerequisite, with the “benefit of inventory” serving as the prevailing standard to limit liability for estate debts to the net value of assets. Heirs must formally decide whether to accept or reject the estate within a six-month statutory period from the date they learned of their entitlement.

Intestate Inheritance Groups

The Polish Civil Code establishes a hierarchical system where a subsequent group inherits only if members of the preceding group are ineligible or have predeceased the testator.

• Group I: The spouse and children inherit in equal shares, though the spouse is guaranteed a minimum of one-quarter of the estate.
• Group II: In the absence of descendants, the spouse receives at least half of the estate, with the remainder divided between the deceased’s parents, or siblings and their descendants as substitutes.
• Groups III and IV: These categories encompass grandparents and their descendants, as well as stepchildren, respectively, provided that specific statutory conditions are met.
• Escheat: If no eligible kin are identified, the estate passes to the municipality of the deceased’s last residence or the State Treasury.

Co-Ownership and Estate Division

Confirmation of succession establishes a state of co-ownership among all heirs, which persists until a formal division of the estate (dział spadku) is executed. This interim period can hinder operational control over business assets, particularly as any action exceeding “ordinary management” requires unanimous consent or court intervention. Special complexities arise if a minor is an heir, as their participation necessitates prior approval from a guardianship court for significant management decisions. Final distribution of specific assets is achieved through either a unanimous notarial agreement or judicial proceedings.

The Nature and Value of Legitime Claims

Polish law provides a monetary claim known as “legitime” (zachowek) to individuals who would have otherwise inherited under intestate rules. While the testamentary heir becomes the legal owner of the estate, they remain a debtor to the entitled parties if the latter choose to exercise their claim. Generally, the claim amounts to one-half of the value of the statutory share, though this increases to two-thirds for minors and those permanently incapacitated for work.

Calculation Basis and Family Foundations

The basis for calculating legitime includes the net estate value plus specific lifetime transfers, such as all donations to heirs regardless of timing, and transfers to third parties or family foundations made within ten years of the testator’s death. Customary small gifts and standard costs associated with upbringing and education are excluded from these calculations. Assets transferred to a family foundation are effectively insulated from legitime claims once the ten-year statutory period has elapsed, allowing for long-term asset protection.

Liquidity Challenges in Succession

Because legitime is typically a monetary obligation, it can create significant practical complications when the estate consists of illiquid assets such as enterprises. Succession planning in Poland must prioritise securing sufficient cash reserves to settle these obligations without compromising the integrity of inherited business assets. This ensuring of liquidity is essential to prevent the forced sale or fragmentation of a family business to satisfy forced heirship claims.

Forfeiture and Waiver of Rights

Inheritance rights and legitime claims can be limited or waived through specific legal mechanisms:

• Unworthiness: A court may declare an heir unworthy due to misconduct such as serious intentional crimes against the deceased or interference with the integrity of the will.
• Disinheritance: A testator may explicitly deprive a forced heir of their legitime within a will for statutory reasons, such as persistent neglect of family duties or antisocial conduct.
• Renunciation: Potential heirs may enter into a lifetime notarial agreement with the testator to waive their future inheritance or legitime rights, either in part or in full.

Statutory and Contractual Property Regimes

The default matrimonial regime in Poland is the statutory community of property, which encompasses assets acquired by either spouse during the marriage, with specific exceptions for personal property such as gifts or inheritances. Spouses may modify or terminate this regime through a notarial agreement (prenuptial or postnuptial), opting for the separation of assets or an extended community property model. The community of property automatically dissolves upon a court-ordered separation or a final divorce decree, at which point assets are typically divided into fractional shares.

Lifetime Dispositions and Consent Requirements

Managing joint assets during one’s lifetime is subject to statutory restrictions, requiring the other spouse’s consent for significant transactions, including the disposal or encumbrance of real estate or making substantial donations. Under the Family and Guardianship Code, a transaction conducted without the necessary consent remains in a state of “suspended effectiveness” until ratified by the other spouse, otherwise facing potential nullity. This regime is notably more restrictive than testamentary freedom, as a spouse may independently designate the future distribution of their expected share in joint assets within a will without prior consent.

