What is a “polizeiliches Führungszeugnis”?

And when do you need it?

The German “polizeiliches Führungszeugnis” is the equivalent of the British “enhanced criminal record certificate” as defined in sec. 115 Police Act 1997, sometimes also referred to as “certificate of conduct”, “good-conduct certificate” or “police clearance certificate”.

The Führungszeugnis is an official document issued on special green paper by the German Bundesamt für Justiz (Federal Office of Justice) in Bonn and looks like this:

The document lists criminal offences above a certain threshold, usually if someone has been sentenced to payment of a criminal fine of 90 daily rates (Tagessätze) or more. There are exceptions with regard to juvenile delinquents. Sex crimes, cases of child abuse or neglect are especially relevant, because anyone who wants to work with children, be it in a kindergarden or a sports club, must present an enhanced police clearance certificate before he or she is allowed to do so. The criminal offences are recorded in the German Bundeszentralregister and the Führungszeugnis is an extract from said central register.

What do your need a Führungszeugnis for?

The German criminal record certificate is required in various circumstances, either because you apply for a job in Germany and the (potential) German employer asks you to provide such a Führungszeugnis. Or you plan to open a restaurant in Germany and wish to obtain a liquor license. In practice, there are three different types of Führungszeugnis: a simple police clearance certificate (einfaches Führungszeugnis), an enhanced certificate (erweitertes Führungszeugnis, as in the example above) and a behördliches Führungszeugnis for official use. The difference is in the content and the degree of detail that such certificates show.

More information on what a German polizeiliches Führungszeugnis is and how to apply for one is available on the website of the Federal Office of Justice here.

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.

Abuse of your Web Shop?

What to do if your online shop is attacked by criminals: an IT lawyer’s view.

In times of digitalization it is extremely attractive to offer your products online – this has several advantages. No sales room is needed, the offers are available around the clock and there are no annoying sales talks. Sounds good at first? Of course, it is! As long as there are no problems with the web shop…

A real life example of how an online shop can be hacked

Here’s what happened to one of our clients, who runs an online shop in Germany. The client was faced with complaints by angry customers who wanted to know where the ordered goods were which they had ordered through an online shop weeks and months ago. Completely surprised by this, our client had no record of such orders.

What had happened?

Fraudsters have picked our client’s online whop to completely rebuild his web shop in every detail. In other words: They cloned his online shop. The product descriptions, the product pictures and an extremely appealing layout were adopted. Even the imprint was taken over to give the impression that the company of our client operates the website here.

After the order process had been completed, the website – which of course had a completely different domain – displayed a summary of the order and immediately asked the customers to pay. Since the order entry seemed fully legitimate, many customers also promptly paid. It was not even surprising that the payments should be made via bank transfer and the IBAN did not start with DE (for Germany). In reality, of course, the money went to a bank account somewhere in the Baltic States, which had nothing to do with our client.

The customers, which had fallen for this online fraud, which had nothing to do with our client, were still mad at our client. Obviously, our client could not ignore this web shop identity theft.

But what is to be done in concrete terms in the event of such abuse?

First of all, a so-called Whois query should be carried out to find out who is behind the corresponding page. However, it is important to know that the information can be manipulated very easily in the context of a Whois query. What is not so easily manipulated is the registrar’s entry. Based on this information we were able to find out that the website is hosted in the USA.

Okay, but then how does this information help me?

With the information, i.e. who the registrar is, it is very easy to contact the website provider. Here we could quickly submit a so-called DMCA takedown request, so that the website is taken off the net.

Is such a DMCA takedown request enough to take a website off the net?

Usually, yes. This registrar was (to put it mildly) a particularly lazy registrar. This required the involvement of the U.S. registrar regulatory agency (ICANN).

What does ICANN do? 

It is ICANN’s job to address these issues. After we filed the complaint, that is, the registrar did not move, we received a commitment within 96 hours that the problem would be addressed. With this trick, it is quite easy to get even the laziest registrar to deal with the problem.

Within four days after we contacted ICANN, the website was already offline.

Do I have to pay attention to anything in such a procedure? 

Yes, there are many things to consider. For example, it should be clear how to write a DMCA takedown request. Also, it is to know what happens if the registrar is located in a country other than the USA (this is already much more complicated in Russia) and much more.

In such cases, it is strongly recommended to consult a lawyer experienced in IT law if you need or want to remove the website from the Internet quickly.

