Workshop “Clients with Foreign Assets” for British Inheritance & Probate Lawyers

Why would an English or Scottish solicitor even give a toss about German or Spanish inheritance tax laws or about French or Italian forced heirship rules? Well, for starters, in order to avoid the client’s survivors yelling at him/her some years later because they ran into probate or/and foreign tax problems abroad.

Or, and this is of course the far better reason, to really impress your client with advice on international aspects of estate planning the client would otherwise never have thought of. Are you a solicitor or accountant who advises British clients with assets abroad or relatives living outside the UK? Then you might want to check whether you were already aware of some of the tripwires described in this post on international estate planning and will preparation.

Estate Planning for International Families requires seeing the big Picture

A solicitor who knows the basic principles of other jurisdiction’s succession rules and inheritance tax concepts is much more valuable to his client because such a solicitor can avoid structuring English Wills which may have counterproductive consequences in other countries.

The standard advice given by many English solicitors is still: “If you own assets abroad make a separate Will in each of those countries”. Well, this is simply not enough because such wills need to be synchronised both from a practical probate perspective and in regards to the overall inheritance tax consequences. Also, sometimes the better choice is to deal with the foreign assets directly in the English will.

Since 2003, the succession and tax lawyers of Graf & Partner specialise in international estate planning and will preparation with a strong focus on British-German, American-German, British-Austrian and American-Austrian inheritance cases and probate applications. German lawyer Bernhard Schmeilzl regularly gives presentations and conducts inhouse seminars for British and American lawyers and accountants who advise clients who possess foreign assets or who have relatives abroad who shall inherit or receive gifts or legacies. More on these seminars here: Advising Clients with Assets Abroad

The goal of our seminars on international inheritance and tax law is not to make the English solicitor a Jack of all trades or to expose the solicitor to liability risks. Instead, the goal is to give the solicitor a basic idea about where the English estate planning approach might cause problems elsewhere and then team up with the respective experts from those countries to find the best overall solution for the client and his family.

To give you an impression of the case studies we discuss in our workshops here are a few slides taken from our 90 page power point presentation: Presentation Wills and Estate Planning for International Clients

For more information on German-British or Austrian-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.

International Wills: What your English Solicitor does not tell you (but should)

Drafting Wills for British or American Clients with Assets outside the UK / USA

You are a British or American citizen but have assets abroad, let’s say in Germany, Austria, France, Italy or Spain. Your English solicitor or your American lawyer suggests you make a Will which deals only with your national estate, i.e. the Will is restricted in such a way that it shall only apply to your assets located within the UK or the USA. The lawyer tells you that you should set up separate Wills for your foreign assets.

Is this really the best approach?

Well, this approach is extremely risky, because if your British or American estate lawyer does not consider the effects of your English or American Will in these other countries, your survivors are almost certain to suffer harsh consequences in regards to foreign inheritance taxes, may have to go through expensive and tedious foreign probate proceedings and they may even be confronted with foreign succession rules they have never heard of before but which are now applicable to the estate, e.g. forced heirship, obligatory heirship, elective share rules for surviving spouses, children and even parents of the deceased. In other words: The British or American beneficiary (e.g. the surviving spouse) will have to share the German, Austrian or French estate with the children or even the parents of the deceased because the testator was unaware of the foreign intestate succession rules or the compulsory elective share statutes which exist in many countries, especially those influenced by the French Civil Code (“Code Napoleon”), inter alia Germany, Austria, Italy and Spain. But also Islamic countries. An overview of this “Forced Heirship” concept is available on Wikipedia.

Thus, the standard “make one separate will per jurisdiction and hope for the best” approach is only suitable for those who also prefer to jump into a swimming pool without checking first whether there is even enough water in it. Those who would rather prefer to protect their survivors from unnecessary foreign taxes, legal costs and endless probate proceedings might want to consult an expert on international will preparation and international inheritance tax mitigation.

Just one simple example: How to avoid 5,000 Euros in German probate and translation fees and nine months waiting for the German grant? The testator who owns property in Germany can, while still alive, issue a so called transmortal or postmortal power of attorney which allows the transfer of the German property upon death – without the need for German probate. This is only one of many options to make life easier for your executors and beneficiaries. More on how to avoid probate in this post: How to Access German Assets without having to go through German Probate

Surprise Visit from the Foreign Tax Man?

Foreign inheritance tax is an issue which is very often overlooked or simply ignored by British solicitors or American lawyers. Especially one constellation leads to trouble on a regular basis because common law succession lawyers do not have this issue on their checklist when preparing a Will: If the testator is British, lives in the UK and only has assets located within the UK, then there may still be foreign inheritance tax due if the beneficiary lives abroad, let’s say in Germany, France or Spain. This is due to the fact that many European countries levy tax not on the estate as such but instead tax each individual benefiary, similar to the concept of income tax. In other words: In spite of the British estate having already been taxed in the UK, the son, daughter or grandchild who receives all or part of the estate from his or her parent or grandparent will have to pay German, French or Spanish inheritance tax on top of British IHT. Whether this tax burden can at least be mitigated depends on whether there are double taxation treaties in place or whether the respective country at least offers unilateral relief (for Germany see here).