Succession Consequences and Management Paralysis

Upon the death of a spouse, the community of property is converted into fractional co-ownership, with the deceased’s estate typically comprising their personal assets and a one-half share of the joint property. This transition often leads to “management paralysis”, as the surviving spouse and other heirs become co-owners of every individual asset within the former community pool, requiring unanimous consent for management decisions. To ensure business continuity and operational control, succession planning often prioritises holding key assets, such as company shares, as personal property rather than joint matrimonial property.

Spousal Inheritance Rights and Exclusions

A surviving spouse is entitled to inherit regardless of the matrimonial property regime in place, falling into either the first or second inheritance group depending on the presence of descendants. While spouses qualify for a full inheritance tax exemption under the “Group 0” status – subject to timely reporting – they may be excluded from statutory succession if the deceased had filed for divorce or separation based on the survivor’s fault. Furthermore, spouses who are legally separated at the time of death are automatically barred from statutory inheritance rights under the Civil Code.

Types of Agreements and Formal Validity

Poland recognises both prenuptial and postnuptial agreements, which must be executed as a notarial deed to be valid under the Family and Guardianship Code. Spouses may establish a total separation of property, where each retains assets acquired both before and during the marriage, or opt for a separation with equalisation of gains upon dissolution. While full asset disclosure is not a strict statutory requirement for validity, the concealment of significant facts may allow a party to void the agreement based on a legal error (błąd).

Impact on Estate Planning Efficiency

A contractual separation of property simplifies succession by ensuring the testator owns assets individually rather than within a community pool, as the default community regime often leads to management paralysis upon death. By maintaining assets as personal property, a testamentary heir can exercise full corporate rights in a simplified way, bypassing the need for the unanimous appointment of a representative required under joint ownership.

Relationship With Inheritance and Legitime Rights

It is critical to note that a marital agreement regarding property separation does not automatically exclude a spouse from statutory inheritance or legitime claims. The agreement only regulates the ownership of assets during the lifetime of the spouses and does not waive future succession rights. To fully exclude a spouse from inheritance or forced heirship, a separate notarial agreement for the renunciation of inheritance must be concluded. Therefore, comprehensive planning requires co-ordinating marital property agreements with specific testamentary and renunciation instruments.

Gift and Inheritance Tax

Acquisition by an individual of ownership of property located on the territory of Poland, or of rights exercised in Poland, by way of gift, is generally subject to gift and inheritance tax. The scope of this tax also covers the acquisition of movable property located abroad or property rights exercised abroad, provided that at the time the gift agreement was concluded, the recipient was a Polish citizen or had their permanent residence in the territory of the Poland. Inheritance and gift tax is payable by individuals who have acquired assets through inheritance or donation.

General Principles

Taxation depends primarily on the degree of kinship between the donor and the recipient (tax groups indicated below), the value of the gifted asset, and any previous acquisitions received from the same person. In certain cases, taxation depends on fulfilling formalities related to notifying tax authorities of the received gift. Failing to report a gift within the six-month statutory deadline can result in the loss of full tax exemptions for immediate family members.

Tax Rates

Tax rates range from 3% to 20% and depend on the tax group to which the recipient belongs, which is determined by the degree of kinship between the donor and the recipient.

• First tax group: A spouse, descendants, ancestors, stepchildren, sons-in-law, daughters-in-law, siblings, stepfather, stepmother and parents-in-law.
• Second tax group: Descendants of siblings, siblings of parents, descendants and spouses of stepchildren, spouses of siblings and siblings of spouses, spouses of the siblings of spouses, and spouses of other descendants.
• Third tax group: All other acquirers.