Especially in case of problems with a foreign registrar it is hardly possible to get the situation under control quickly without a lawyer – with appropriate experience.

German IT & Online Lawyer Stephan Hendel

If you have any questions about IT law, data protection, online commerce or other internet related legal issues, do not hesitate to contact German lawyer and IT law expert Stephan Hendel.

Having a Canadian family background, Stephan is fluent in English and is well aware of the different business mentalities of Anglo-American as well as German entrepreneurs. Our German and international clients appreciate Stephan’s pragmatic hands on approach.

Within the Cross-Channel-Lawyer network, Stephan is the expert for all legal matters surrounding IT, cyber law, data protection issues and compliance with German law.

For more on German business and corporate law see these posts:

British Solicitors: better brace for a cliff-edge Brexit

“Brexit not the end of the world”

Theresa May recently stated that a no-deal Brexit ‘wouldn’t be the end of the world’. How reassuring! If you are an English or Scottish solicitor who specialises in international law, such a rock hard Brexit may, however, well be the end of your career as an internation lawyer.

Because in case of an ever more likely no-deal scenario, English solicitors will no longer be able to provide legal services in the European Union. This will probably even be true for English solicitors who are based in Europe and currently work here as Registered European Lawyers. A “cliff-edge Brexit” would void these solicitors’ professional qualifications which are currently recognised in the EU.

Brexit implications for Britain’s legal sector

Already in March 2017 (!), The Law Society has warned of the consequences of a hard Brexit as being “devastating for the UK legal sector. Back then, a no-deal Brexit was not even conceived as a very realistic scenario. Instead, Brexiteers made statements like these: “The free trade agreement that we will have to do with the European Union should be one of the easiest in human history.

A no-deal Brexit became much more likely since, which even the “Leave” friendly Sun does acknowledge: https://www.thesun.co.uk/news/6820080/brexit-news-no-deal-what-does-it-mean-uk-theresa-may. But even if some kind of a last minute deal is reached, it’s focus will not be on the services sector, because in Theresa May’s “soft-Brexit Chequers deal” services, which cover 80 per cent of Britain’s economy, are largely skirted over. The cabinet agreed to retain “regulatory flexibility” and accept less EU market access as a result.

Thus, if you are a solicitor with business interests abroad, you might want to plan ahead. Our firm specialises in Anglo-German legal issues and we currently assist a number of English solicitor firms to safeguard their German business. If you are a British law firm with clients in Germany and wish to protect your German business interests, we will be happy to advise and assist.The options range from securing an existing German law firm as a partner firm to creating a cross-border legal entity.

More on Brexit and its implications for UK law firms here.

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.

German Probate: What to do if a beneficiary (co-heir) cannot be found?

Does anyone know where Great-Granduncle Fritz lives?

In some probate cases (Nachlassverfahren), especially if a decedent had no children, no surviving spouse and no surviving siblings, the next of kin cannot be located, either because the relevant persons have died so long ago that the closest living relatives of the testator can’t be identified (e.g. died in the war) or because they have moved to another country and nobody knows their whereabouts.

Even if only one of several beneficiaries (co-heirs) is missing, this creates a serious problem for the other co-heirs in Germany, because it blocks the distribution of the German estate (Nachlassverteilung) among the members of the community of heirs (Miterbengemeinschaft).

While each member of the community of heirs is able to apply for a German Grant of Probate (Joint Certificate of Inheritance, i.e. a Gemeinschaftlicher Erbschein), such Erbschein will not do them much good. This is because the Erbschein lists all members of the community of heirs (Erbengemeinschaft) and thus each bank, each insurance company, each broker and the German land registry will demand all members of the community of heirs to co-sign any documents. In other words: a community of heirs can only act jointly, section 2040 German Civil Code (BGB).

We know who the (co-)heir is, but not where he or she lives

In this situation, it will not help to consider curatorship (Nachlasspflegschaft) for the German estate pursuant to sec. 1960 German Civil Code. A curator of the German estate is appointed by the German Probate Court only in cases when the heir(s) is (are) completely unknown and need(s) to be identified. More on this here.

If, however, it is well known who the heir is, but the same just cannot be located and contacted, the legal requirements for appointing a curator of the German estate are not fulfilled.