All these (any many other) problems often remain unaddressed when a British client who has either assets or relatives abroad discusses his or her Last Will and Testament with a British solicitor or accountant. Many solicitors merely recommend to the client to consult a foreign lawyer. This is not always helpful because, even if the client does, such a foreign lawyer then also only sees his / her side of the story, i.e. German, French or Spanish inheritance law. Such foreign lawyer is, however, usually unaware of British issues like nil-rate band, unlimited spouse exemption, deed of variation etc and may thus make suggestions which sabotage the British side of estate planning. In order to come up with a truly working international will, the lawyer drafting the will either needs to be an expert in both countries’ succession and tax laws or the lawyers from the various countries need to team up. This may not be cheap but it is still better than to be unaware of foreign inheritance taxes or forced heirship laws. For the surviving beneficiaries, ignorance of the testator is certainly not bliss in this regard.

What makes matters worse is that a Deed of Variation is not being accepted by most European tax authorities. Instead, using such a Deed of Variation will in most cases be considered a second taxable event, i.e. a gift from the beneficiary mentioned in the Will to the person benefitting from the Deed of Variation. This may trigger additional gift tax. Thus, professional IHT planning is even more important in international constellations, because the content of an English (or US American) will can’t be changed anymore even if the tax consequences later turn out to be unpleasant. More on this here: Deed of Variation and International Succession

Seminars for Lawyers and Accountants with International Clients

Since 2003, the succession and tax lawyers of Graf & Partner specialise in international estate planning and will preparation with a strong focus on British-German, American-German, British-Austrian and American-Austrian inheritance cases and probate applications. We also know our way around the succession and inheritance tax laws of France and Spain.

German succession and inheritance tax law expert Bernhard Schmeilzl regularly gives presentations and conducts inhouse seminars for British and American lawyers and accountants who advise clients who possess foreign assets or who have relatives abroad who shall inherit or receive gifts or legacies. More on these seminars here: Advising Clients with Assets Abroad

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.

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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 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.

Does a German Last Will & Testament become void if the Testator later marries or has Children?

Not automatically, but the surviving spouse and/or the child may challenge the Will for being “outdated”. The German legal term is “Anfechtung” according to section 2079 German Civil Code (Section Wills & Probate), which states:

Section 2079 German Civil Code

Avoidance for omission of a person entitled to a compulsory portion

A testamentary disposition may be avoided if the testator has omitted a person entitled to a compulsory portion who is in existence at the time of the devolution of the inheritance, the existence of whom was unknown to the testator when he made the testamentary disposition or who was born or became entitled to a compulsory portion only after the making of the testamentary disposition. Avoidance is excluded to the extent that it is to be assumed that the testator would have made the disposition even if he had known the circumstances.

This statute of German probate law is a so called “Auslegungsregel” (i.e. statutory rule of interpretation of a Will). It is meant to clarify this situation: The testator has made his or her Will at a time when he/she was not married, then later marries but does not modify or revoke the Will, then dies. In these circumstances, if German succession law applies, the Will shall be interpreted as being valid but voidable (anfechtbar). The surviving spouse may challenge this Will by making a formal declaration of avoidance (Anfechtungserklärung) to the competent German probate court. This must be done within a statutory deadline of one year from when the person entitled to challenge the Will has obtained knowledge of the grounds of avoidance.

The same rule applies if the testator has children after setting up a Will under German law. Then the child has the right to void the German will which the testator has created at a time when he or she did not know about this child.

However, this rule of interpretation does not apply if there is no room for such interpretation. If, for example, the testator has explicitly stated in the German Will that this Will shall remain valid even if he or she later marries or has (further) children, then section 2079 German Civil Code cannot be invoked. If the Will itself is silent on the matter but the testator has mentioned that the Will shall remain valid in such situations, then it becomes difficult. Such contentious probate cases can drag on for years in German courts and usually the party invoking section 2079 German Civil Code prevails.

Spouses in Germany often create mirror wills (Berliner Testament, Ehegattentestament) and explicitly preclude (ausschließen) this section 2079 BGB, because they want to protect themselves against the Will being voided if the surviving spouse later marries again or has additional children.

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.

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.

 

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.

English Speaking German Lawyers and Litigators based in Munich

Experienced German Legal Counsel for British and American Clients

Since 2003, the German law firm Graf Partners LLP with its headquarters in Munich specialises in British-German and US-German legal cases. Not only are the German lawyers at GP fluent in the English language, but they have many years of practical experience gained by working for commercial and private clients from Britain and the USA. From conveyancing of German property, drafting international agreements, representing foreign clients in German courtrooms and preparing expert reports and legal opinions on German law for British and American courts. We know what English and American clients expect from their German legal counsel. We do not simply explain the German law but we focus on the – sometimes very significant – differences, especially when it comes to German civil procedure rules.

