Inheritance law

Inheritance law

Inheritance law includes, among other things, the areas of anticipated succession (inheritance contracts, gifts), the drafting of contracts and wills, execution of wills, administration of estates, insolvency of estates and guardianship of estates, as well as tax-related aspects of inheritance law.

Choosing the right form of will requires comprehensive knowledge and sensitivity: should it be an individual will, a joint will or a contract of inheritance? The instruments of inheritance law must also be chosen with care: the establishment of an inheritance, pre- and post-inheritance, bequests or the execution of a will. We are your contact for all these questions and decisions.

Also relevant in practice is the claim to a compulsory portion. This applies not only to the heirs, who have to pay it out, but also to the beneficiary himself, who often has to legally enforce his compulsory portion because the heirs refuse to provide the relevant information. Family disputes are thus not infrequently pre-programmed.

Inheritance law therefore requires not only legal expertise, but also a certain degree of empathy. Inheritance and inheritance are more than just legal matters. In addition to legal questions concerning inheritance law, inheritance almost always involves emotions and family sensitivities.

Our experienced attorneys are therefore not only at your side on a legal level, but also act as a link between you and your family members.

Legal inheritance

"The dead inherits the living" (Sachsenspiegel 13th century). Under "inherits" was understood at his time "inherited". This is also how § 1922 Par. 1 BGB formulates it: "With the death of a person (inheritance), his or her property (inheritance) passes as a whole to one or more other persons (heirs)". Several heirs therefore form a community of heirs.

Legal succession occurs when the decedent did not leave a testamentary disposition, i.e. an effective will or contract of inheritance. Legal heirs are, on the one hand, the decedent's blood relatives, on the other hand, his or her spouse, also the registered civil partner equivalent to the spouse, but not a - non-registered - cohabitant or civil partner.

With regard to blood relatives, an order principle applies: heirs of the first order are the descendants, i.e. the children and, if they are predeceased, the children's children; heirs of the second order are the parents or, if already deceased, their children, i.e. the siblings of the deceased; heirs of the third order are the grandparents or, if already deceased, their descendants, i.e. in particular the nephews of the deceased. (§§, 1924, 1925,1926 BGB). The law provides for other orders. A relative of a preceding order displaces the relatives of the following order, i.e. the children, parents or siblings of the testator and immediately (§ 1930 BGB).

In addition to his blood relatives, if the testator is married, his spouse, also the registered partner according to § 1931 BGB. The amount of his or her share of the inheritance depends on whether the spouses - as is almost always the case - lived in the legal matrimonial property regime of the community of accrued gains, and whether the spouse competes with children, parents, siblings or grandparents of the deceased.

If the spouse of the deceased meets with legal heirs, the surviving spouse inherits a quarter in addition to heirs of the 1st order in accordance with § 1931 para. 1 BGB, in addition to heirs of the 2nd order, parents or siblings and still living grandparents, half, otherwise he receives the entire inheritance.

In addition to his share of the inheritance, if the spouses, as is almost always the case, have lived in the legal matrimonial property regime of the community of accrued gains according to § 1363 BGB, the spouse receives the equalization of accrued gains according to § 1371 BGB, a further quarter as a lump sum.

This also applies if there had actually been no claim to equalization of gains against the decedent, even if the decedent had conversely had claims to equalization of gains against the surviving spouse.

If the testator is not or no longer married, his relatives inherit in the order of priority of § 1924 ff. BGB; if, for example, the testator has only one child, this child displaces all other relatives from the succession.

Testamentary succession

Testamentary successionoccurs when the testator regulates the succession by a testamentary disposition (will, contract of inheritance) and consequently inheritance is not according to the rules of intestate succession.

Last will ( so-called "Berliner Testament")

By means of a will, the testator can, in principle, freely dispose of his or her assets inter vivos and thus also by reason of death - in deviation from the statutory succession.

Pursuant to Section 2231 of the German Civil Code, a will may be drawn up either for recording by a notary or "in person" by the testator. The testator may also make a will by inheritance contract pursuant to Section 2274 of the German Civil Code. This must be in notarial form in accordance with § 2276 BGB.

In his will, the testator designates his heir or heirs. The appointment should be made in fractions, e.g. " in one quarter" or "in equal parts" not in percentages and overall care should be taken to ensure that the inheritance shares reach 100%.

In addition to the appointment of legatees, the testator may also stipulate legacies, conditions and division orders and execution of wills in his testamentary disposition.

