Probate law
Probate law / Erbrecht
August 22, 2024
German probate law (or estate law) regulates what happens to a person's assets after their death. It provides clear guidelines and provisions to ensure that assets are distributed fairly and disputes between heirs are minimised.
Legal succession under German estate law
Probate or estate refers to the totality of all legal relationships that pass to one or more persons (heirs) as a whole in the event of succession. German inheritance law recognises different types of inheritance.
If the testator has not made a will or an contractual will, the statutory succession, Sections 1922 et seq. BGB, regulates who receives how much of the estate. The degree of kinship is decisive for this. Spouses are always entitled to inherit. The other degrees of kinship are categorised into orders.
Heirs of the first order: This includes the descendants of the deceased, i.e. children and their descendants.
Children of the deceased are relatives of the 1st order. This also includes unborn, adopted and illegitimate children. They have an inheritance claim. If a child is already deceased, the inheritance claim passes to the grandchildren.
Heirs of the second order: Parents of the deceased and their descendants.
If the deceased had no relatives of the first order, relatives of the second order, such as parents, siblings, nephews and nieces, are entitled to inherit.
Heirs of the third order: Grandparents of the deceased and their descendants.
Lastly, grandparents, uncles and aunts as well as cousins are legally entitled to inherit.
Spouses have a special status and inherit a certain share of the estate alongside their relatives, depending on the matrimonial property regime. It should be noted that the spouse or registered partner only receives a share of the inheritance if they are not the sole heirs. Unmarried partners only inherit if they were included in the last will. The same applies to unrelated persons, such as stepchildren or in-laws. Former spouses are not entitled to inherit after divorce. In the event of inheritance, the joint (divorced) child inherits the inheritance entitlement.
Will and contractual will
Anyone who wishes to deviate from the statutory order of succession and dispose of their assets in another way must draw up a will. Wills and contractual wills come into consideration. In this way, the testator has the opportunity to make dispositions in their will that also take into account a person who is not related to them by blood or marriage. The testator can also make a bequest to a specific person.
It is important to note that as an heir you assume the rights and obligations of the testator in accordance with § 1922, 1967 BGB.
Proper planning
Statutory succession law does not always correspond to the wishes of the testator, which is why German estate law provides for further options.
The best-known form of disposition upon death is the will. The law provides for different options. A handwritten will within the meaning of Section 2247 of the German Civil Code (BGB), also known as a personal will, is a document written and signed by the testator.
There is also the notarised will in accordance with Section 2232 BGB. The testator can declare their last will before a notary or give them a document containing the testator's declaration.
Spouses have the option of drawing up a joint will in accordance with Section 2267 BGB. The Berlin will is a special form of joint will in which the spouses appoint each other as heirs and at the same time stipulate that after the death of the longest-living person, the estate of both parties is to go to a third party, usually the children.
The law places formal requirements on the will. It must be handwritten, legible and signed by hand at the end of the document, preferably with the full name.
The will should also state the date and place where it was made and the entire document should be numbered.
A will can be adapted to the marital status and individual life situation and leaves room for appropriate arrangements in the event of inheritance. A will can be useful for unmarried partners. Without such protection, they have no claim to the estate in the event of inheritance.
The testator can also make a bequest in accordance with Section 1939 BGB. A legacy is not a will. These terms are often confused or equated in common parlance. With a legacy, the testator provides a specific person with a specific object, such as jewellery or a sum of money from their estate in their will or inheritance contract. As the beneficiary, you merely have a claim that must be actively asserted against the recipient, as you do not immediately become a beneficiary upon the death of the deceased. The beneficiary does not necessarily have to be the heir.
A less well-known type of disposition of property upon death is the contract of inheritance in accordance with Section 1941 BGB. An contract of inheritance is a contract that is concluded between the testator and one or more persons and is valid after death. It must be notarised in order to be valid.
The testator can also tie their last will to conditions or add obligations. If the testator does not wish to bequeath without consideration, he or she can tie the heir's receipt to a fixed condition. The heir only receives his or her share once this condition has been fulfilled. Such a condition can be, for example, a business takeover or care.
As the testator can freely dispose of his assets, he also has the option of disinheriting a person in accordance with Section 1938 BGB. Disinheritance is understood to mean the exclusion from the legal succession by the testator. There is no obligation to justify disinheritance in the will. However, the testator must bear this in mind: Disinheritance does not necessarily mean that the heir receives no inheritance at all.
A certain group of persons close to the testator can demand the compulsory portion from the heir despite disinheritance, Section 2303 BGB. The compulsory portion ensures that the disinherited relative receives a share of the deceased's estate despite being excluded from the statutory succession and guarantees a minimum share.
Claims to a compulsory share claim
German inheritance law protects close relatives through compulsory share claims in the event of disinheritance. Children, spouses and parents of the deceased may be entitled to the compulsory share. The compulsory portion amounts to half of the statutory inheritance share and is a monetary claim against the heirs.
The right to a compulsory share pursuant to Section 2314 BGB arises in accordance with Section 2317 BGB on the date of inheritance.
The person entitled to the compulsory share has the right to information from the heir, which enables them to quantify their compulsory share.
