Estate processing in Denmark for Danes living abroad
Danes abroad – deaths in Denmark
More and more Danes are settling abroad, and it happens that more and more people experience a death in the immediate family, where the estate processing takes place in Denmark according to the Danish rules.
Challenge of living abroad in case of death and inheritance in Denmark
It is a challenge for an heir to live abroad and participate in a probate proceeding in Denmark: most have never participated in a probate before and know neither the procedure nor the rules for probate. On top of that, the relatives are burdened with grief, and because of the distance they have to delegate several tasks to a person who is resident in Denmark.
Difficulties due to different rules in the two countries
Problems and conflicts can also arise with the law in the country where the Dane expatriate resides, and difficulties regarding the tax legislation in the various countries – when transferring inheritance from Denmark.
Possible conflicts of interest
Often there is not a reliable person who can undertake such a large task, and if the person resident in Denmark is also an heir, conflicts of interest can arise.
It is important to know the rules both in Denmark and in the country you live in
It requires a good knowledge of how estates are treated in Denmark, as well as knowledge of the practical and legal aspects of the actual transfer of the estate and the deceased’s assets abroad, as well as any pitfalls in relation to the tax authorities.
Find a lawyer with knowledge of law in both countries
It is therefore a good idea to contact a lawyer with knowledge of estate processing both in Denmark and in the country where the Dane resides, so that the heirs can easily get control of the deceased’s estate and assets in Denmark and possibly abroad.
When do you change residence in Denmark?
There are many reasons why an estate is transferred in Denmark: typically the deceased lives in Denmark or has real estate or other assets in the country (this can be one or more bank accounts).
Common to all estates is that the estate must be dealt with by the probate court in the jurisdiction where the deceased was domiciled. If the deceased was domiciled abroad and owned real estate in Denmark, the Ministry of Justice appoints the probate court which has competence to carry out the transfer.
If the death occurs in Denmark, the undertaker must be contacted and the closest details regarding the burial and opening of the will determined. The undertaker reports the death to the parish priest and the probate court. If the heir lives abroad, it is a good idea to contact the lawyer already at this point, so that the lawyer can keep in touch and “pull the strings” with all “actors” in the transfer from the start.
As soon as the national register receives notification of the death, it passes the information on to the deceased’s insurance company, bank, pension company, telephone company and the landlord (if the deceased lived for rent). The deceased’s PBS subscriptions must be canceled and any library books must be returned, excess medication must be returned to the pharmacy for disposal.
If the deceased lived for rent, the lease must not be terminated until the contents have been registered and distributed to the heirs or collected. If the property is to be valued, the lawyer dealing with the estate can contact the probate court with a view to appointing an appraiser who can value the property.
Meeting in the probate court – private or public probate?
In the event of death, the person or persons listed as next of kin in the death notice are summoned to a meeting in the probate court. The meeting takes place approx. four weeks after the death. The lawyer can appear on behalf of the heirs, and a trip to Denmark can thus be saved.
If the estate has assets and there is an agreement among the heirs on the treatment of the estate, the estate is treated as a private estate. The lawyer who handles the estate processing requests that the estate be handed over for private transfer.
In other situations, the probate court explains the heirs about the deceased’s financial situation and the treatment of the estate. In these cases, the estate can be distributed as estate settlement, funeral settlement, spousal settlement, unexchanged estate or executor’s estate.
Opening status and inventory
The lawyer handling the estate must submit an opening status at the start of the estate and an inventory at the end of the estate. The opening status contains a statement of the deceased’s assets and liabilities per the date of death, while the final statement contains an account of the distribution of inheritance among the heirs as well as a statement of the expenses incurred by the processing of the estate. Both documents are sent to the Probate Court, which forwards the information to the tax authorities.
If the estate is to be treated as a private estate, the opening status must be forwarded to the Probate Court no later than 6 months after handing over the estate.
Private probate must be completed no later than 15 months after the death. Otherwise, the estate must be treated as an executor’s estate.
Tax and charges
The estate is taxed in Denmark at different rates depending on who inherits.
When transferring funds abroad, you must be aware of the rules that apply in the country where the Dane abroad resides in order to avoid double taxation or other sanctions.
The rules on taxation of estates in Denmark and abroad are very detailed and complicated, and it is therefore impossible to give an overview or advice without knowing the specific case.
Advice must necessarily be personal and “tailored” to the client, especially with regard to the sanctions that clients may be sentenced to and the responsibility that rests on the lawyer.