Tax Exemption for Immediate Family Members

Receiving a gift from a spouse, descendant, ancestor, stepchild, sibling, stepfather or stepmother is tax-exempt regardless of the value of the acquired items or property rights (so-called Group 0). However, to benefit from this exemption, the recipient must report the acquisition to tax authorities within six months of the date the gift was received. Failure to comply with these conditions, particularly missing the six-month deadline, will result in the gift being taxed according to the rules applicable to first tax group.

Tax-Free Allowance

The assignment to specific tax groups is significant in determining the amount of the tax-free allowance. The amount of tax due is calculated based on the tax base (the market value of the gifted item after deducting debts and encumbrances) in excess of the tax-free amount, which is:

• PLN36,120 – if the recipient is a person assigned to the first tax group;
• PLN27,090 – if the recipient is a person assigned to the second tax group; and
• PLN5,733 – if the recipient is a person assigned to the third tax group.

When assessing whether these thresholds have been exceeded, the total value of all assets received from the same donor during the current year and the previous five years shall be taken into account.

General Rules

Most of the rules applicable to taxation of gifts also apply to inheritances, as both are governed by the same legal framework under the Act on Inheritance and Gift Tax. In particular, this applies to classification of family members and others into tax groups, the possibility of tax exemption for close family members (so-called Group 0) provided that the acquisition of inheritance is duly reported to the tax authorities and rules for valuation of assets.

Valuation of Inherited Assets

Inherited assets are valued at their market value as at the date on which the tax obligation arises (in most cases, the date of registration of the deed of succession or the date on which the court decision confirming the acquisition of the inheritance becomes final).

Cost Carryover Basis

Poland does not have an equivalent to the US IRC Section 104 step-up in basis. When it comes to capital gains tax, heirs generally step into the shoes of the deceased regarding the cost basis (so-called historical cost carryover basis). Therefore, the cost basis is not adjusted to the fair market price of the acquired property at the date of the decedent’s death. For instance, if the deceased originally purchased a property for PLN100,000 and it was worth PLN200,000 at the time of their death, the heir who sells it for PLN250,000 will be taxed on a PLN150,000 gain.

Sale of Inherited Real Estate and Tax Exemption

However, the income from the sale of inherited real estate may be tax-free provided that the sale is not conducted as part of the seller’s business activity. This exemption applies if the sale occurs after a five-year holding period, which is calculated from the end of the calendar year in which the property was originally acquired.

Tax authorities state that the aforementioned period includes not only the period of the heir’s ownership, but also the period it was held by the deceased. In practice, it means that in some cases the heirs can sell the real estate immediately upon inheritance with the tax exemption.

Wills and Testamentary Legacies

The will remains the foundational succession tool in Poland, though it is often insufficient for complex business estates without additional mechanisms. A key instrument for targeted succession is the “legacy by vindication” (zapis windykacyjny), which enables the direct transfer of a specific asset, such as shares in companies, to a designated heir upon the testator’s death. This prevents the automatic creation of fractional co-ownership among all heirs, which would otherwise require unanimous consent for management and potentially lead to a lengthy judicial division of assets. To maintain operational oversight during the transition, testators may appoint an executor (wykonawca testamentu) to manage the estate and fulfil testamentary obligations until the formal division is complete.

Succession Management for Sole Proprietorships

For enterprises operating as sole proprietorships, Polish law provides a dedicated “succession manager” mechanism to ensure business continuity. A manager may be appointed by the entrepreneur during their lifetime or by the heirs post-mortem under specific statutory conditions. This appointment prevents the abrupt termination of the business, preserving essential operational elements such as employment contracts, commercial agreements and public law permits that would otherwise expire upon the owner’s death.

The Rise of Family Foundations

The introduction of the Polish family foundation in 2023 has transformed planning for high net worth families by providing a separate legal entity for long-term asset protection. This structure effectively separates ownership and management from the enjoyment of benefits, protecting the estate from fragmentation among multiple heirs. While designed for succession, its rapid adoption – exceeding 3,000 registrations in under three years – is also largely attributed to its significant tax efficiency. The foundation’s activities are statutorily restricted to capital accumulation and asset management (investments and disinvestments), governed by a board and the founder’s specific articles of association.

