Inheritance and succession in Germany
There are several Danes who have relatives and family in Germany or who are married to a German, and therefore there are several who experience being involved in a change in Germany.
The main rule is that if the deceased had his last place of residence in Germany at the time of death, the transfer must take place in Germany, and the inheritance is transferred according to German rules.
In this article, I will briefly describe some of the most common problems that an heir in Germany encounters.
However, I emphasize that the information contained in this article is of a guide nature and that it is often necessary to involve a lawyer who is familiar with the German rules in an inheritance case that takes place in Germany.
In addition to the division of the deceased’s assets, it is often necessary to have a German accountant or a German lawyer specializing in tax law prepare a tax return for the inheritance received, even if the heir is not resident in Germany.
1. Which authority is competent in Germany in inheritance matters
In principle, it is the probate division of the district court (Nachlassgericht beim Amtsgericht) at the testator’s last place of residence that has jurisdiction to deal with the inheritance of the deceased. In this article I will call “Nachlassgericht” the Bankruptcy Court for the sake of simplicity. In some German states, it is the notary who acts as the “Nachlassgericht”.
When a death occurs and the deceased has left a will that is filed with the probate court or removed from custody, it is officially opened by the probate court and the heirs are summoned and notified automatically.
2. Waiver or acceptance of inheritance
The heirs can waive an inheritance by submitting a declaration to the Probate Court/notary. This statement must be presented to the Probate Court/notary, who will register it, or submitted after certification by a notary.
A declaration of acceptance does not need to be made in a particular form, and there is no need to acknowledge receipt. Exceeding the deadline for renunciation (6 weeks from the time the heir has been notified of the death by the Probate Court) is sufficient to constitute acceptance.
German inheritance law does not include any provision on the acceptance or waiver of forced inheritance.
Waiver of inheritance means that the heir is not liable for the obligations that rested on the deceased.
If an heir accepts his inheritance, he legally takes the place of the legatee. This means that she/he is also responsible for the debt and liable for its payment with her assets.
The heirs can, however, limit their liability for the deceased’s debts to the so-called inheritance (“Erbmasse”). This means that the deceased’s creditors do indeed approach the heirs with a view to having their claims met, but the heir’s assets remain protected against such claims. The heirs can achieve this limitation of liability in two ways. They can either submit an application to the Insolvency Court to seek the Insolvency Court’s treatment on behalf of the creditors, or they can initiate insolvency proceedings against the estate by submitting a request to this effect to the District Court, which can act as the Insolvency Court (Insolvenzgericht).
If the inheritance is not sufficient to cover the costs of the Probate Court’s processing on behalf of the creditors or to cover the costs of the insolvency proceedings against the estate, the heirs can still have their liability limited. If a creditor files a claim, the heirs can plead that the inherited funds are insufficient to satisfy the claim. In that case, the heirs can refuse to fulfill outstanding claims, insofar as the inheritance is not sufficient. However, the heirs must make what remains of the estate available to the creditors.
If the heirs only want to avoid being confronted with debts that they had not anticipated, they simply need to initiate a proclamation procedure (Aufgebotsverfahren), whereby all creditors of the heirs are invited to report their claims to the Probate Court within a certain period. If a creditor does not report his claim on time, he must settle for what is left of the inheritance at the end. The public proclamation procedure can also give the heirs clarity as to whether there is reason to let the estate be transferred to public treatment by applying for treatment of the estate or to have the estate treated as a bankruptcy estate.
3. Processing at the Probate Court/notary
The probate court or the notary issues a so-called “Erbschein” (certificate of inheritance), which contains information on who the heirs are, the extent of the person’s inheritance rights and possibly also provisions on the order of inheritance or execution of the will.
After the “Erbschein” has been issued, the Probate Court’s / notary’s task is complete.
In Germany, the term “bo” does not exist.
The inheritance then becomes the joint property of the heirs. As a result, the heirs may only jointly dispose of the individual assets in the estate and pay any creditors of the deceased. They must also manage the estate jointly. This often creates greater difficulties, especially if the heirs live far apart and cannot agree. This “forced community” is usually impractical, and in principle each heir can request that the community be dissolved by a so-called division of property. The most important exception to this is when the testator has stipulated in his will that the inheritance may not be divided for a certain period, e.g. to make it possible to continue to run a family business.
If the testator has appointed an executor, the distribution of the assets of the inheritance falls under his duties. If not, the heirs must do it themselves. For that purpose, they are allowed to seek assistance from a notary. If the heirs fail to reach an agreement, even if they have appointed a notary to act as an intermediary, the only remaining option is to file a lawsuit.
4. Real estate constitutes (part of) inheritance
It is necessary to submit a request for correction of the land register together with documentation that the land register’s identification is not correct, so that the heir of the owner of a property can be entered in the land register as owner. A correction of the land register after the death of the registered owner requires in any case that the person requesting this has proof of his status as an heir.
As a basis for a correction of the land registry, the applicant can usually prove his status as an heir by presenting an “Erbschein”.
If the inheritance is based on a death disposition in a public document (a notarial will or an inheritance agreement), it is sufficient to show the land registry office (Grundbuchamt) the will and the official notification that the will has been opened.
If an immovable property is the subject of a legacy, a document drawn up by a notary must always be presented in order for the property to be transferred to the legatee, regardless of which rules of inheritance apply. This document certifies the legatee’s right to take over ownership of the immovable property.
Other documents may also be required depending on the nature of the case. In order to e.g. a commercial company can be registered as an heir, the applicants must provide proof of their power of representation (e.g. official extract from the commercial register).