Higher Probate Fees in the UK as of May 2017

Update 25 April 2017: The below post is outdated because due to Theresa May’s snap election called for 8th June 2017, the British government has dropped the plans to raise probate fees (at least for now). More on the matter here.

Please note that the UK Probate fees will change from May 2017. For estates with a value of up to £50,000 (pre IHT) the fees will be nil. This is an improvement, because the current threshold for fee exempt estates was £5,000. For all other estates, the probate fees will now be significantly higher. The current flat fee up to now was £215. The future probate fees for estates in the United Kingdom are:

Value of estate (before inheritance tax) Probate Fee
Up to £50,000 or exempt from requiring a grant of probate £0
Exceeds £50,000 but does not exceed £300,000 £300
Exceeds £300,000 but does not exceed £500,000 £1,000
Exceeds £500,000 but does not exceed £1m £4,000
Exceeds £1m but does not exceed £1.6m £8,000
Exceeds £1.6m but does not exceed £2m £12,000
Above £2m £20,000

More details on the increased UK Probate Fees are available here.

For more information on cross border probate matters, international will preparation and German inheritance tax matters see the below posts by the international succession law and tax law experts of German law firm Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

The Anglo-German law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate and tax matters, including the representation of clients in contentious probate matters. We are experts ininternational succession matters, probate and inheritance law. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Checklist for forming a UK Limited Company

If you do business on an international level, you should carefully choose the ideal company form to use. Should, for instance, your business depend upon attracting German customers and/or suppliers, the best choice may not be an English limited liability company, because such a company does not have the best reputation in Germany. In this case, you might want to opt for a German GmbH (for details on how to establish a German limited liability company see here). Vice versa, if you are a German entrepreneur doing business in the UK, you might want to consider establishing an English limited liability company. Here is a brief checklist on what to consider when establishing such an English company.

A company is registered by filing the necessary documents and paying the required fee at Companies House. The company is brought into existence when the Registrar of Companies (Registrar) issues the certificate of incorporation.

The prospective owners of the company can either:

  • register a new company with documents that are specifically tailored to their requirements (a tailor-made company); or
  • buy a company that has already been incorporated but has not yet traded (a shelf company).

To form a private company limited by shares, form IN01 (Application to register a company) must be completed and filed with the Registrar of Companies. In order to complete the registration process, could you please answer the following questions:

  • What is the proposed company name?
  • Country of registered office and intended address of the company’s registered office? If you do not intend to have an actual office, please let us know as we can recommend a service agency who can do this on your behalf.
  • How do you want the company to be governed? There are standard articles of association, however, for example, if you would like the shareholders to have more say than the directors, please let us know as the articles will have to be amended/drafted to reflect this.
  • Details of first directors and secretary (if any) including title, full name and former names, date of birth, country or state of residence, nationality, occupation, service and residential addresses.
  • Are any service contracts to be entered into with the directors? Are there any other contracts or arrangements with any director or person connected with a director?
  • What is the share capital? I.e. how many shares and at what price do you want the shares to be? We would always suggest using 1GBP per 1 share.
  • Statement of initial significant control. From 30 June 2016, newly incorporated companies must file a statement of initial significant control at Companies House as part of the application for registration (sections 9(4)(d) and 12A, CA 2006). This statement must identify any subscriber who qualifies as a registrable person with significant control (PSC) (or registrable relevant legal entity) and that information must be used to populate the company’s PSC register. The details must be submitted on Form IN01. If there are no persons with significant control, a statement to this effect must be made on Form IN01.
  • If there is more than one shareholder, do you want to have a shareholder’s agreement?

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK, the USA and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070 in order to contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.

Pursuing Legal Action in Germany?

You found the German law firm perfectly equipped to address your legal needs in Germany

Since 2003, German law firm Graf & Partners specialises in providing legal advice and litigation services to British and American clients. The majority of our clients come from Britain, the USA or other English speaking countries and are in need of pursuing a legal matter in Germany. If you need a competent and trustworthy attorney anywhere in Germany, our experienced contract lawyers and bilingual litigators will be happy to assist.