Closed-End Investment Funds

While closed-end investment funds (fundusz inwestycyjny zamknięty, FIZ) are primarily designed as investment vehicles, they are also sometimes utilised as sophisticated tools for estate planning and wealth consolidation that provide a layer of legal protection and professional management beyond simple asset ownership. This arrangement allows for combination of control by the holders of investment certificates over the most important decisions through carefully drafted fund statutes while ensuring that day-to-day operations are handled by professional fund managers from an investment fund company.

Tax Exemptions

The Polish tax system provides full exemption from inheritance and gift tax for Group 0, which includes the closest family members. As a result of the fact that inter vivos gifts do not provide any significant tax benefits compared to testamentary dispositions, many owners prefer to retain full control over their assets during their lifetime. Furthermore, for this reason, there is generally no need to create complex structures to optimise inheritance taxation.

Formal Proof of Inheritance and Ownership Rights

Regardless of whether succession is testate or intestate, a successor must formally establish legal standing before third parties including banks, portfolio companies, registration courts and commercial contractors. Until a formal confirmation of inheritance is presented (see 3.1 Intestate Succession), the exercise of asset ownership rights – including company shareholder’s rights – remains blocked. This can paralyse the management of an estate during the initial months following the owner’s death. Unlike this traditional succession, assets held by a family foundation or a closed-end investment fund ensure uninterrupted business continuity because legal ownership remains with the entity rather than the individual. This structural separation allows operational control and voting rights to remain unhindered, effectively bypassing the procedural requirement to formally prove title during the probate period.

Regulatory and Administrative Challenges for Family Foundations and Closed-End Investment Funds

While family foundations offer continuity, they are currently subject to regulatory fluidity and ongoing legislative debates regarding tax amendments. Significant practical hurdles also exist in the registration process, with waiting periods at the registration court in early 2026 often exceeding one year. Similarly, closed-end investment funds face heavy regulatory burdens, including mandatory periodic reporting to the Polish Financial Supervisory Authority and limited flexibility regarding management appointments.

Agricultural Land and Registry Delays

The inheritance of agricultural land is strictly regulated under the Act on the Shaping of the Agricultural System, granting the state a right of buyout if an heir is not an “individual farmer”. Identifying the legal status of real estate early is a critical component of risk mitigation in Polish succession planning. Additionally, prolonged registration periods in the National Court Register and Land and Mortgage Register can delay management changes or asset sales even after inheritance is confirmed.

Absence of Specific Digital Asset Regulation

Poland lacks a dedicated legal definition of “digital assets” or specialised regulations governing their succession. Instead, their legal status is determined by qualifying them into existing categories within the Civil Code, supplemented by the Consumer Rights Act’s definition of “digital content” as data produced and supplied in digital form. Digital assets are inheritable like any other assets, provided that they are of a civil-law and economic nature, are not strictly personal, and do not pass to specific individuals independently of their heir status.

Succession of Virtual Assets

Virtual assets such as cryptocurrencies and NFTs are generally classified as “other property rights” and are subject to standard succession rules. While the Anti-Money Laundering Act provides a technical definition of “virtual currency”, it has no direct application to civil succession matters.

Email accounts and social media profiles represent a complex mixture of inheritable property rights and non-inheritable personal interests protected under the Civil Code. While the economic value of high-reach social media accounts may be considered part of the estate, personal attributes such as image, name and privacy do not pass on to the heirs, who may only exert derivative protection over them based on their own right to cultivate the memory of the deceased.

Digital content such as e-books, games or cloud-stored photos is often governed by non-transferable licences. If a licence is tied to the user’s persona and expires upon death according to the provider’s terms, it is excluded from the estate.