The legatee is bequeathed individual estate items or rights, e.g. a sum of money, a plot of land or a usufructuary right. The legatee does not become a co-heir but has the right to demand the return of the bequeathed object from the heir.

Conditions are certain instructions of the testator, for example, regarding his funeral or the non-sale of an estate property, etc.

With the division order, the testator determines how the estate objects are to be dealt with by way of inheritance division, i.e. which heir is to receive which estate objects. The executor of the will is to enforce the last will and testament of the testator. In particular, he or she is to effect the distribution of the estate, if necessary.

Spouses can, according to § 2265 ff. BGB (German Civil Code), spouses can make a joint will, either in notarial form or in private writing.

Spouses regularly appoint each other reciprocally as heirs (§§ 2269, 2270 BGB, so-called Berlin will). In the case of a handwritten will, it is sufficient for one of the spouses to write the will "from A-Z" in his or her own hand and for the other spouse to sign it with the addition "this is also my last will and testament". Place and date should not be missing.

A reciprocal will can only be revoked during the lifetime of both spouses by notarial declaration to the other spouse (§ 2271 BGB). In this case, therefore, no spouse can make a different will "behind the other's back". After the death of the longer-lived spouse, the surviving spouse can no longer make other dispositions by reason of death unless this right has been expressly granted to him or her in the will.

In principle, however, he or she remains entitled to dispose of the estate while alive. However, if he or she makes a gift of items of the estate, the donee may be obliged to surrender them (§§ 2286 et seq. of the Civil Code).

As a rule, in the case of a joint, mutual and reciprocal will, the spouses appoint each other as sole heirs, and their child(ren), who are not necessarily joint heirs, as the so-called final heirs. After the death of the first to die, the assets of both spouses are united, and this is received by the final heir.

On the other hand, the spouses can also decide that the surviving spouse will not be a full heir, but only a pre-heir; in this case, the child or children of the first deceased are regularly appointed as subsequent heirs, and only the child or children of the second deceased are appointed as heirs. After the death of the second deceased, the subsequent heir receives the assets of the first deceased, and the children of the second deceased receive only his or her assets. This form is often chosen when spouses do not have (only) children in common, in order to "keep the assets of the spouses in the family" respectively.

If the surviving spouse is not expressly designated as an exempt prior heir, he or she must keep the inherited assets separate from his or her own assets; in the event of the sale of estate assets, the acquisition takes the place of the sold item's proceeds and substitute acquisition; he or she cannot dispose of real estate assets.

In principle, the non-exempt pre-heir can only manage and use the inherited property. Therefore, as a rule, exempt prior inheritance is stipulated in the will. As a rule, the spouses stipulate that in the event that a final heir or subsequent heir demands his or her compulsory share after the death of the first to die, he or she will receive only his or her compulsory share even after the death of the second to die (so-called penalty clause).

The testator can also arrange for inheritance before and after death in an individual will, i.e. a non-joint will, with his or her spouse. The arrangement of pre- and post-inheritance becomes invalid after 30 years (§ 2109 BGB).

Inheritance contract

Also by inheritance contract the testator can dispose of his property inter vivos and thus also by reason of death - deviating from the legal succession - in principle freely.

In a contract of inheritance, the testator can agree with third parties, including non-relatives, in notarized form on inheritance law and also on regulations going beyond this, which can contain contractual and also non-contractual regulations, i.e. regulations concerning only one of the contracting parties. However, they must in any case contain a provision binding on both parties.

Inheritance contracts as well as joint wills can be part of marriage contracts. They often refer to partnership agreements if one of the contracting parties is, for example, a co-partner in a company or a medical practice. In this case, obligations under the partnership agreement, such as retirement, succession and severance provisions, must be taken into account. Tax consequences may also have to be considered in the event of the contractual heir leaving a company (disclosure of hidden reserves).

Ineffectiveness of testamentary dispositions

A will can be revoked by testamentary disposition (exception: joint alternate will after the death of the first to die). The withdrawal of a notarial but not a private will from official custody is deemed to be a revocation (§ 2256 Para. 1 and 3 BGB). The withdrawal of an inheritance contract from official custody is also deemed to be revocation if it contains only dispositions on death (§ 2300 BGB), otherwise §§ 2290 ff BGB apply.

If the spouse has been provided for, his or her inheritance becomes invalid in the event of divorce of the marriage or if the testator has applied for divorce or consented to it. This also applies to intestate succession (Sections 2077, 1931 of the Civil Code).