The firm’s managing partner Bernhard Schmeilzl and several other lawyers in our litigation team have studied and worked in the USA and/or Britain. As a result, Graft & Partners have established a unique and impressive international legal practice, which focuses specifically on British-German and German-American legal cases and issues. Our Anglo-German lawyer team is headed by British and Canadian citizen Elissa Jelowicki, a qualified English solicitor, and Registered European Lawyer, admitted to the Munich Bar Association. Therefore, foreign clients and instructing lawyers from the UK and America are able to discuss their specific case with a native English speaker, who also knows the English legal system.

Our German and British litigation lawyers appear before German law Courts throughout the country and are also experienced in (Commercial) Arbitration and Alternative Dispute Resolution. We provide specialist legal advice, support and forensic services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims and contentious probate. In addition, our family law experts deal with international divorces and child custody matters. In relation to other legal areas, e.g. criminal law or tax, we will be happy to recommend qualified German lawyers from other chambers, who are also fluent in English.

On a regular basis, we speak on German-American and British-German legal issues at lawyer conventions and at in-house events of international companies and law firms. See here for some of the topics we have spoken on recently:

More information on litigation and legal fees in Germany is available in these posts:

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Call the experts on German-British and German-American legal matters

Since 2003, the German law firm Graf Partners LLP with its headquarters in Munich specialises in British-German and US-German legal cases. Our German lawyers are fluent in English, have many years of practical experience with clients from Britiain and the USA and are part of a well established network of law, tax and accounting firms.

Bernhard Schmeilzl_crop1Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, especially German-American and German-English commercial and probate cases. In addition to obtaining his German legal exams with distinction, he also graduated from the English University of Leicester where he obtained his Master of Laws degree in EU Commercial Law in 2003. 

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070.

Pitfalls of German Law (Part 2)

Be careful when suing a German Kommanditgesellschaft (KG), an Offene Handelsgesellschaft (OHG) or a Gesellschaft bürgerlichen Rechts (GBR)

The single most common mistake foreign claimants and their non-German litigation lawyers make when taking a German business to court is that they only sue the partnership itself and not the personally liable partners (persönlich haftende Gesellschafter).

To avoid any misunderstanding: This post deals with German partnerships (Personengesellschaften) as debtors, not with German limited liability companies (GmbH) or German corporations (Aktiengesellschaft). If the debtor is a German company, then – normally – only the company itself can be sued, not the company’s shareholders. There may be special circumstances when a director of even a shareholder may be personally liable for a company debt (piercing the company veil, in German: Durchgriffshaftung), but this is the exception to the rule.

The situation is entirely different with German partnerships, which come in four different shapes and forms:

  • Kommanditgesellschaft (KG), mostly in the form of a GmbH & Co KG
  • Offene Handelsgesellschaft (OHG)
  • Gesellschaft bürgerlichen Rechts (GbR), also called BGB-Gesellschaft
  • Partnerschaftsgesellschaft (PartG)

What these German partnerships have in common is that there is at least one partner who is liable for all business debts with his entire personal property (Privatvermögen). The relevant statute is section 128 German Commercial Code (§ 128 Handelsgesetzbuch). With regard to the OHG and the GbR all partners are fully liable. With regard to the Kommanditgesellschaft (KG) there are two kinds of partners: fully liable partners (Komplementäre) and limited partners (Kommanditisten), who are only liable up to the amount they have invested.

Now, if you (or your client) have a claim against such a German KG, OHG, GbR or PartG, the biggest mistake you can make is to sue only the partnership itself. This is because with a court order against the partnership you can only enforce your claim against the partnership, i.e. the business assets of said partnership. In many cases, however, it is likely that there are no longer any business assets to go after as the partnership is doing poorly or has even folded.

In these circumstances, you will naturally want to go after the personally liable partners of the partnership. And, you can. But only if you have listed them as joint and several co-debtors (Gesamtschuldner) in your lawsuit against the partnership.

