Question 1

What is a keren hishtalmut (study fund)?

Accepted Answer

A keren hishtalmut (study fund) is a savings vehicle available to employed and self-employed individuals in Israel, funded by joint employer-employee contributions. After a 6-year maturation period, withdrawals are tax-exempt. It is widely used as a long-term savings and investment instrument, particularly in the public sector and high-tech industries.

Question 2

What happens to a keren hishtalmut when the account holder dies?

Accepted Answer

On death, the keren hishtalmut balance passes outside the estate — directly to the beneficiary named in the fund account, bypassing both the will and the statutory succession order. If no beneficiary is named, the balance may be paid to the estate and distributed according to the will or succession law. Naming beneficiaries on all financial accounts is strongly advisable.

Question 3

Can an heir claim a keren hishtalmut from a deceased person's estate?

Accepted Answer

If a beneficiary is named, the fund pays directly to that person — heirs cannot claim it. If no beneficiary is named, the balance joins the estate and is distributed according to the succession order or the will. The fund administrator should be notified promptly after the account holder's death.

Question 4

Is a keren hishtalmut included in probate proceedings?

Accepted Answer

Where no beneficiary is named, the keren hishtalmut balance is included in the estate and is subject to the probate or succession order process. Where a beneficiary is named, it passes directly and is not subject to probate — it does not appear in the estate declaration.

Question 5

What tax applies to a keren hishtalmut inherited from a deceased person?

Accepted Answer

Israel does not impose inheritance tax. A keren hishtalmut balance received by a named beneficiary on the death of the account holder is generally not subject to income tax at the time of receipt — however, future withdrawals may attract tax depending on the fund's maturation status at the date of death. Professional advice is recommended.

Question 6

My parent died with a keren hishtalmut — how do I access it?

Accepted Answer

If you are the named beneficiary, contact the fund administrator with a certified death certificate and your identity documents. If no beneficiary was named, a succession order or probate order is required. Adv. Elmaliach handles the full estate administration process, including identification and collection of all financial assets.

Study Fund (Keren Hishtalmut) Inheritance in Israel

Keren Hishtalmut on Death — Key Points

Frequently Asked Questions

Estate Administration Question?