In these situations, i.e. for a known heir of adult age whose residence is unknown, a so-called “Curator in absentia” (“Abwesenheitspfleger”) has to be appointed by the competent German Guardianship Court (“Betreuungsgericht”), see section 1911 BGB. Thus, in these constellations, the task is not to legally assess who the beneficiary is but instead to protect the interest of a known beneficiary who is currently absent and cannot be contacted.

The German Guardianship Court (Court of Protection) is a department of each German Local Court (“Amtsgericht”), as are the German Probate Registries (Nachlassgericht) and the German Land Registries (Grundbuchamt).

The court appointed curator in absentia protects the absent heir´s interest in the estate. The main duty is to preserve the inheritance for the absent heir until he or she can be contacted. In practice, this means that the monies will be kept on a separate escrow account. If, however, there are immoveables (property) in the estate, matters get complicated, because the curator in absentia will only agree to selling such property / real estate when absolutely necessary, for instance to repay the deceased´s debts. If such a sale is not necessary then the absent co-heirs effectively blocks the distribution of the estate. The curatorship ends once the heir is found and is able to deal with the inheritance, sec. 1922 BGB.

Summary: Estate Curatorship under German Law

The difference between these various forms of curatorship is that a Curator for unknown heirs (Nachlasspfleger für unbekannte Erben) acts on behalf of one or more persons, not exactly knowing for whom. In contrast, the Curator in absentia (Abwesenheitspfleger) is appointed to represent a well-known specific person who simply cannot be contacted.

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 enter on the “probate” in the search box above.

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 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.

Entangled in German Probate Proceedings?

Renounce Inheritance against Compensation Payment

In this post, we reveal a simple trick how to be released from the duties and obligations of being a German co-heir while still obtaining a portion of the German estate. The buzzwords are “Verpflichtung zur Ausschlagung gegen Abfindung“, i.e. contract to renounce a German inheritance against compensatory payment (make-up pay).

Background: The Basics of German Probate and Estate Administration

In previous posts, we have explained German succession rules, the principle of direct, automatic and universal accession (Prinzip der Universalsukzession) and the so called Community of Heirs (Erbengemeinschaft):

Important Facts on German Laws of Succession and German Probate

– The Infamous “Community of Heirs” in German Inheritance Law

In case you have made in inheritance in Germany, either because you are mentioned as a beneficiary in someone’s will or due to German intestate succession rules, you may find yourself confronted with complicated and costly probate issues. You need to (co-)instruct a german probate lawyer to file the probate application, to submit the German IHT forms and to deal with the German estate. Then you are expected to fly to Germany to give the oath at the local probate registry. Worst case, you dislike the co-heirs and cannot come to terms with them, for instance about whether to sell the German property.

“Let me out of here!”

You can get rid of all these issues by simply renouncing the inheritance, of course (more here). But then you lose everything, right? Well, not necessarily. You can make an offer to the other beneficiaries (co-heirs):

“I will renounce my inheritance if you pay me X amount as compensation for my share in the German estate.”

If the co-heirs are smart, they will be very tempted, because this makes probate proceedings easier and there will be one less person to deal with when later distributing the estate.

Under German law, such a “Vertrag über Erbausschlagung gegen Abfindung” is permitted and — surprinsingly — it does not even need to be in notarial form. While even an oral contract would be valid, such an agreement to renounce against compensation payment should obviously be made in writing.

To avoid misunderstanding: the renunciation itself must then later on be made before a notary or German consular officer (see. section 1945 German Civil Code). But the agreement in which someone enters into the obligation to (later) declare the renunciation does not have to be in notarial form (OLG Munich OLGE 26, 288; Gothe MittRhNotK 1998, 193).

But careful: This option is only available as long as the beneficiary who want to leave the community of German heirs has not already declared to accept the inheritance. Such acceptance can be made either by simple declaration or even by “telling behavious” (schlüssiges Verhalten), e.g. by accepting a partial payment from the estate or by taking certain assets which are part of the estate. So if you consider to leave the community of heirs against compensation, do not prematurely send out letters stating “I have inherited”.

How much do I get for my share in the German estate?

How much the other beneficiaries are willing to pay you to leave the community of heirs and whether the co-heirs shall have to pay that amount before you then formally declare the renunciation or vice versa can be freely negotiated between the heirs. The parties can also agree on partial payments, half at the time of signature of the renunciation obligation agreement, the other haft after the renunciation has actually been declared vis-a-vis the German probate court.The amount can even be left open if the estate needs to be professionally evaluated first. Then the parties can agree on some formula, e.g. 20% of the net estate after costs and taxes.