If you (or your litigation lawyer) have not done this, then the court order cannot be enforced against the partners. You will have to start a new lawsuit all over again. In some cases, you may of course face limitation problems by then (German limitation periods are explained here).

Thus, whether you sue the German partnership in Germany or abroad, you must ensure that you do not only list the partnership itself as a defendant but also every personally liable partner which you may want to enforce the court order against at a later stage. Psychologically, this puts much more presure on the defendants and thus increases the chances of payment or a favourable settlement agreement. By the way: the lawsuit costs are not increased by co-suing the partners. So there is no reason whatsoever not to include them in your court claim.

See here for other “Pitfalls of German Law“.

More information on litigation and legal fees in Germany is available in these posts:

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK, the USA and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070 in order to contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.

Dodging Debts by Moving to the UK?

Has your German Debtor moved to the UK and declared himself or herself bankrupt under the UK / British Insolvency Rules?

Since we specialise in British-German legal matters, our firm very often gets enquiries from German individuals, companies or banks regarding a situation whereby a German individual has moved to the United Kingdom and declared bankruptcy in order to avoid paying their debts and liabilities back in Germany. Even further, it is quite common that civil proceedings will have been commenced in Germany, but particular the individual pleads that they do not need to repay the debt in Germany in light of their bankruptcy back in the UK.

The way individuals are able to declare bankruptcy in the UK is now much much easier than before (yes, a bit shocking considering it was not that difficult before). Previously, one would have to petition to the Court, however, as of 6 April 2016, the individual debtor no longer has to. Instead, they must make an online application to an adjudicator (not a judge anymore). If a debtor’s application provides all the prescribed information, and is considered appropriate, the adjudicator will automatically (this is indeed what makes the new system scary) make a bankruptcy order pursuant to its statutory jurisdiction under the Insolvency Act 1986 (IA 1986). The adjudicator is an official appointed by the Secretary of State for the Department for Business, Energy and Industrial Strategy (again – this adjudicator no longer has to be legally qualified).

The adjudicator has no inherent discretion over whether to make an order (again this probably concerns you if you believe that the individual is not telling the truth). If the statutory requirements for an order are met, the adjudicator must make it; if they are not met, the adjudicator cannot make the order.

The statutory requirements are:

  • The adjudicator had jurisdiction under section 263Iof the IA 1986 to determine the application on the date the application was made.
  • The debtor is unable to pay his or her debts at the date of the determination.
  • No bankruptcy petition is pending in relation to the debtor at the date of the determination.
  • No bankruptcy order has been made in respect of any of the debts which are the subject of the application at the date of the determination.

The adjudicator must make a bankruptcy order against the debtor, or refuse to make such an order, before the end of 28 days from the date of the bankruptcy application, unless the adjudicator requests further information from the debtor. If the adjudicator requests further information the adjudicator has 42 days from the date of the application to make an order. If the adjudicator does not respond to the debtor before the end of this period, the application is deemed refused.

What do you do in such a situation? Well, the process is not easy, but it is possible to overturn such a bankruptcy order, referred to a lot of time as a „sham bankruptcy in order to avoid paying debts“. The courts have retained their general jurisdiction over all bankruptcy proceedings commenced following the adjudicator’s bankruptcy order (including a rescission or annulment application), and will also hear any appeal from the adjudicator’s decision to refuse to make a bankruptcy order.  Moreover, it is an offence if the individual knowingly or recklessly to make any false representation or omission in making a bankruptcy application to the adjudicator or providing any information to the adjudicator in connection with a bankruptcy application.

It is also an offence knowingly or recklessly to fail to notify the adjudicator of a matter in accordance with a requirement imposed by the legislation. It does not matter whether or not a bankruptcy order is made as a result of the relevant application, and it will be no defence that any part of the offence was committed outside England and Wales.

So, if you are owed money in Germany and believe that your German debtor has run to the UK to declare themselves bankrupt, and in fact, it is a sham, you should contact the local bankruptcy department as soon as possible so that it can be overturned.