In addition to the right to a compulsory share, the right to a supplementary compulsory share must also be examined. Anyone wishing to make a gift to their heirs during their lifetime can do so by making a donation. These gifts are added to the estate, taking into account the reduction in accordance with Section 2325 (3) BGB when calculating the compulsory portion.
The compulsory share can only be withdrawn under the strict conditions of Section 2333 BGB.
However, the testator and the person entitled to the compulsory share can agree to waive the compulsory share during their lifetime in accordance with Section 2346 (1) BGB. It is not uncommon to waive one's compulsory portion in exchange for a settlement in order to relieve the heir of later burdens.
The right to a compulsory share expires within three years. The period begins with knowledge of the inheritance and the disinheritance.
Inheritance tax under German inheritance law
Inheritance tax is payable when assets are transferred to the heirs. The amount of tax depends on the value of the inheritance and the degree of kinship to the deceased.
There are tax-free amounts that vary depending on the degree of relationship:
- 500,000 euros for spouses and registered civil partners,
- 400,000 euros for children and stepchildren,
- 400,000 euros for grandchildren whose parents are already deceased, great-grandchildren,
- parents and grandparents 100,000 euros and
- all other heirs 20,000 euros.
Co-heirs and estate administration
If the deceased is inherited by several persons, a community of heirs is created within the meaning of Section 2032 BGB. It is created automatically with the inheritance without the need for a separate legal act of formation. This community administers the estate jointly and must decide unanimously on its distribution.
If disputes arise, an estate administrator can be appointed to ensure proper administration.
As it is neither a company nor a community of fractions, the co-heir status cannot be cancelled. There are options for leaving the community of heirs, such as selling the co-heir's share or renouncing the inheritance. The community of heirs is a community of joint owners. The task of the community is to distribute the estate. Each member receives their share, the amount of which depends on the degree of kinship or the inheritance quota in the will. The co-heirs make all decisions regarding the estate unanimously and jointly.
In the case of a community of heirs, each individual co-heir is entitled to apply for a joint certificate of inheritance for the entire community of heirs. As a rule, all co-heirs contribute to the costs of the certificate of inheritance and each receives one or more copies.
The community is dissolved when the estate is divided. This is referred to as the settlement, § 2042 Para. 1 BGB. The community of heirs must always bear in mind its liability for the debts of the deceased. It can be liable both with the estate and with its own assets. However, there are ways of limiting liability to the estate.
In the event of conflicts within a community of heirs, there is the possibility of a legal dispute in the form of an action for distribution of the estate. This is usually the last option for resolving a disputed community of heirs and dividing the estate among the disputing heirs. The disputes often result from the lack of a division order by the testator and the uncertainty of the co-heirs as to how the estate should be divided.
The certificate of inheritance
If you have become an heir, you can apply for a certificate of inheritance. The certificate of inheritance is a document issued by the probate court. It shows who is the heir of a particular person. With the certificate of inheritance, the heir can identify themselves as the heir in legal and business transactions. A certificate of inheritance is particularly important if succession by will or contract of inheritance is not possible because the testator has not made provisions.
There are different types of certificate of inheritance. A sole certificate of inheritance is issued for one person. If there are several heirs, a joint certificate of inheritance is usually issued, which contains the names of all heirs and the amount of their inheritance shares.
However, it is a prerequisite that all heirs are known and have accepted the inheritance. The heirs of a community of heirs have the option of applying to the probate court for a partial certificate of inheritance.
The certificate of inheritance is applied for at the competent probate court. As a rule, the local court in whose district the deceased had their last habitual residence has jurisdiction. The heir does not have to submit the application for the certificate of inheritance themselves, but can also have it submitted by a lawyer or notary. An executor, estate administrator or estate insolvency administrator can also apply for a certificate of inheritance. If the succession is governed by foreign law, a certificate of inheritance can also be issued. The prerequisite is that at least part of the estate is located in Germany.
Renunciation of Inheritance
There are many reasons why a person may not wish to accept the inheritance. The most common case is the testator's debts.
By renouncing the inheritance within the meaning of Section 1942 BGB, the heir can dispose of the inheritance. If the heir has accepted the inheritance, it is no longer possible to waive the inheritance in accordance with Section 1943 BGB. Acceptance can be express or implied, i.e. by conclusive behaviour.
A six-week period applies for the waiver in accordance with Section 1944 (1) BGB. It is not possible to extend this period. Nor can the probate court grant reinstatement to the previous status. The time limit begins when the heir becomes aware of the inheritance and the reason for the appeal. The heir regularly learns of the inheritance through death. The grounds for appeal are understood to be knowledge of the specific facts from which the legal consequences of the appeal arise.
How can we help you?
German inheritance law offers comprehensive regulations to organise the distribution of the estate and protect the rights of the heirs. By drawing up a will or inheritance contract, individual wishes can be realised and clarity created. Rights to a compulsory share ensure that close relatives are not left empty-handed. In complex inheritance matters, legal advice can help to find the best solutions and utilise tax advantages. Are you looking for legal advice or representation? Get in touch with us.