Our firm has drafted hundreds of such agreements and will ge glad to assist.

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 enter on the “probate” in the search box above.

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 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.

Does anyone know about Great-Granduncle Fritz?

What to do in Germany when an Heir (Beneficiary) cannot be found

In Germany, due to the principle of universal succession (which is governed by  §§ 1922, 1937 BGB of the German Civil Code), it is the heir´s duty to look after the estate. Under German inheritance law, there is no personal representative to take possession of the estate. The German Probate Court (“Nachlassgericht”) will also not interfere with the administration of the estate. The Court will only act if someone applies for a German grant to be issued. Then it will assess whether the person(s) applying for the grant are the rightful heirs. While, in theory, the German probate court is obligated to actively research the legal heirs (Amtsermittlungsgrundsatz), in practice the court will merely demand the probate applicant to submit the relevant information and necessary documents (i.e. death certificates, birth certificates, marriage and divorce certificates).

How to resolve the problem of unknown relatives in German Probate Applications

Problems often arise when the deceased died intestate and had no close relatives who are willing and able to apply for an official certificate of inheritance (“Erbschein”) from the Probate Court and to take possession of the estate. In quite a large number of inheritance cases, distant relatives often have no contact with or don´t even know about their kinship and the potential heirship that accrues to them. The grandfather or great-grandfather generation often died or went missing in the war, persons registers were also sometimes destroyed due to the war. In these cases, it is very hard to demonstrate to the German probate court who the closest living relatives of the decendent are. Researching these relatives sometimes takes years during which time it is unclear who is entitled to the estate.

Who protects the German estate while the next of kin are being investigated?

If this happens, according to section 1962 BGB, the German Probate Court has a duty of care to safe-keep the estate and initiate an official investigation of heir(s). According to section 1960 para. 2 BGB, there are various legal protective measures which the court can take, such as affixing of seals, payment of estate monies into court for safekeeping, deposition of securities or imposing a catalogue of the estate. What needs to be done in a specific case is up to the Probate Court´s discretion. In practice, the route most often taken is for the court to appoint an official curator for the estate, section 1960 para. 2 BGB (“Nachlasspfleger”). Read more on “Nachlasspflegschaft” in cases where the estate may be indebted in this post.

How does the Court appointed German Curator proceed?

The curator, who is usually a lawyer specialised in matters of succession law, is appointed by the competent German probate registry (Nachlassgericht) according to §§ 1962, 1789 BGB. This is what a German court order appointing an official estate curator looks like:

German Court Order Appointing an Estate Curator (Bestellung eines Nachlasspflegers für unbekannte Erben)

The curator is instructed (and authorised) by the German probate registrar to take possession of the entire (German part of the) estate in order to safe-keep it on behalf of the (currently still unknown) members of the community of heirs. His duties are listed in the German Civil Code in sections 1806, 1812 ff. BGB.

What does “Ermittlung der Erben” mean?

Furthermore, the curator has the obligation to start an investigation to identify and contact all co-heirs according to the order of succession which is explained in this post: German Intestacy Rules.

As a first step, the curator will draw up a “family tree” chart in order to get an overview about the kinship of the deceased. If there are no close relatives, it may get difficult to identify the true heirs. Distant relatives, who potentially never knew the deceased may have moved to foreign countries or they may not respond because they think the curator is a fraudster. A curator must therefore be skilled in “detective work”.

Once the curator has been able to ascertain the next of kin who – if more than one person – form the community of heirs (Erbengemeinschaft), each one of them is entitled to apply for an heir´s certificate (§ 2353 BGB) at the Probate Court, which then certifies their respective share in the estate of the deceased. The Probate Court will identify the kinship by birth, marriage and death certificates. When heirs are citizens of another country, the Probate Court will, at least, require legalised copies plus certified translations of the same. It is the duty of the curator to take care about the regulatory matters, to contact family members in Germany and abroad and to collect all necessary documents for the probate application.

Once the certificate of inheritance is issued, according to § 2365 BGB, there is a legal presumption of its veracity, i.e. unless challenged by anyone, the beneficiaries mentioned in the vertificate are able and permitted to administer and distribute the estate among themselves.

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.

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 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.