Technical Barriers and Lack of Fiduciary Access

A primary challenge in Poland is the lack of “fiduciary access” laws that would grant executors or administrators statutory rights to digital content. Heirs often face a divide between their legal entitlement to an asset and the technical ability to access it without private keys or passwords. Furthermore, international service providers frequently deny access by citing their own terms of service or foreign privacy laws. This results in high legal uncertainty, as there is currently a scarcity of judicial precedent or legal scholarship in this area.

Practical Management and Transfer of Digital Goods

Polish law treats digital goods as standard property for succession purposes, allowing transfers via will or statutory rules. However, the law provides no specific framework to ease this transition, placing the burden of organisational management entirely on the testator. Effective methods include “testamentary instructions” (polecenie) to mandate the liquidation or transfer of accounts by an heir or executor. Furthermore, it is worth considering maintaining a “digital inventory” of passwords or depositing private keys with a notary to bypass technical access barriers, as wills become public documents after the succession opens.

Taxation and Valuation Challenges

Cryptocurrencies and other virtual assets are subject to the standard inheritance and donation tax regime like any other asset class. A significant hurdle is the market valuation of these assets at the exact time the tax obligation arises, as extreme price volatility within a single day can lead to disputes with tax authorities. Similar valuation difficulties apply to other unique virtual assets where established market benchmarks are often absent. Consequently, planning must account for the liquidity required to settle tax liabilities stemming from potentially high-value digital estates.

Legislative Outlook and Reform

Current legislative efforts in Poland, primarily driven by the need for alignment with the EU Markets in Crypto-Assets (MiCA) regulation, focus on public law oversight and supervision of service providers by the Polish Financial Supervisory Authority. There are currently no significant reforms anticipated within Polish private law to specifically address the civil law aspects of digital asset succession. Testators must therefore continue to rely on existing civil law instruments and platform-specific tools to manage their digital legacy. This lack of universal solutions necessitates a highly customised and proactive approach to digital estate planning.

Holding Structures as a Foundation for Planning

Due to the founder-led nature of the Polish economy, effective succession often requires a coherent framework to stabilise family and commercial relationships after the primary founder’s exit. Establishing a robust holding structure is a common prerequisite, as it facilitates cost optimisation and the segregation of operational risks from core fixed assets. These structures provide the organisational stability necessary to implement either direct control transfers or more complex, multi-generational governance models. By centralising ownership within a holding company, families can ensure a more streamlined transition than would be possible with fragmented individual assets.

Corporate Governance and Direct Control Transfers

For families intending to transfer full operational control over a company, strategies often rely on embedding succession mechanisms within the company’s articles of association. This approach is typically combined with a testamentary “legacy by vindication” to ensure that designated heirs step into the founder’s role immediately upon their passing. While corporate bylaws can include professional managers with veto rights to supervise heirs, these hybrid models are increasingly viewed as transitional steps. More comprehensive separation of management and ownership is generally achieved through specialised vehicles rather than corporate governance alone.

Strategic Separation via Family Foundations and Closed-End Investment Funds

A prominent trend in Polish succession planning is the strategic separation of economic benefits from management control, primarily through the use of a Polish family foundation. Historically, this separation strategy was often implemented via closed-end investment funds, which continue to be utilised by families holding exceptionally large portfolios of assets. However, foundations are increasingly preferred as they are specifically equipped with tools dedicated to family legacy building. This model satisfies the founder’s desire for long-term business integrity while providing heirs with secure distributions without the necessity of direct operational involvement.

Corporate Continuity and Procedural Hurdles

The transition of corporate rights to heirs is often hindered by the requirement to formally prove legal title. These procedural delays can block voting rights, a risk amplified in multi-partner enterprises where non-family partners may exploit the heirs’ temporary inability to act. The situation is even more critical if key assets are inherited by a minor, as significant decisions then require prior approval from a guardianship court. Succession strategies increasingly rely on family foundations to insulate governance from these probate and guardianship requirements.

