Wills and succession

There cannot be many other domains where finances and feelings are more closely linked than in the area of succession, wills and contracts of inheritance. In case of succession there are numerous issues which may give rise to disputes between family members or within a community of heirs. So for those with property and assets to leave, it makes sense to look into proper estate planning during their lifetime and make a testamentary disposition setting out their individual wishes for succession.

By ordering that the will be executed, the testator can stipulate that the executor must distribute legacies as instructed and administer the estate in accordance with the testator’s wishes. The executor must also distribute statutory portions of the inheritance to the testator's spouse and any descendants.

Upon the death of a person it may be useful for heirs to seek advice from an expert specialising in succession law – if there are uncertainties around a share in the estate, a right to inheritance or a certificate of inheritance, for example, or if there is inheritance tax to pay.

Overview

Testators: Know the specifics of succession law and making a will

In Germany, there are two essentially equivalent ways to organise succession of an estate: with a will, or with a contract of inheritance. If there is no will or contract of inheritance, the rules of intestate succession apply. In this case, the estate passes to the deceased’s children and spouse or partner. If there are no children, other relatives take their place depending on the degree of relationship.

As a testator, you may use a will or contract of inheritance to make arrangements differing from the rules of intestate succession. This is often done by spouses who want to appoint each other their sole heir, for example. A testamentary disposition also allows you to leave individual assets to a specific person, regardless of whether he or she is an heir to your estate. A will or contract of inheritance is also advisable if you have significant assets or even want to make arrangements for succession of your company.

The important thing here is: a will or contract of inheritance does not exclude claims to a compulsory portion of the estate. Individuals who are entitled to a compulsory share have a monetary claim against the testamentary heirs in the amount of half of the value of their portion in the event of intestacy. Parties entitled to a compulsory share of your estate include your spouse and your children and grandchildren. However, it is possible to use strategic estate planning to reduce claims to compulsory shares. There are various options that can be applied strategically alongside a will.

The German Civil Code (Bürgerliches Gesetzbuch, BGB) sets out stringent formal requirements for wills: A will must either be a holographic will, or be recorded by a notary. A holographic will must be written and signed entirely in the testator’s own hand. A contract of inheritance may only be recorded by a notary.

Heirs: liability risks, tax burdens and certificates of inheritance

As an heir – whether by way of intestate succession or on the basis of a will or contract of inheritance – you should first determine whether you want to accept the inheritance. This question is mainly relevant if the estate is at risk of overindebtedness.

If you decide to accept the inheritance, you should clarify what financial obligations are associated with it and how you – if there are any inherited debts – can avoid liability risks. There is also the question of whether you are required to pay tax on your inheritance, and if so how much. The amount of inheritance tax payable is determined by the value of the estate and the relationship between the testator and you as heir. Every heir has a personal tax-free allowance – EUR 500,000 for the testator’s spouse and EUR 400,000 for a child, for example.

To prove your right of inheritance, you usually need a specific certificate (Erbschein) which can be obtained by applying to the probate court and is needed if the estate includes real estate that you want to transfer into your name, for example. As well as applying to the probate court for a certificate of inheritance, you must give a declaration in lieu of an oath regarding certain information set out in the Civil Code. This declaration must be recorded by the probate court or a notary.

Expertise

Estate planning with Schultze & Braun

At Schultze & Braun, we have advised and supported numerous testators and heirs on the subject of estate planning. In the area of execution of wills and administration of estates, we have many years of experience acting as executor or curator.

Our specialist lawyers – consulting a tax expert if needed – prepare wills and contracts of inheritance for testators and analyse existing testamentary dispositions. In many cases, this involves questions of claims to compulsory portions of the estate and their reduction. We also advise you on optimising your estate planning in terms of inheritance tax.

For heirs, we prepare inheritance tax returns and value assets from a taxation standpoint. We check whether you have any claims to compulsory portions and represent you in case of disputes between members of a community of heirs. We also help you obtain a certificate of inheritance and represent you throughout the entire probate proceedings.

What arrangements can we make for you?

Contact

Anita Veenhoff
Rechtsanwältin (Attorney at law)

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Call +49 7841 708-400 Direct message