Post-Contractual Non-Compete Clauses in German Employment Agreements

… and how to get rid of them

Many employers want to prevent their employees to work for competitors when the employment ends. Under German labor law, this can be achieved by putting a post-contractual non-compete clause (nachvertragliches Wettbewerbsverbot) in the employment contract. The typical standard wording for such a non compete clause would be this:

The Employee shall not, for a period of 24 months following the end of the employment and within the territory ….., directly or indirectly, with or without remuneration, render services for a competing enterprise either as managing director, employee, or consultant, which are essentially similar to the services which the Employee has rendered to the Employer during the 24 months prior to the termination of the employment. The Employee may not establish any participation in a competing enterprise either, if such participation exceeds 5 % of the capital of such enterprise or enter into competition with the Employer as being self-employed. Competing enterprises are considered those which supply ………

Under German law, there are strict limits on how far an employer can go with such a non-compete obligation because the employee shall not be unreasonably restricted in finding a new job. Therefore, the maximum period is 24 months. If the non-compete period contained in the employment agreement is longer, the entire clause will be considered excessive and thus void. Also, the territory to which the non-compete obligation applies should be limited to what is absolutely necessary to protect the employers business interests. Defining the territory as “all of Germany” or “the European Union” or even “all over the world”, is extremely dangerous and probably also unnecessary.

Also, and this is often completely overlooked or even knowingly ignored by US or British employers, any such post-contractual non-compete obligation of a (former) employee is only binding and enforceable, if the employer pays the employee a financial compensation, the so called “Karenzentschädigung“.

This compensation must be paid during the entire non-compete period and must amount to at least 50% of the latest salary of the employee (including any bonus payments and gratuities).

A typical wording for this section of the employment agreement would thus be:

During the non-compete period the Employer shall pay to the Employee a compensation of … , i.e. 50% of the Employee’s last contractual salary. The statutory legal provisions, in particular secs. 74 et seq. HGB (German Commercial Code) shall apply.

In order to give the non-compete clause teeth, i.e. make the employee care about any breach, the contract should contain a penalty clause. Here, again, there are limits on what an employer can put in the contract and still expect it to be enforced by German courts.

What if the employer changes his mind about the non-compete clause?

Sometimes an employer no longer sees the need to bind an employee by a post contractual non-compete clause. Either because he does not feel that the employee could hurt him by working for a competitor. Or because he simply does not want to pay the Karenzentschädigung.

In such a case, there are two ways to go about this:

(i) The employer can waive the rights resulting from this clause (“auf das Wettbewerbsverbot verzichten”). This must be done in writing and BEFORE the employment has ended. However, the bad news is that the waiver does not come into effect with immediate effect. Instead, the non-compete clause stands for another 12 months. In other words: If the employer notifies the employee (in writing) that the employer no longer wishes the non-compete obligation to apply, this waiver only becomes valid after 12 months have expired. This means that if a contract contains a 24 month non-compete period and the employer declares to waive sied clause immediately before he terminates the employment, then the non-compete period is effectively reduced  from 24 to 12 months, but the employer does not get rid of it entirely.

Another example: If the employer notifies the employee in January 2018 that he waives the non-compete clause and then terminates the employment 12 months later, then the employer does not have to pay any Karenzentschädigung.

(ii) The other option is that both parties amicably agree to lift the non-compete clause. The employee will of course only agree to this if he or she has already received an interesting job offer that he or she would otherwise be prevented from accepting due to the non-compete clause.

More on German Labour Law, Employment Agreements, Contract Drafting and Employment related Litigation in Germany is available in the posts below and in the brochure “Living and Working in Europe

 

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.

If your Parent or Child passes away while having been resident in Germany…

… then German Succession Rules do apply to the Estate!

Since August 2015, all EU members (except for UK, Ireland and Denmark) apply the same basic rule: The national succession laws of that country shall apply in which the decedent had his or her last habitual residence (EU Succession Regulation, EU 650/2012).

Thus, if your parent or your child has been permanently living in – for instance – Germany, France or Spain and sadly dies while having been resident there, then the national succession rules of Germany, France or Spain will govern the administration of the entire estate as well as the formal probate proceedings.

This can create some surprising results for everyone involved. Intestacy rules, for example, vary from country to country. And, even more astonishing for English relatives and their lawyers, many European countries know a concept of “forced inheritance” or “statutory share rules”.