For more information about German law, in particular civil litigation and debt collection in Germany see these posts:

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070. To contact English solicitor Elissa Jelowicki in Munich please write an e-mail to elissa(AT)grafpartner.com.

Pitfalls of German Contract Law and German Company Regulations (Part 1)

Foreign Contract Lawyers beware of surprising German Laws and Directives!

The German Civil Code (Bürgerliches Gesetzbuch, BGB, available in English), the German Commercial Code (Handelsgesetzbuch, HGB, partly available in English), the German Act on Corporations (Aktiengesetz, AktG) and the Act on Limited Liability Companies (GmbHG, available in English) are all full of surprising regulations which can essentially void any agreement or deed drafted by a naive (in the nicest sense) British or US lawyer who is unfamiliar with the specifics of codified German Civil and Commercial Law. Therefore, this article is to make you aware of some of the dangerous pitfalls that you can face when entering into a German agreement. In this post we explain some peculiarities of German contract law which, if not known, can cost non-German in-house lawyers their job and can create liability risks for any foreign contract lawyer.

Some examples? Sure: Did you know, for instance, that giving notice under German law is usually only legally effective, if an original wet ink copy of the letter of termination (written notice) is handed to the employee, tenant, business partner etc? Providing notice by email, fax or orally, has not effect. Or, did you know that under German family law rules, contracts entered into by one spouse are not valid unless and until the other spouse provides his or her consent? Or have you heard about the German legal principle that a unilateral confirmation of contract letter (kaufmännisches Bestätigungsschreiben) sent from one merchant to the other becomes a binding contract if the confirmation letter is not immediately rejected by the recipient of the letter? You may agree, that this is probably rather helpful information if you are dealing with a German contractual partner or if you are the legal counsel of the non-German contractual party.

Don’t be tricked by German Law(yers)!

The following clarifies some statutes and German legal principles any British Solicitor, American Attorney-at-Law and non-German businessman should know before engaging in business in good old Germany:

This statute baffles not only many foreign lawyers (especially from Common Law jurisdictions), but is also often unknown to young German contract lawyers. Section 174 BGB is contained in the “general section” (allgemeiner Teil) of the German Civil Code, which means it applies to all areas of German civil law. In practice, the statute’s somewhat cryptic wording means that if someone acts as attorney, proxy agent or delegate for somebody else, the attorney must present the original, i.e. the wet ink copy of the power of attorney document signed by the constituent (principal). A simple copy, a fax or a scan are not sufficient. The consequences of breaching this law are particularly severe in the area of “unilateral legal acts” (einseitiges Rechtsgeschäft), i.e. if the attorney gives written notice to someone on behalf of the individual or company, or if the attorney sends out a demand note, a dunning letter or a cease and desist letter. All these legal actions have no effect if the attorney does not enclose an original (wet ink) power of representation document (and thus, if not, the recipient can and in most circumstances rejects the letter). Naturally, such notices and legal actions are often made by lawyers for their clients. Thus, the client will not be amused if it turns out that the lawyer’s written notice to the unwanted employee is ineffective for lack of an original power of attorney document. Or if the termination of an agreement is rendered to be too late because the notice period has been missed due to an invalid letter of termination. In our firm, we have have had numerous cases where an agreement, which could only be terminated every 5 years, prolonged for such a period, because a lawyer or another representative of one contractual party tried to terminate the said German agreement without presenting an original POA.

So, what to do as a lawyer? Well, best is to obtain an original POA from the client and enclose it in the letter. If this is not practical or would take too long, then an easy trick to circumvent section 174 German Civil Code is to ask the client to inform the opponent in Germany directly about the fact that the lawyer has been instructed to act on the client’s behalf (see the last sentence of the statute: “Rejection is excluded if the principal notified the other of the authorisation”). For this, strangely, German law does not require written form, so an email or fax from principal to opponent is sufficient. The law is not always entirely logical!