Tax Neutrality and Deferral Mechanisms

The creation of holding structures and the transfer of assets to a family foundation can often be achieved on a tax-neutral basis. The family foundation model offers a strategic advantage by deferring corporate income tax on income such as dividends until funds are distributed to beneficiaries. This allows for the full reinvestment of profits into the family business, turning the foundation into a vehicle for capital accumulation.

Protecting Business Liquidity From Legitime Claims

A major legal consideration is the impact of forced heirship (legitime) claims, which can drain a company’s cash reserves. Recent 2023 amendments to the Civil Code have introduced vital protections, allowing for legitime payments to be made in instalments or reduced in justified circumstances. These changes are specifically designed to prevent the forced liquidation of family enterprises and ensure business continuity.

Non-Recognition of Trusts

Trusts as understood in common law jurisdictions are not recognised under Polish domestic law, and Poland is not a party to the Hague Trust Convention. Utilising foreign trust structures for assets subject to Polish succession law often leads to significant legal uncertainty regarding property title and taxation, as these structures may be reclassified as gifts or simple contractual obligations. Consequently, foreign trusts are generally avoided for holding Polish real estate or domestic company shares, with practitioners favouring local statutory vehicles that offer greater certainty within the civil law framework.

Foreign Foundations (Notably Liechtenstein and Austria)

Historically, foundations in jurisdictions such as Liechtenstein or Austria were the primary alternatives for Polish families seeking robust asset protection before the 2023 introduction of the domestic family foundation. Unlike common law trusts, these foreign entities possess legal personality, ensuring a higher degree of recognition and structural certainty within the Polish civil law system. While still utilised by high net worth individuals to manage international investment portfolios, their use for domestic assets has declined due to the complexity of Controlled Foreign Corporation (CFC) compliance and the more favourable tax regime offered by the Polish family foundation.

The Family Foundation as the Primary Vehicle

The Polish family foundation is the closest local equivalent to a trust and has become the primary vehicle for multi-generational wealth planning. Unlike a common law trust, the foundation possesses its own legal personality, providing a robust framework for asset protection and a clear separation of ownership from the founder’s personal estate. It allows for highly flexible governance through a management board and an assembly of beneficiaries, enabling founders to professionalise management while securing family wealth under a favourable tax regime designed for capital accumulation.

Evolution of the Family Foundation Tax Regime

The most significant development in recent years remains the introduction of the family foundation, which has now entered a phase of regulatory maturation. While the core succession-oriented essence of the foundation remains secure, there is an ongoing legislative and judicial debate regarding the tightening of tax regulations to prevent the vehicle’s use for aggressive tax optimisation. In 2026, the focus has shifted from initial registrations to operational compliance, with tax authorities increasingly scrutinising the “business justification” of asset transfers to ensure they serve genuine long-term succession goals.

Modernisation of Closed-End Investment Funds

Legislative efforts are currently underway to reduce the administrative formalities and operational costs associated with closed-end investment funds. These reforms aim to make closed-end investment funds more competitive by simplifying reporting requirements, though they are not expected to alter the fundamental legal characteristics that make them attractive for succession planning. For high net worth families, these changes may lower the barrier to entry for utilising regulated fund structures as a complement to, or an alternative to, family foundations in consolidating liquid wealth.

Digital Assets and Transparency Standards

The year 2026 is defined by ongoing legislative work to achieve the full implementation of the MiCA regulation and the DAC8 directive, aimed at increasing regulatory oversight of digital assets in Poland. These upcoming frameworks are intended to standardise the reporting of crypto-asset holdings, eventually providing heirs and tax authorities with a more stable legal basis for the valuation and transfer of digital estates. Although the implementation process introduces additional compliance burdens, the finalised rules are expected to reduce the legal uncertainty that previously complicated the inclusion of virtual currencies in succession plans.