Under French law, a fixed proportion of the estate (of at least one half) is inherited by the child or children of the deceased, irrespective of the testator’s wishes as expressed in his or her will (“forced inheritance”). In Germany, the situation is similar: the surviving spouse, children and even the parents of the deceased are entitled to make a significant financial claim against the heir(s), the so called Pflichtteilsanspruch (details here).

Not every British or Irish national who lives in Germany (or France etc) is aware of this. And even if they are aware, then some of these national succession laws are mandatory and indispensable. Thus the term “forced inheritance”. For the surviving spouses, children or parents of a British or Irish national who passed away in Europe, this means that they may be entitled to an interest in the estate even if they were disinherited. In other words: German or French succession laws grant the close relatives certain rights they would not expect to have under English laws.

There are, however, also unpleasant surprises and risks: Under German as well as French laws, for instance, the heirs inherit their share of the property of the deceased directly on death and also assume personal responsibility for the debts of the deceased (even if they are at first unaware of such debts) and the tax on inheritance.

In all international inheritance cases, the relatives of the deceased should thus obtain information on the local succession laws and probate rules to avoid risks of personal liability and to find out whether they are entitled to a forced inheritance.

For more information on probate as well as gift & inheritance tax in Germany, Austria and Switzerland 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.

– – –

The law firm Graf & Partners was established in 2003 and has many years of experience with British-German and US-German 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.

“I want to make a Gift to my Child in Germany…”

… but my son-in-law / daughter-in-law shall not benefit from such a gift or inheritance! Is that possible under German law?

Yes, it certainly is possible. Spouses are sometimes under the impression that they have an automatic entitlement to any gift the other spouse receives, whether as a lifetime gift or as an inheritance. Simply by virtue of the fact they are married. Under German law, this is certainly not the case.

Unless the spouses in Germany have entered into a specific marital property regime by way of an Ehevertrag, i.e. a marriage agreement (which is only possible in notarial form under German law), they find themselves under the statutory property regime (gesetzlicher Güterstand) of Zugewinngemeinschaft (community of acccrued gains). In spite of the somewhat misleading word “community” (Gemeinschaft), this does NOT mean, however, that everything that is gained by one spouse during marriage automatically also belongs to the other spouse. Instead, quite to the contrary, each spouse owns their own assets. Marriage per se, under German family law rules, changes nothing with regards to who owns what.

Therefore, unless the spouses decide to handle this differently (for example by paying everything into a joint bank account) the respective estates of the spouses remain separate. The meaning of “accrued gains” means that upon divorce (and only upon divorce), there is a (rather complicated) split of the accrued gains. However, even then, gifts are usually NOT relevant for such a split.

In short: Gifts (lifetime or testamentary) made by a British parent to their child being resident in Germany belong to the child and to the child only, unless the child voluntarily transfers the gift onto his or her spouse. If the British donor whishes to prevent such – from the donor’s perspective stupid – behaviour, the gift must be made in a more formal manner, i.e. the gift would have to come with legal strings attached. German law provides for such “protected gifts”.

Beware of German Gift Tax and Inheritance Tax

When you consider making a gift to your son ordaughter while they are resident in Germany, you must also consider that such a gift will trigger German gift tax, because the donee lives in Germany and is thus subject to the german Gift Tax and Inheritance Tax Code. We have expplained the implications of all that in these posts:

The Perils of German Inheritance Tax and Gift Tax

Everything about German Inheritance & Gift Tax at one Glance

Most Germans die without a Will

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:

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.

Harsh “Unfair Competition” Rules in Germany

The German Habit of sending out Cease and Desist Letters to Competitors

When you start trading in Germany you may be in for unpleasant surprises. The first letter your German subsidiary receives may likely be a formal cease and desist notice sent by your competitor’s lawyers. Why? Because under German unfair competition laws, every business has the right to formally demand competitors to fully comply with any and all German laws. And there are many such laws and regulations, some of which a British entrepreneur or even a British lawyer would never expect to exist.

Thus, everyone who considers starting business activities in Germany should read the German Act Against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb, UWG). Read it, shake your head, then read it again.