This brief statute appears quite harmless, but can have disastrous effects for one or even both contractual parties if overlooked during negotiations. Simply put, this statute means that an agent (anyone authorised by someone else to act on his behalf, in German a Vertreter) can and may not – at the same time – act (i) in his or her own name or (ii) as agent for another party. May sound cryptic, but does often happen in practice, as you can see from these examples: (1) A managing director of a German company wishes to invest in the company or wishes to buy an asset of said company for himself. (2) A managing director of a company is asked by an investor to represent the investor at a meeting.

Believe it or not: Regardless of which marital property regime you live in, under German law one spouse cannot enter into contracts without the express consent of the other spouse if the contract covers the vast majority of one’s fortune. Sounds cryptic again? Well, here is an everyday example: A husband owns property which is worth more than 80 or 90% of his entire fortune. If he wishes to sell this property, the deed of sale is not valid unless the other spouse co-signs the notarial deed providing their consent to the same. The same is true if one spouse tries to sell a business or another asset which constitutes the majority of that spouse’s fortune.

As a purchaser of German property or of the shares of a German company owned by that spouse you would probably like to know if that asset makes up the vast majority of that person’s wealth and you would want to make sure that the spouse does agree to the transaction. Otherwise, the deal could explode years later.

  • Contradicting General Terms (AGB), no “last shot doctrine”

In contrast to most Common Law jurisdictions, German Civil Law does not apply the last shot doctrine when it comes to general terms and conditions. Instead, if parties reject each other’s general terms, then neither terms apply to the extent they contradict each other. Instead, the default statutory provisions apply. This can lead to significantly different results depending on whether German or British or US law applies to a business transaction.

  • Confirmation letter between merchants (“kaufmännisches Bestätigungsschreiben”)

Another speciality of German commercial law is the so called “kaufmännisches Bestätigungsschreiben”, i.e. the confirmation letter between merchants. This legal principle of German law means that if merchants orally discuss a deal or transaction, and one party does confirm what that party believes the oral agreement was, then the content of the confirmation letter becomes legally binding unless the other party rejects the content of the confirmation letter without undue delay (ohne schuldhaftes Zögern), which in practice means 2-5 business days. Thus, if you are doing business with Germans, do not ignore letters you receive from the German business partner, even if you think that what they “confirm” in that letter is nonsense. A binding contract can come into existence without you ever signing a piece of paper or expressly re-confirming the terms.

  • How expensive are German lawyers? What is the Rechtsanwaltsvergütungsgesetz (RVG)? Fee agreement clauses of German lawyers with their clients

Clients and lawyers from outside Germany usually assume that legal fees need to be agreed on when they hire a German legal counsel and – until they sign a fee agreement – they do not enter into any financial obligations. You could not be more wrong. Because, to the surprise of many non-German clients, lawyer fees are regulated by statutory provisions. These fees can be significantly higher or lower compared to hourly rates in Common Law jurisdictions, because the German lawyer fees do depend on the value of the legal dispute, not so much on the amount of time spent on the case. So, if you hire a German lawyer because a debtor does not pay a debt worth EUR 500,000, the German lawyer writes one short letter and the debtor immediately pays, then the German lawyer has earned legal fees of approximately EUR 5,000 in spite of having only spent 30 minutes on the case. If the debt is only EUR 5,000 and the lawyer has to write numerous letters, make dozens of phone calls until the debtor pays, then the German lawyer earns only EUR 350, in spite of having spent 3-5 hours on the case. The thinking behind this German lawyer fee table is that the wealthier German clients shall pay higher fees and shall thus subsidize the legal costs of clients who claim only small amounts. In theory, on average it will level out for German lawyers. In practice, however, qualified German lawyers, especially experts in international law, will not accept a case unless the client is willing to pay hourly fees comparable to those in Britain and larger cities in the USA. More on the issue of German legal fees and lawyer remuneration here.

To be continued ……

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Experts on German-British and German-American Legal Matters

Since 2003, the German law firm Graf Partners LLP with its headquarters in Munich specialises in British-German and US-German legal cases. Our German lawyers are fluent in English, have many years of practical experience with clients from Britiain and the USA and are part of a well established network of law, tax and accounting firms.