A testamentary disposition is voidable if the testator erred in making it or was threatened in making it (§ 2078) or if he or she passed over a beneficiary of the compulsory portion who was present at the time of his or her death, even if he or she was only newly entitled to it. This is particularly the case with joint wills or inheritance contracts if the testator had remarried. In this case, the new spouse is entitled to a compulsory share and can contest the will in accordance with § 2081 BGB. The right of contestation can be avoided if it is clear from the testamentary disposition that the testator would not have disposed differently even if he had known of this possibility of contestation.

Acceptance and disclaimer of the inheritance

The heir may accept the inheritance by making an express declaration to the probate court as soon as the succession has occurred (Section 1946 of the Civil Code).

The heir must declare the disclaimer of the inheritance within six weeks for the record of the probate court or by notarial declaration. The period begins when the heir has knowledge of the accrual of the inheritance and the reason for the appeal. In the event that a will or contract of inheritance exists, however, only when the probate court has notified him of this disposition by reason of death (§§ 1944, 1945 BGB).

If the heir disclaims the inheritance, he or she does not become the heir and is not liable for the estate's debts.

If the heir does nothing within the deadline for disclaiming the inheritance, he or she has accepted the inheritance.

If there are several heirs, they form a community of heirs.

Certificate of inheritance

In order to legitimize himself/herself as an heir to third parties, the heir generally requires a certificate of inheritance, also in order to effect the transfer of an estate property in the land register, unless there is a notarized will.

Several heirs receive only one joint certificate of inheritance.

If there is a dispute about the amount of the inheritance shares or the status of the inheritance, this can be asserted in the inheritance certificate procedure, but a substantive legal clarification may have to be brought before the regional court by way of an action. An incorrect certificate of inheritance will be withdrawn by the probate court.

Compulsory portion claim

Claims to a compulsory portion may exist if a legal heir is disinherited by testamentary disposition or does not become an heir by disclaimer.

Disinheritance by testamentary disposition may occur expressly or by non-mention but complete substitution of one or more other heirs to the full estate.

Those entitled to a compulsory share are, according to § 2303 ff. BGB, the descendants, the parents and the spouse of the deceased. Siblings are therefore not entitled to a compulsory share, nor are parents if there are descendants.

The compulsory portion is a claim in money against the estate, i.e. to a certain extent a legal legacy. The amount of the compulsory portion is half the value of the legal share of the inheritance (§ 2303, para. 1, sentence 2 BGB).

If an heir entitled to a compulsory share (descendant or parents) does not become heir as a result of his or her disclaimer, he or she is only entitled to a compulsory share if the disclaimer is made as a result of testamentary restrictions or burdens on his or her person (§ 2306 BGB), for example because the testator has appointed a successor heir, an executor or has made partition orders.

In contrast, the surviving spouse can reject the inheritance without further ado, i.e. even without such restrictions, and demand the compulsory portion. However, he or she can then also assert an actual claim for equalisation of gains which may arise as a result of the death of his or her spouse (termination of the matrimonial property regime of the community of gains), in addition to the, then small, compulsory portion. In order to achieve this, he must - according to the current legal situation - actually renounce the inheritance.

This is "worthwhile" if the deceased's assets at the time of his death are more or less identical to his accrued gains and the surviving spouse has earned no or only a very small accrued gain. Then his claim to equalisation of accrued gains may already amount to approximately 50 % of the estate assets. In addition, since there is now no lump-sum increase in his share of the inheritance according to § 1371 BGB, he can still claim the "small" compulsory share, if there are several children, i.e. 1/8 of the value of the remaining testator's assets.

However, this "compulsion to disclaim" is likely to cease due to a planned amendment of the law. According to this amendment, in future the surviving spouse will be able to claim the actually accrued gain in addition to his or her inheritance claim pursuant to § 1371 BGB - i.e. without disclaiming the inheritance.

Finally, it is conceivable that a beneficiary of a compulsory share is appointed heir by testamentary disposition, but his share of the inheritance is lower in value than his compulsory share. In this case, the beneficiary can - without disclaiming the inheritance - demand from the co-heirs as a compulsory portion the value of the amount short of half of his or her statutory share of the inheritance, in accordance with § 2305 BGB.

Since the beneficiary of the compulsory portion is not a co-heir, he has no access to the estate, not even to the deeds of the deceased, and does not know the deceased and thus the amount of his claim to the compulsory portion.

