What is a “Vermächtnis” in a German Will? And how to claim it.

In the UK (and many other Common Law Jurisdictions) the property of the deceased passes initially to a personal representative (executor or administrator) who administers the estate by collecting it in, paying creditors and taxes and then passing the balance to the beneficiaries. Under German law, however, there is no such administration of the estate by a personal respresentative. Instead, in Germany (as in France) the heirs inherit their share of the estate of the deceased directly on death and automatically assume responsibility for the debts of the deceased and the tax on inheritance. If they do not wish to be a (co-)heir, they need to actively renounce heirship within certain deadlines. This outcome is the same whether there exists a Will appointing the heirs or whether the heirs are defined by German intestacy rules.

Heirs (Erben), under German law, thus administer the estate directly and distribute the assets amongst themselves. Each heir has the right to contact banks, insurance companies and other debtors. The heirs, however, can only act jointly and they must unanimously agree on what steps to take. Thus, the more co-heirs there are, the higher the risk of them starting to quarrel over something, e.g. whether and for how much a flat or jewellery shall be sold. It is therefore, a German succesion lawyer’s standard advice, to keep the number of heirs as low as possible. This does, however, not mean that a German testator is prevented from distributing his assets to a large number of persons.

If a German testator whishes a certain beneficiary to receice a specific gift without making that beneficiary a co-heir, then the best way to achieve this under German inheritance law is to include in the Will a so called “Vermächtnis” (legacy, bequest). This is defined in sec. 1939 German Civil Code:

 Legacy: The deceased may by will give a material benefit to another person without appointing the other person as heir (legacy).

The beneficiary entitled to such a Vermächtnis is called a Vermächtnisnehmer (legatee). He or she is informed by the German Probate Court about the existence of such a testamentary legacy. Then, the legator can (and should) approach the heir(s) and demand the heir(s) to fulfil the legacy. If the legator waits longer than three years then the claim is statute barred under German law. If the will contains a pecuniary legacy, the monies will simply be paid out to the legatee. If, however, a German property (flat, house, plot of land) is bequeathed, then the transfer requires the heirs and the legatee to sign a formal deed before a German notary, as so called Vermächtniserfüllungsvertrag (Legacy Fulfillment Contract).

There are certain circumstances, where the heir(s) can refuse to fulfil the legacy, for example if fulfilling the legacy claim would result in the heir(s) to be stuck with less than what their forced share (Pflichtteil) under German succession law would be.

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

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

– – – –

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. 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.

German Lawyers do not Renew their Practising Certificates each Year

How to check whether a German Lawyer (or other Professional) is properly licensed and insured

Hiring a foreign lawyer involves a certain amount of trust, especially if this lawyer is supposed to handle the client’s funds abroad. Many potential clients from the UK and the USA therefore ask their potential German attorney-at-law (Rechtsanwalt) to provide a copy of their current practising certificate. This request will, however, baffle a German lawyer (or tax advisor, account or auditor). This is because, in contrast to English solicitors, German professionals do not need to renew their professional licenses every year.  Instead, their lawyer’s license – once issued – is perpetual and is only being revoked if the lawyer is in breach of his / her professional duties. The same is true in regards to German professional indemnity insurance (Berufshaftpflichtversicherung).

munich-bar-lawyers-certificateThis, by the way, is what a German lawyer’s genuine practising certificate (Zulassungsurkunde) does look like, in this case issued by the Munich Bar Association (Rechtsanwaltskammer München) back in 2001. They still look the same. The seal at the top of the certificate will look different, of course, depending on which regional German bar association has issued the certificate.

But how, if the lawyer’s certificate was issued years or even decades ago, can you verify if a German lawyer (Rechtsanwalt) is actually still admitted to the German bar association and is currently properly registered? Very easily: Simply visit the official website of the German Federal Bar Association (which is also available in an English version) and enter this persons name to search the entire database of all German advocates admitted to the bar. That way, you can verify whether this lawyer actually exists and what his / her official law firm office adress and phone number are.

More information on German lawyer’s professional regulations are available here:

If you search for German litigation experts who are fluent in English, visit the website of GP Chambers: www.GermanBarristers.com. GP Chambers, with its international expertise, is well equipped to advise and represent clients from the UK, the USA and other English speaking countries.

More information on civil litigation and evidence rules in German Courts of law and before German arbitration tribunals:

– – – –

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 business and corporate matters, including the representation of clients in M&A transactions, medical malpractice litigation, contentious probate matters or labour law disputes throughout Germany.

If you wish us to provide advice on German law or represent you in court or arbitration proceedings in Germany, please call German lawyer Bernhard Schmeilzl, LL.M. (Leicester) or Munich based English solicitor Elissa Jelowicki on +49 941 463 7070.

Is “Miteigentum” in a German Property the same as “Tenancy in Common”?