Bernhard Schmeilzl_crop1Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, especially German-American and German-English commercial and probate cases. In addition to obtaining his German legal exams with distinction, he also graduated from the English University of Leicester where he obtained his Master of Laws degree in EU Commercial Law in 2003. But do not mistake Bernhard for a German lawyer who focuses merely on German-British legal matters.

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070.

German-American Law Firm based in Munich

Need a German lawyer who knows how to swing a baseball bat? 

Looking for a German lawyer who is aware of the fact that “morning joe” is not a coffee brand and that “take me out to the ball game” does not refer to soccer fans? Look no further. The lawyers of the Munich based German corporate, litigation and probate law firm Graf & Partners LLP specialise in German American legal issues since 2003.

Better Call Berny

Founding member and managing partner Bernhard Schmeilzl, LL.M. (Leicester) was admitted to the German Bar in 2001 and specialises in German-American and German-British legal matters ever since, especially in German-American and German-English commercial and probate cases. In addition to obtaining his German law degree in 1999 and taking his German bar exam in 2001 (both with distinction), he also graduated from the English University of Leicester where he obtained his Master of Laws degree in Commercial Law in 2003. But do not mistake Bernhard for a German lawyer who focuses merely on German-British legal matters.

German Litigation Lawyer with a Lifetime Batting Average of .370

Between 1990 and 1998, Bernhard has spent a total of 2 years in the United States, working as a summer camp counsellor in New Jersey, an assistant German teacher at Lawrenceville prep school near Trenton, New Jersey, as a baseball coach in Arizona and later as a trainee lawyer in New York and San Diego, California. Bernhard played and coached baseball for more than 20 years and insists to have achieved a lifetime batting average of .370, but we suspect he counted in little league and private backyard ball in that statistic.

After Bernhard qualified as a German contract lawyer and commercial litigation attorney with the Munich bar association, he has specialised in US-German legal matters and has built a network of US-American lawyers who also specialise in German-American corporate and commercial law, international sports law, German-American probate cases and international estate administration.

Therefore, while Bernhard is well acquainted with the ways of English solicitors and barristers and their respective ways to go about a legal case, he is even better equipped to team up with United States attorneys at law.

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate.

So, if you need a German lawyer who did not just have English in school, but who really speaks your language and knows where you are coming from, contact the experts on German-American and German-British law:

gp-logoa German limited liability partnership of German lawyers admitted to the Munich Bar Association (Rechtsanwaltskammer) with the right to represent clients in all courts of law throughout Germany, registered with the District Court Munich, Partnership Register Nr. 438, represented by its managing partners Bernhard Schmeilzl and Katrin Groll.

Our central switchboard number in Germany is: +49 (0) 941 463 7070

For more information about civil litigation in Germany see these posts:

German Tax Clearance Certificate (Inheritance Tax)

What is required to get German assets released to British or US-American executors or beneficiaries?

In order to get German assets released, the executors or beneficiaries must be able to provide the German banks or insurers with a German (or European) Grant of Probate – unless the testator has made the will in notarial form or the testator has granted a transmortal power of attorney. For more on how to access German assets without having to go through probate see this post.

What is often forgotten, however, is that in addition to the German grant of probate (Erbschein), the German banks will also ask to see a tax clearance certificate or “certificate of non objection”, in German called “Unbedenklichkeitsbescheinigung”. Without such German tax clearance letter from the German Finanzamt (tax office), the bank is not allowed to release the assets, especially not for a transfer abroad. More on the legal requirements regarding the release of foreign assets to foreign beneficiaries here.

This is what a typical inheritance tax clearance confirmation letter issued by a German tax office (Finanzamt) looks like. Usually, the German tax authorities send the tax clearance certificate directly to the respective bank to inform them about thefact that the monies may now be released to the executor or the beneficiaries.

The clearance certificate is issued by the local German tax office dealing with the inheritance, usually the city where the testator had his or her last Germany residence. To obtain the clearance certificate, the executor or the beneficiaries must submit the German IHT forms and pay any German inheritance tax due.

