First, you need to make the right choice about which German Grant to apply for
The German equivalent of a UK Grant of Probate is the Certificate of Inheritance (Erbschein). Less common is its “little brother”, the Certificate of Executorship (Testamentsvollstreckerzeugnis). Both documents are issued by the Nachlassgericht which is the probate department of the respective local District Court (Amtsgericht).
Who needs an Erbschein?
As we have explained here, German law applies the principle of direct and universal succession. This means that the estate (inlcuding all debts!) passes automatically to the heirs and there is no need for an active transfer of assets. Section 1922 of the German Civil Code states:
“Upon the death of a person (devolution of an inheritance), that person’s property (inheritance) passes as a whole to one or more than one other persons (heirs).” Thus, the German law of succession does not recognise a “personal representative”. An executor or administrator is simply not necessary. Due to this principle of direct and universal succession, the Erbschein does not create a right for the heirs. It is merely declaratory, i.e. confirming a legal right which already exists. So the heir does not necessarily need to obtain a certificate of inheritance if he/she has access to the assets anyway, for example because the deceased and the heir owned a joint bank account.
However, in practice, the German land registry (Grundbuchamt), banks, insurance companies and other debtors of the deceased will want to be certain about who the heirs are before they, for example, alter the name of the property owner in the land registry, disburse money or transfer funds. Thus, as in the UK, these institutions will ask for an Erbschein (certificate of inheritance) as evidence that the person named therein is entitled to receive the assets.
Notarial Will serves in lieu of Erbschein
There is, however, one important exception to the rule that the heirs need to present an Erbschein to get access to the assets: if the testator has made his/her will before a German notary, a so called “öffentliches Testament”.
In Germany there are two ways to create a valid will: (i) by way of a fully handwritten and signed document (so called “eigenhändiges Testament”, i.e. holographic will), which is most popular because it does not create any costs and is easily done; or (ii) by seeing a German notary who creates a deed which is then signed by the testator and officially registered. Such a notarial will is then (after the death of the testator) used in lieu of an Erbschein. In international inheritance cases this can sometimes create problems, when a foreign probate judge does not understand why the German heirs cannot present a German Erbschein.
Example of a German Erbschein
This is what a German Erbschein looks like: Sample German Grant of Probate Erbschein The example is taken from a rather complicated case where a German citizen was resident in the UK and died without leaving a will. Since there were no spouse or children this resulted in, according to German intestacy rules, a community of heirs (Erbengemeinschaft) consisting of nine persons (nieces, nephews and cousins). You can see from the “gemeinschaftlicher Erbschein” that there is no personal representative (executor or administrator). The Erbschein only lists the heirs and their share of the estate. For comparison here is an example of an English Grant of Probate.
In real life, a community of heirs often leads to problems because all co-heirs must act unanimously, i.e. by principle of the unanimous vote. Unless all co-heirs agree upon a transaction, e.g. the sale of a property, the community of heirs is stalled.
How is the Erbschein obtained?
Every person who thinks he/she is a rightful heir of the deceased may apply for an Erbschein. In most cases, the paperwork is much less than in the UK because – in contrast to the UK – the issue of inheritance tax is NOT directly linked to probate. This is due to the fact that German inheritance tax law does not levy tax on the estate as such, but instead taxes each individual heir separately. Each heir is individually and personally responsible for filing an inheritance tax declaration. Consequently, German inheritance tax law does not have one single nil-rate band. Instead, each heir has his/her own tax exempt amount available. The exact amount depends on the degree of kinship. Thus, the German IHT system is comparable to personal income tax.
While the German probate court (Nachlassgericht) is not concerned with inheritance tax matters, the heirs must still submit a rough inventory of the estate (Nachlassverzeichnis, which looks like this: Inventory_of_Estate_for_Probate_Fee_Calculation_Germany) which the court uses to calculate its fees. The Amtsgericht sends a copy of this inventory to the German tax office so that German treasury can look forward to receiving the individual tax declarations by the heirs. Should they “forget” to submit these forms they will sooner or later be sent a friendly reminder by the local inheritance tax office. The German IHT form is also available on the internet and looks like this: German Inheritance Tax Form Formular_Erbschaftsteuer_2014
Furthermore, the heirs / executors may face another obstacle before they can access certain assets like bank accounts or insurance payments: Section 20 para. 6 German Inheritance Tax Code (§ 20 Abs. 6 Erbschaftssteuergesetz) regulates that banks and insurance companies are liable for unpaid taxes if they allow the transfer of assets into a foreign country. Therefore, banks are very hesitant to allow access to such funds and always will ask for an “Unbedenklichkeitsbescheinigung”, i.e. a tax clearance certificate. The banks usually request such a certificate of non-objection as standard procedure in probate matters where foreign beneficiaries are involved.
If and when one or more persons apply for an Erbschein the Nachlassgericht must determine who has rightfully become an heir and how many of them there are. If there is more than one heir they are collectively called an Erbengemeinschaft (community of heirs), as in the example Erbschein above.
Succession obviously depends on whether the deceased has left a valid will (everyone who finds a document that could be regarded as a will is obliged by threat of punishment to immediately submit this to German probate court) or whether the heirs must be determined by German intestacy rules, sections 1924 to 1928 Germany Civil Code. We deal with Disputed Wills and Contentious Probate in Germany in a separate posting here.
There is no specific form to apply for an Erbschein. The heir collects all necessary information and then makes an appointment either at probate court itself or at a notary (I recommend the latter because a notary is usually more flexible with appointment dates). The fees are the same for both alternatives since the fees are based on the value of the estate and are laid down in a statutory table (Gebührenordnung). Part of the application is a declaration in lieu of an oath which has to be notarised by a court official or the notary. Abroad, this declaration can be notarised by an authorised consular officer at a German Consulate General or Embassy.
As German is obviously the official court language, the text of the application will be accepted in German only. If the applicant is not in sufficient command of German, the smart thing to do is to select a notary who is fluent in English and can translate the document. Also, you will need to provide the competent German probate court with certified true copies of any required personal documents.
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:
- Most Germans die without a Will (German Intestacy Rules)
- Formal Requirements to set up a valid Will in England, Scotland and Germany: What are the Differences?
- The Perils of German IHT and Gift Tax
- Careful with Deed of Variation if Estate comprises Foreign Assets
- Basics of German Inheritance and Succession Law
- Executors and Trustees in German Inheritance Law
- How to apply for a German Grant of Probate
- The Infamous German Community of Heirs – And how to avoid it
- Germans Heirs are Personally Liable for Debts of the Deceased
- International Wills and Estate Planning for British-German Families
- Prove German Wills for English Probate
- Disputed Wills and Contentious Probate in Germany
- Disinherit your no-good children? Not so easy in Germany
- Don’t be afraid of Clients with Foreign Assets!
- Can foreign Taxes be set off against UK Inheritance Tax?
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. 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.