Some examples:

  • Every website and all stationary (letters, emails etc) must quote the complete business details including full business address, commercial register number, name(s) of director(s) and more. For details see section 5 UWG on incomplete information about a business trading in Germany.
  • Your website must have a so called “Impressum” which contains all relevant company information. Pursuant to section 5 Telemediengesetz the customer must be able to find the entire information about the offering company “easily” and “quickly”.
  • Websites must comply with German consumer protection laws and data protection laws; sounds harmless but the requirements are so complex that even most German companies are in breach of some aspects of these regulations.
  • Advertising material must specify its publisher.
  • All information on websites and advertising material must be truthful. You think that is understood and no problem? Well, here is an example for a typical mistake: We often represent British businesses which establish a German subsidiary and then make advertising statements like “25 years of experience” because the British parent company has been doing business for 25 years and they think they are allowed to make such statements for the entire group. They are not! Two weeks later, the German subisiary (a newly formed GmbH) is being served a number of cease and desist letters by German lawyers demanding to stop making this false and misleading statement, because the German subsidiary (which has made that statement in their ads) does not have 25 years of experience.
  • Another classic mistake is making an incorrect or incomplete price quotation on a website or on any advertisement material. Any mentioning of a price must clearly specify the final amount, the German VAT and any information about delivery costs. If not, this constitutes an infringement of section 1 II Preisangabenverordnung (PAngV) and in turn an infringement of the competition regulations (sections 3 and 3a UWG). Again you may think: How hard can this be? Well, take a look for yourself. It tells you a lot about German law that the regulation about how prices for goods and services must be presented is 8 pages long, see here.

Why are German Competitors (and their Lawyers) so aggressive?

These cease and desist letters (Aufforderung zur Abgabe einer strafbewehrten Unterlassungserklärung) are more than a mere nuisance because it is a peculiarity under German law that the recipient of such a lawyer’s letter must bear the competitor’s lawyers legal fees. Without any prior warning! The first letter you receive already triggers costs for you. Depending on the concrete breach these costs range from a few hundred to a few thousand Euros. And if you are unlucky, you will receive cease and desist letters from various german competitors with regard to the same breach.

Thus, German business lawyers are very interested in representing German businesses in that field, because with each such cease and desist letter they stand a good chance of earning a few thousand Euros. Their clients, your German competitors, are also keen of sending out such cease and desist letters, because it makes life difficult and expensive for new competing businesses, Ideally, this is a way for an established German business to prevent the market entry by a new company.

Do not ignore Cease and Desist Letters!

We note that British clients doing business in Germany tend to ignore such letters from competitor’s lawyers. This is a big and costly mistake, because if you to not acknowledge the breach and make a formal promise to the competitor to remedy the breach, then the competitor has the right to immediately sue your company. The competitor will apply to a German court by way of an Unterlassungsklage (action for an injunction). In most cases, the claimant will apply for an accelerated proceeding and ask for a preliminary injunction (einstweilige Unterlassungsverfügung), which – in obvious cases or if the British defendant does not properly respond – is usually granted by the German courts.

Then it becomes really dangerous, because if your company continues the breach (e.g. the website still infringes German laws or regulations) then very harsh penalties kick in. Depending on the size of your business (turnover in Germany), the number and duration of the breaches and other factors, the German court may order your company to pay a penalty (Ordnungsgeld) of up to 250,000 Euro.

Thus, in case you have been served an Unterlassungsaufforderung (cease and desist letter), you should immediately remedy the breach, then contact a German business lawyer and discuss what your options are. In most cases, if you have actually been in breach of German laws or regulations, you will have to (teeth-grindingly) acknowledge this breach (by sending them an Unterlassungserklärung) and to pay the opponent’s legal fees. In most cases, however, there is a chance to negogiate about the other side’s legal fees.

Such a formal acknowledgement (strafbewehrte Unterlassungserklärung) prevents the competitor from suing you. However, such an acknowledgment letter is only valid if it contains a promise to pay a contractual fine (Vertragsstrafeversprechen) in case you breach the same regulation again. Without such a promise to pay a fine the acknowledgement letter is worthless and you still rund the risk of being sued.

We certainly hope that we have not killed your desire to start trading in Germany. However, when you take up business activities in Germany, you should expect to be closely monitored by your German competitors. Thus, do not give them a chance to torture you with costly cease and desist letters.

By the way: It is not just competitors who may be observing you. German consumer protection groups (Verbraucherschutzorganisationen) also have the right to send out cease and desist notices.

For more on German business and corporate law see these posts:

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

Experts on German-British and German-American Legal Matters

Since 2003, the German business and corporate law firm Graf Partners LLP specialises in British-German and US-German legal cases. Our German business and corporate lawyers are native speaker level 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.

Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, with a focus on German-American and German-English commercial, corporate and also 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.