Well, it is quite close, if not identical. The German concept of Miteigentum (co-ownership) is regulated by the German Civil Code in sections 1008 to 1011. Each “Miteigentümer” has a direct, separately transferable interest in the property. However, where property is concerned, the rights of co-owners in Germany are usually individually defined in the notarial deeds and the German Land Registry (Grundbuch). In particular, the co-owners usually agree a right of first refusal (Vorkaufsrecht) or they even bind themselves in a way that no one can sell his/her share without the consent of the other co-owners. Thus, in order to really be certain about the rights and obligations that come with a property share in Germany, one must definitely inspect the Land Registry. The rights and obligations amongst the German Tenants in Common are regulated in section 741 ff German Civil Code, titled “Co-ownership by defined shares” (Gemeinschaft nach Bruchteilen). Very much simplified, the basic rule is: everything must be agreed by unanimous vote (section 744 BGB). This means that if the co-owners cannot agree whether (or to whom) the property shall be let or sold, whether it shall renovated (or by whom), then there is deadlock.

If all attempts to reach an amicable solution with the other co-owners has failed, the only way to break free for a tenant in common who is caught in such a situation, is to apply to the local German court (Amtsgericht) for a so called Teilungsversteigerung procedure (compulsory partition by public auction). This means that the entire property (not just one share) is then auctioned off through the court and the proceeds are divided between the co-owners according to the size of their shares. Each co-owner is allowed to participate in the auction. This Teilungsversteigerung should, of course, only be the means of last resort, because it triggers significant court fees, surveyor costs and stress. However, in practice, this happens fairly often in Germany, especially is the Miteigentümergeeinschaft has come into existence due to an inheritance. More on this Miterbengemeinschaft here.

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

– Legal guide to buying a house or apartment in Germany

– Template of German Land Sale & Purchase Agreement

– Apartment Prices in Germany: How to get a quick Overview

– Searching for Property Information in the German Land Registry

– Tenants beware of Waiver Clauses in German Property Lease Agreements

 

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

– – – –

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 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.

Efficient Transfer of Foreign Assets

Seminar for British Solicitors and UK Accountants who advise Clients with Assets Abroad. Main focus is on Germany, but speakers will also briefly touch upon Austria and Switzerland.

seminar_lyndalesIf you advise clients who own property or other investments abroad, they are not always aware of the fact that this will trigger foreign inheritance taxes and that the executor(s) or beneficiaries will have to go through local probate procedure, which can takes many months and cost many thousands in legal and court fees. Smart Will preparation and other preparatory measures can mitigate costs and speed up foreign probate tremendously.

English Solicitor Stan Harris, OBE and German lawyer Bernhard Schmeilzl, LLM (Leicester) are experienced experts in international succession law, especially British-German probate matters and cross-border inheritance tax issues. On  Thursday, 3 November 2016, they offer a seminar for British lawyers and accountants who advise clients with German assets, bank accounts, stocks and investments. Real life case studies will illustrate how to tackle efficiently tackle probate matters connected to Germany. The topics include:

  • Understanding German Wills and Intestacy Rules
  • Will Preparation for International Families and Expats
  • Making English Wills work in Germany
  • Access Foreign Assets in Germany: is Probate unavoidable?
  • Speed up Probate Procedure
  • Mitigate Inheritance Tax in both Countries

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

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

– – – –

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. 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.

Broken Engagement in Germany: Engagement Ring must be returned

May the Bride keep the Engagement Ring under German Family Law Rules?

German law is very simple in regards to what happens to engagement gifts (especially engagement rings) if the the wedding is called off: They must be returned. Section 1301 German Civil Code (BGB) states:

Section 1301: Return of the presents

If the marriage does not take place, each engaged person may require the other to return what the former gave as a present or as a sign of the engagement, under the provisions on the return of unjust enrichment. In case of doubt it should be assumed that the claim for return is to be excluded if the engagement ends as a result of the death of one of the engaged persons.

In this context, it does not matter who has broken the engagement and whether one party is at fault. The wedding ring and other present which have been made because of the engagement must be returned. Period. Things are a bit more complicated in Common Law jurisdictions, where the bride is often allowed to keep the engagement ring (see here, here and here). Still, most western states nowadays follow the no-fault, conditional gift approach and award the engagement ring to the giver in case of a broken engagement. Continue reading

Formal Requirements to set up a valid Will in England, Scotland and Germany: What are the Differences?

International families, expats or elderly people who have moved to another country after retirement often have the choice as to under which country’s legal regime they wish to set up their Last Will & Testament (see here for mutual acknowledgement of Foreign Wills). In this article we compare the formal requirements of German, English and Scottish law (the latter being surprisingly different from English law, in spite of England and Scotland both being in the United Kingdom).

gp_anz_mav_very_british_en_KOMPLETTE_LINKLISTEIn Germany, a testator has two options to make a valid will: Either write the entire will in his or her own hand (so called holographic will) or make an appointment with a German notary (or German consular officer if the testator lives abroad) and have the will notarised. The latter alternative has one practical advantage: The heirs won’t have to obtain a German grant of probate (Erbschein or Testamentsvollstreckerzeugenis) later, because a German notarial will is accepted without such grant, i.e. in lieu of an Erbschein. This saves the German inheritors (beneficiaries) money and time. The German Supreme Court (Bundesgerichtshof) has even decided in a recent ruling of 5th April 2016 (BGH 5.4.2016, XI ZR 440/15), that the German heirs do not even need to obtain a German grant of probate if a holographic will is very clear and simple (see for example here). Up until then (and probably also for quite some time in the future, in spite of this recent ruling), German banks and insurance companies have always insisted on the heirs to produce a German grant to prove that they are entitled to the funds. More on German Wills and German Probate Procedure in the articles listed below.