For more information on cross border probate matters, international will preparation and German inheritance tax matters see the below posts by the international succession law and tax law experts of German law firm Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

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Solicitor_SchmeilzlThe Anglo-German law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate and tax matters, including the representation of clients in contentious probate matters. We are experts ininternational succession matters, probate and inheritance law. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

 

Putting Someone on Speaker Phone without telling them?

In their piece about Speakerphone Etiquette, The Huffington Post recommends:

“Always ask the person on the other end of the line if he or she minds being put on the speakerphone. Some people find them annoying and invasive.”

This is excellent advice, especially if you speak to Germans on the phone. Why so? Because a German might not only be annoyed to find out that somehas has secretly listened in on the phone conversation. Instead, he or she might even press criminal charges, because under German law, putting someone on speaker phone (without telling them first and getting their consent) may consitute a criminal offence. Section 201 German Criminal Code protects the privacy of the non-publicly spoken word. Taping a phone call without the other party’s consent (which can easily be done with any modern smart phone nowadays) is even worse.

But even if such eavesdropping is not found to be a crime under certain circumstances, both putting someone on speakerphone without telling them first and listening in on such a phone conversation does constitute a violation of German civil laws (tort) and data protection regulations. As a consequence, someone who has secretly listened in on a phone conversation, is not allowed to appear as a witness on what he or she has heard in a German court of law. civil lawsuit. Thus, the (bad) habit of having a co-worker or one’s spouse covertly listen in on a phoen call to “have a witness for what the other party has said” is not only rude, but also dangerous and useless in regards to creating evidence. Furthermore, you can end up with a costly cease and desist order.

There are exceptional circumstances when putting someone on speaker without disclosing this fact to the other party is allowed under German law, for example when there is reason to believe that the other party may insult or threaten the caller, speak about a crime etc. Or when the other party knows from previous calls that speaker phones are typically used and the caller has never objected to this in the past.

For more information about German law, in particular civil litigation in Germany see these posts:

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The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German legal matters.The Anglo-German litigation lawyer team of GP Chambers is well equipped to advise and represent clients from the UK and other English speaking countries. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070 in order to contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester), managing partner and head of the litigation department. Bernhard is also frequently asked by British and US Courts and Tribunals or by legal counsels to provide expert reports and legal opinions on German law.

How to sell inherited German Property

An English or American Executor finds that the Testator’s Estate comprises a Flat, House or Plot of Land in Germany. What now?

If the deceased owned real estate in Germany which the executor or the beneficiaries now wish to sell as soon as possible, this legal guide explains what needs to be done to sell an inherited home in Germany. The sale of the German property may be complicated further if the house or flat is currently leased to a tenant, because German law protects private tenants against termination of the lease agreement. But first things first:

(I) Obtain German Grant of Probate (Certificate of Inheritance)

From a German law perspective, the estate of the deceased is not administered by a personal representative. Instead, the estate passes directly to the heirs due to the principles of automatic inheritance (Vonselbsterwerb) and universal succession (Gesamtrechtsnachfolge). If there are several heirs, they form a community of heirs (Erbengemeinschaft) and must act unanimously. More on this here.

Unfortunately, due to the UK opting out of the EU Succession Regulation, an English Grant of Probate or a Scottish Letter of Confirmation are not accepted in Germany (and vice versa). Non-EU Grants of Probate are even less acceptable. Thus, in order to prove to the German Land Registry and to the potential buyers who is entitled to sell and transfer the German flat or house, the executors or beneficiaries will have to go through German probate. There are two options for this: (i) to apply for a Certificate of Inheritance (which is the standard approach) or (ii) to apply for a Certificate of Executorship (which is the exception in Germany). More on how to apply for German probate here.

However, since in most inheritance cases from Common Law jurisdictions the wills are usually very clear on the issue of who the executors are, but not necessarily very clear on who – in German terminology – the “heirs” are and what the heir’s respective shares and rights would be. Thus, in these Anglo-German or American-German succession cases, it is sometimes simpler to apply for a Certificate of Executorship. A Certificate of Executorship does, in contrast to the Certificate of Inheritance, not state who the beneficiaries are, but instead it only states who is entitled to administer the estate. Such a Certificate of Executorship is in most cases accepted as sufficient proof by German courts and the German land registry. However, there is a small risk that a Certificate of Inheritance (Erbschein) may be demanded to effect the sale. Still, in most international succession cases we suggest to opt for the Certificate of Executorship.