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.

While Bernhard is well acquainted with the ways of English solicitors and barristers and their respective ways to go about a case, he is even better equipped to team up with United States attorneys at law. And this is not just from from watching the TV series Suits or Better call Saul (which he does), for that matter. Bernhard has lived, studied, coached baseball and worked in the USA on a number of occasions. His history of extended stays in the United States goes back as far as 1990 and 1993, when George Bush (the father) was President. Bernhard can therefore rely on a network of friends and business partners across the USA, especially in New York and New Jersey as well as in California.

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:

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:

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:

Important Facts on German Laws of Succession and German Probate

Download the free brochure provided by the legal experts on international wills, cross border probate and British-German or US-German estate administration

German lawyer Bernhard Schmeilzl, LL.M. (Leicester) specialises in British-German and American-German inheritance law ever since his admission to the German bar association in 2001.

cover-brochure-german-probateTogether with his team of British and German succession and probate law experts he has compiled an easy to understand brochure “German Probate” which provides essential information on German inheritance law to British Solicitors and US lawyers as well as executors and administrators who need to deal with assets in Germany or who are faced with having to interpret German Wills. The brochure explains German intestacy rules, formal requirements on how to set up a German Will and the basics of the inheritance tax system. It is available for download here: German-Probate-and-German-Inheritance-Tax.

Some of the legal facts on German law explained in the brochure are:

  • Under German probate law, 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.
  • German heirs are personally liable for all debts of the deceased! In order to avoid personal liability they need to actively renounce their inheritance within 6 weeks of notification (6 months in cross-border cases).
  • Testamentary trusts are rarely used in Germany since they do not offer any advantages like under English law.
  • Post-death variations are not accepted by the German Tax Authorities. In fact, a deed of variation is most likely to be counterproductive as it may trigger additional taxes.
  • Payment of inheritance tax is independent of the application for a German Grant of Probate. However, banks will not release funds to foreign beneficiaries unless the German Tax Authorities have issued a clearance certificate (Unbedenklichkeits-Bescheinigung).
  • Joint wills by spouses in one single document (Ehegattentestamente) and mutually binding testamentary agreements (Erbverträge) are allowed under German probate law and are commonly used.
  • The appointment of an executor in a will is possible but not very common.

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:

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

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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 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.

What are the German Forced Share Rules?

If German Succession Rules do apply (and this is the case more often than one might think), then the surviving spouse, the children and even the parents of the deceased do inherit a portion of the estate no matter what, i.e. even if the deceased had expressly disinherited them in his Will!

Under German law there exist strict forced share rules (Pflichtteil). In cases where the surviving spouse and/or close relatives, namely descendants or parents, have been disinherited, they are entitled to bring a pecuniary claim against the testamentary heirs. The forced share consists of 50 per cent of the pecuniary value (cash equivalent) the disinherited person would have received had the deceased died intestate, i.e. the share he or she would have been entitled to by statute. Such claims even extend to gifts made by the deceased during the last 10 years of his or her life time.

Again: it is a purely pecuniary claim that may be brought against the testamentary heirs and not a claim to a share of the actual property belonging to the estate. Thus, the better term may actually be “compulsory portion”.

Details about this German forced share and how it is calculated are explained in the post Disinherit your no-good children? Not so easy in Germany and in the free brochure on German Probate and Succession Laws: Download Brochure.

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.

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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 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.

How to Access German Assets without having to go through German Probate

There are Practical Alternatives to German Wills

German law provides for a number of legal tools which enable a testator to transfer some or all of his assets outside of the German probate rules, i.e. the transfer will then happen automatically upon the testator’s death. This has many advantages: No need for a will, nor a German grant of probate, i.e. no waiting period and no probate costs.

These tools are “conditional transfers in contemplation of death” (lebzeitige Verfügungen von Todes wegen) and are neither testamentary dispositions nor lifetime gifts. They are an ideal means for British citizens to transfer assets they may hold in Germany since their beneficiaries are not subject to German probate rules. Some of the options available under German inheritance law are:

  • Vertrag zugunsten Dritter auf den Todesfall, i.e. a provision for the benefit of a third party conditional upon the event of death.
  • Transzendentale Vollmacht, i.e. a power of attorney (power of authorisation) valid beyond death. This is a very popular legal instrument often used to avoid the need for German grant of probate.
  • aufschiebend bedingte Verfügungen / Übertragungen, i.e. a transfer of title conditional upon the event of death.

In order to avoid any misunderstanding: These transfers of assets outside of the estate are still subject to German inheritance tax and the German banks will require to see an official tax clearance certificate (more here) before releasing assets located in Germany.

cover-brochure-german-probateFor more information on German Probate, German Compulsary Share Rules and German Inheritance Tax please download our free brochure: German-Probate-and-German-Inheritance-Tax.

Or read the related post “Efficient Transfer of Foreign Assets” and the additional links listed there.

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

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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 probate matters, including the representation of clients in contentious probate matters. We are experts in international 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.