England, Wales and Scotland use a very different approach to setting up a valid will. However, surprisingly, at least to a non British person, English and Scots Wills are quite different. Despite both being in the United Kingdom, Scotland and England retain their distinct differences in legal traditions. In fact, two entirely different legal systems exist in this small island, because Scots Law derives largely from principles akin to the Roman tradition and remains distinct from the English Common Law approach with heavier emphasis on precedent and equity. Thus, the law relating to wills, succession and probate proceedings is very different in England & Wales on the one hand and Scotland on the other hand side. Continue reading

Company Finance and Accounting in Germany

euro_billsSmaller businesses, under German tax and accounting laws, must deliver to the same professional standards as larger companies, but they are often not in a financial position to pay for an experienced in-house team of accountants, controllers and financial planners. For such companies in Germany we offer the expertise and services of a full team of English speaking experts, but on a „pay only for what you need“ basis.

We provide German subsidiaries or branch offices of British and American enterprises with experienced services in the areas of financial bookkeeping, payroll, cost accounting, forecasting and strategic planning. We also help you observe all German legal requirements. Of which there are plenty.

If you are establishing a new business in Germany or expanding by opening a branch, we can help you set up the necessary systems from scratch. You will look forward to your monthly finance review – because the numbers will be clear and understandable. We also do assist with writing applications for German and EU grants and will provide you with all the necessary charts and tables for professional negotiations with investors and buyers.

FG_LogoDon’t hesitate to call us on +49 (0) 941 463 707 80. Here you find more information on Friendly Germans, the British German Consulting Company.

Buying a German Company

If you consider buying or merging with a German company or stock corporation (see checklist here), we can either structure and manage the entire acquisition process for you or merely assist with specific tasks like due diligence (e.g. financial, legal, business, IT) or contract negotiation. Our team of lawyers, financial and business experts has extensive experience with international M&A projects in various industry sectors. We will always keep matters as simple and straight forward as possible.

If the potential buyer does not want to be identified, we can provide trustworthy professionals that act as trustees and acquire the company shares on the buyer‘s behalf. Fully compliant, of course, with all laws and regulations of Germany and the European Union. For non-legal work, we do recommend the service provider Friendly Germans Ltd. The British-German Consultancy Firm.

More on German company law is available in these posts:

Establish a German Limited Company (GmbH): FAQ and Checklist
What is a GmbH? The German Limited Liability Company explained
Checklist: Formation of a German Company. And then what?
Buying a German Company: A quick Checklist
How to read a German Company Register Extract
Company Forms in Germany: An Overview
Brexit as a Business Opportunity for British SME’s

– – – –

The 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 business and corporate matters, including the representation of clients in M&A transactions. If you wish us to advise or represent you please call German business lawyer Bernhard Schmeilzl, LL.M. (Leicester) or Munich based English solicitor Elissa Jelowicki on +49 941 463 7070. For non-legal work, we do recommend the service provider Friendly Germans Ltd. The British-German Consultancy Firm.

English Desk at German Law Firm Graf Partners LLP

Solicitor_SchmeilzlThe Munich and Regensburg based German law firm Graf & Partners LLP, established in 2003, specialises in providing professional legal services to English speaking clients, both business and private. Our British-German specialist teams of lawyers and linguists advise on all legal and tax issues connected to Germany and European Union law, from business, corporate and labour to international probate, family law and property.

Solicitor_EJ_MunichThe English Desk in our Munich office is headed by dual qualified English solicitor and registered European lawyer Elissa Jelowicki. The English Desk at the Regensburg office is headed by the firm’s managing partner Bernhard Schmeilzl, LL.M.

Our English partner firm Lyndales Solicitors LLP, located in central London, operates a German Desk with expertise in German-British legal matters from an English law perspective. Together, the British-German lawyers do assist UK, US and other international clients in both the United Kingdom and in Germany.

And should you need to go to court in Germany, the litigation department GP Chambers provides forensic services in German civil and business lawsuits or arbitration proceedings throughout the country. Our senior lawyers are also frequently called upon to act as arbitrators due to their expertise in both English and German law as well as their language skills.

If you need assistance with German law or tax issues, why not contact German lawyer Bernhard Schmeilzl, LL.M. (Leicester) or Munich based English solicitor Elissa Jelowicki on +49 941 463 7070.

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

– – –

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.

Is an English Last Will & Testament valid in Germany?

In most cases, the answer is simply: yes! Any Last Will which is set up in accordance with the formal requirements of English or Scottish law is, in principle, recognised as a valid Will by German Probate Courts.

Within the European Union, this is nowadays exlicitly stated in Article 27 of the EU Succession Regulation, which, however, the UK has opted out of (even before Brexit): Continue reading