Growing Emphasis on Family Governance

Beyond statutory changes, there is a visible trend among Polish business families towards adopting non-binding “family constitutions” to supplement legal structures. As the first generation of founders completes the transfer of assets to foundations, there is a rising awareness that legal vehicles alone cannot prevent interpersonal conflicts without a clear set of shared values and transition rules. This shift towards “soft” governance reflects a growing sophistication in the market, where the focus is increasingly on the long-term sustainability of both the business and the family legacy.

The Absence of Common Law Trusts

Poland is a civil law jurisdiction and does not recognise the legal institution of a trust or professional trustees in the common law sense. Consequently, fiduciary-like functions are distributed among specific statutory roles, including executors of wills, succession managers, and board members of family foundations. These roles are characterised by a personal nature; currently, Polish law does not permit “private trust companies” or other corporate entities to fulfil these functions, requiring instead that they be performed by natural persons with full legal capacity.

Executors of Wills

An executor’s primary role is to manage the estate and ensure the fulfilment of testamentary provisions. While no public licence is required, executors are held to a high standard of due diligence, which is further elevated for professionals such as advocates or legal advisers. They are liable to heirs and legatees for any damages resulting from improper management. Oversight is primarily judicial, as the probate court maintains the authority to dismiss an executor for “important reasons” under the Civil Code.

Succession Managers

Specifically designed for sole proprietorships, the succession manager ensures business continuity by exercising “ordinary management” over the enterprise without requiring immediate heir consent. However, actions exceeding ordinary management require the unanimous consent of the heirs or court authorisation. Managers face full liability for breaches of fiduciary duties and may be dismissed by a majority of the heirs (holding over 50% of the shares) or by a court in cases of gross negligence or misconduct.

Family Foundation Board Members

Board members of a family foundation represent a modern class of fiduciaries in Poland, tasked with preserving a family’s multi-generational legacy. Their liability towards the foundation is fault-based but carries a “presumption of fault”, meaning the board member must prove they acted diligently to avoid liability. Polish law incorporates the Business Judgement Rule, protecting board members who take justified risks within the boundaries of professional assessment. To ensure transparency, family foundations are subject to mandatory management audits every four years, or annually for larger entities.

Taxation of Family Foundation

In the absence of traditional trusts, the Polish family foundation has emerged as the definitive local vehicle for entrepreneurs, offering a structurally familiar and tax-efficient solution for securing a family legacy. As mentioned earlier, the family foundation is one of the most popular succession planning tools among Polish entrepreneurs as it offers tax benefits established to enhance long-term asset retention and reinvestment of the acquired funds.

Corporate Income Tax Exemption

Family foundations generally benefit from an exemption from corporation income tax. For example, income derived from dividends, interest or the disposal of shares is typically tax-free. However, this exemption applies only to activities explicitly permitted under the Act on Family Foundations, which include disposal of assets, unless such property was acquired solely for the purpose of further disposal or purchase and sale of securities. Any engagement in activities beyond the statutory scope is subject to a 25% corporation tax.

Distribution of Assets to Beneficiaries

Distributions of benefits and assets from a family foundation to its beneficiaries is subject to 15% corporate income tax, payable by the family foundation itself. The personal income tax rate depends on the relationship between the founder and the beneficiary. For instance, persons included in the zero tax group, including among others the founder’s spouse, children or parents, can receive distributions from a family foundation tax-free, since the rate is 0%. For beneficiaries who are not immediate family members of the founder, the tax rate on distributions from a family foundation is either 10% or 15%.

Unmarried Partners and Same-Sex Couples

Polish law does not recognise civil unions or same-sex marriages, treating such partners as “legal strangers” for inheritance and taxation. Consequently, non-formalised partners lack statutory inheritance rights and cannot claim legitime. Succession for these couples relies solely on wills, though they remain subject to the highest tax bracket (Group III), with rates reaching nearly 20% of the estate’s value.