The application does involve a significant amount of paperwork and the Executor will have to swear an oath in the presence of either a German notary or – in the UK or the USA – before a German consular officer.

Our law firm prepares the necessary application wording, sends a list of required documents and arranges for certified translations of the English or American documents (wills, death certificates etc) into German. Once the executors have taken the oath, we shall send the application to the German probate court at the deceased’s last German residential address.

(II) Putting the Property on the Market / Resolve Tenant Issue

If the testator did not live in Germany himself then chances are that he or she has leased the property to tenants. Under German law, the flat can be sold even if it is currently being leased to a tenant. The lease agreement automatically transfers onto the new owner. The German legal buzz word is “Kauf bricht nicht Miete” (selling the property does not terminate lease). An investment buyer may even like the idea of the German flat being rented out. However, having a tenant inhabiting the German property does limit the number of potential buyers because, in reality, most buyers are looking to move in themselves, especially if it is a small apartment or small house in a rural German area, where no one is interested to purchase property for investment reasons.

Thus, executors and beneficiaries usually wish to end the lease agreement and remove the German tenant. Evicting such a tenant is, however, rather tricky in Germany, because private tenants are well protected under German civil law. Lease agreements are usually open ended in Germany and the owner (here the executor) needs a legitimate reason to terminate such lease agreement. The most common reasons being non-payment of the rent or a need of the owner to use the flat for himself or a family member.

The intention to sell a flat is, per se, not necessarily a reason to terminate the lease agreement, but if we can establish that with termination of the lease agreement, the owners cannot find a buyer, this should suffice. However, the burden of proof that this is indeed the case lies with the landlord.

This matter may prove difficult. The executor should therefore ask the tenants whether they would be interested to buy the flat or house themselves. If not, the best strategy is usually to simultaneously look for buyers (there may be a potential buyer who does not mind that the flat is leased out) and at the same time start the termination and eviction proceedings.

To find buyers for a German property the owners can either advertise the real estate themselves (the market leader on German internet for this is www.immobilienscout24.de), if the executor or a beneficiary is willing and able to show the flat to potential buyers. The more professional alternative will probably be to hire a local estate agent. The agent’s fees in case of a real estate sale in Germany are usually borne by the buyer. Our firm does assist with finding a reliable and English speaking German estate agent.

(III) Sale of German Property

The selling and transfer of any property in Germany must be effected through a German notary public who acts as a neutral (judge like) legal official ensuring that both parties are being protected (Legal guide to buying a house or apartment in Germany). We will be happy to find a bilingual notary and instruct him / her once we have a buyer. We will also be happy to assess the draft sale agreement and explain the content to you (Template of German Land Sale & Purchase Agreement).

The purchase price is usually paid into the notary’s fiduciary account and is distributed by the notary as soon as the new owner is registered in the Grundbuch (Local Land Registry). The sale deed also resolves any mortgage issues.

(IV) German Inheritance and possibly also Property Sales and Capital Gains Tax

Finally, there is the matter of German taxes. Whether “only” the German assets or the deceased’s global estate is subject to german Inheritance tax depends on the deceased’s nationality and residence at the time of death (The Perils of German IHT and Gift Tax). In addition, selling inherited German real estate may trigger capital gains tax (depending on how long the property had been held by the testator prior to his / her death) as well as property acquisition tax (usually only for the buyer).

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More information on buying property in Germany, the German Land Registry and conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.

For more information on cross border probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

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Solicitor_SchmeilzlThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters.

We also advise and represent foreign clients who wish to purchase, sell or lease property in Germany. In case you would like to obtain specific advice on a specific case or need assistance in buying, selling or leasing property in Germany, please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.