Pursuant to section 2014 of the Civil Code, the beneficiary therefore has a claim against the heir for information about the estate. This has to be done by submitting an inventory to be drawn up by the heir himself, in which all objects of the estate have to be included, stating the value or the value-forming factors. If necessary, for example in the case of real estate, the submission of an expert opinion on the market value may be requested.

The estate inventory must also contain all gifts made by the testator to his or her own spouse during the entire marriage, otherwise to third parties in the last ten years before the inheritance. This with regard to the amount and date of these gratuitous gifts.

The beneficiary of the compulsory portion may demand that the list of estates be submitted to a notary and that he or she be present at the submission. If the inventory of the estate is obviously incomplete, it may be supplemented or, if there are doubts as to its accuracy, an affidavit may be submitted. As a rule, the heir will declare the inheritance costs as well as inheritance liabilities.

The claim to the compulsory portion results from the value of the net estate; any legacies are generally not to be taken into account. Gifts made by the testator free of charge, also to the beneficiary of the compulsory portion himself, are also to be taken into account as a claim to supplement the compulsory portion pursuant to § 2325 BGB. The value of these gifts is to be taken into account according to the so-called lower of cost or market principle either at the time of the gift or at the time of the testator's death. The loss of purchasing power until the death of the testator is to be taken into account, i.e. the value of such a gift is to be adjusted for the loss of purchasing power, i.e. to be increased (indexed).

However, the value of the gift is to be reduced by 10% for each full year that has passed since the gift was made, i.e. it is no longer to be taken into account after 10 years. However, this does not usually apply if the gift was made for the benefit of the surviving spouse. For the surviving spouse, the period does not begin before the dissolution of the marriage, i.e., if the marriage was not divorced beforehand, with the death of the testator. The claim for information, as well as the claim for payment, can be enforced in court, usually by a combination of an action for information and an action for payment.

The claims for supplementary payments pursuant to § 2325 BGB are not only available to the beneficiary of the compulsory portion, but also to the heir who is de facto disinherited in whole or in part due to such gifts, up to the amount of the calculated compulsory portion.

The situation is similar if, in the case of an inheritance contract or joint will, the heir has disposed of objects of the estate free of charge during his or her lifetime. In this case, according to section 2287 of the Civil Code, the donee must return the gift unless the heir had respectable interests during his lifetime.

Liability of heirs and inheritance taxes

The heir or heirs are liable for all obligations of the deceased according to § 1967 BGB as well as for the funeral costs § 1968 BGB even if third parties should have arranged the funeral.

Furthermore, according to § 1969 BGB, they would have to maintain the family members who lived with the deceased for the first 30 days after the death.

In order to achieve clarity about the debts of the deceased, the heirs - the executor - can request the creditors of the estate to file their claims by way of the bailment procedure.

If it turns out that the estate is overindebted, administration of the estate or insolvency of the estate can be applied for (§ 1975 BGB). In the event that the order for administration of the estate or the opening of insolvency proceedings is not feasible due to lack of assets or has been revoked, the so-called plea of insufficiency can be raised by the heirs pursuant to §§ 1990, 1991 BGB. In this case, the heir is obliged to surrender the estate in its entirety to the creditors for satisfaction. If the over-indebtedness is only due to the arrangement of legacies or conditions, the heir may also invoke §§ 1990, 1191 against the legatees.

If it is uncertain whether the estate could be overindebted, an inventory of the estate can be drawn up and deposited with the probate court (§ 1993 ff. BGB). This has the effect that the otherwise unlimited liability of the heirs does not initially arise. Through these measures, the heir can achieve that he/she is only liable with the estate, after the division of the estate according to his/her share of the inheritance.

The heir, legatee and beneficiary of the compulsory portion must file an inheritance tax return with the tax office.

They are personally liable for the tax due.

The tax allowances for the surviving spouse are currently € 500,000.00, for the children € 400,000.00 each. Owner-occupied real estate remains exempt from inheritance and gift tax if it continues to be owner-occupied by an heir for a period of 10 years or can no longer be owner-occupied for compelling (health) reasons.

It may therefore be advisable to make multiple use of these tax-free amounts by making lifetime gifts. This is possible every 10 years, i.e. if a gift was made 10 years before death, it is no longer taken into account as an increase in the estate. For this reason, the inheritance tax forms only ask for gifts that were made in the last 10 years before the deceased's death.

In particular, if acquisition transactions are part of the estate, consideration should be given to appropriate succession arrangements during the lifetime of the deceased, for example by granting usufructuary rights in favour of the bequeathing future testator.