Children Born Out of Wedlock and Adoption

Children born out of wedlock and adopted children enjoy identical inheritance and tax rights to biological children within a marriage, provided that parentage is legally established. Both groups qualify for the full “Group 0” tax exemption.

Surrogacy

Surrogacy lacks legal recognition in Poland; the legal mother is always the woman who gave birth to the child. This may prevent “intended parents” and the child from having automatic inheritance rights unless a formal adoption or paternity recognition is completed. Without these measures, children born via surrogacy remain legally detached from the intended estate, necessitating proactive legal intervention and bespoke testamentary solutions to secure their succession.

Posthumously Conceived Children

Under the “nasciturus” principle, a child already conceived before a parent’s death inherits provided that they are born alive, which generally includes embryos implanted shortly after the death. Conversely, children resulting from fertilisation occurring after the father’s death lack statutory inheritance rights under current judicial consensus. This distinction requires families using assisted reproductive technologies to utilise specific testamentary provisions to ensure future provision for posthumously fertilised children.

Foreign Documents and the Public Policy Clause

While foreign official documents generally enjoy evidentiary value equal to Polish documents, their substantive effects in succession are often limited by the “public policy clause” (Article 7 of the Private International Law Act). Polish courts and tax authorities may refuse to recognise non-traditional family relationships established abroad if their effects are deemed contrary to the fundamental principles of the Polish legal order. This barrier frequently results in the application of Polish domestic law instead of the foreign law originally chosen, often excluding non-traditional partners from statutory inheritance or preferential tax treatment.

The public policy clause is consistently applied to deny recognition of same-sex marriages, polygamy, and marriages involving minors, as these are viewed as incompatible with the Polish constitutional framework. Consequently, heirs from non-traditional families face high legal risks and must rely on precise testamentary planning to bypass statutory limitations, though such measures cannot currently bridge the gap in tax exemptions.

Impact of European Jurisprudence and Transcription

Recent CJEU jurisprudence, notably case C-713/23, has initiated a shift by requiring Poland to allow the transcription of foreign same-sex marriage certificates into the national civil status register. As of early 2026, a draft regulation is under consultation to introduce gender-neutral templates – replacing “husband/wife” with “first spouse/second spouse” – to facilitate these administrative registrations. While these changes are currently technical in nature, they may provide significant future arguments against the “public policy” defence, though substantive inheritance and tax benefits remain under the exclusive purview of domestic courts and tax bodies.

Litigation Risks and Non-Economic Rights

Beyond financial inheritance, non-traditional partners face significant practical hurdles regarding non-economic rights, such as burial decisions and access to medical records, where biological relatives often hold statutory priority. In the absence of formal recognition, these post-mortem rights can become the first stage of a broader legal conflict between the surviving partner and the biological heirs. Effective succession planning in Poland must therefore include specific mandates and authorisations to ensure the survivor’s standing in these sensitive matters, thereby mitigating the risk of immediate post-mortem litigation.

The Global Reach of Polish Tax Authorities

When planning succession and intergenerational wealth transfers, it is important to bear in mind that Poland asserts broad informational and taxing rights. As a general rule, any acquisition of assets or property rights by way of inheritance or gift triggers liability under Polish inheritance and gift tax if the recipient holds Polish citizenship or has a permanent residence in Poland. This obligation has a worldwide scope, meaning that, in principle, assets located anywhere in the world fall within the scope of taxation and reporting requirements.

The Critical Role of Compliance in Securing Tax Exemptions

Although this may initially appear burdensome, the Polish system provides significant tax preferences and exemptions, provided that the inheritance or gift is duly reported to the competent tax office within the statutory deadline. In practice, timely compliance can be challenging where asset structures are extensive and geographically dispersed, increasing the complexity of reporting. By contrast, when succession is structured through a vehicle such as a family foundation, a holding company or an investment fund, informational obligations can be substantially reduced, mitigating the risk of missing reporting deadlines and inadvertently losing access to available tax exemptions.