What English Solicitors (and U.S. lawyers) tend to overlook when preparing Wills for overseas Clients
We see cases like this all the time:
- A British (or American) expat lives in Germany for a few years and unexpectedly passes away while having his or her permanent residence in Germany.
- A British (or American) family moves to Germany permanently but keeps their English wills in place. Or they ask their English solicitor to prepare a new will for them although they now live in Germany.
In all these cases, the English will as such remains valid (see here). However, what English solicitors rarely know is that German forced share rules (Pflichtteil) do apply if the deceased had his or her last habitual residence in Germany — UNLESS the testator has explicitly chosen English succession laws to apply.
A solicitor preparing a will for someone living outside the UK must always discuss with his/her client whather such a choice of succession laws clause is desired or not. The outcome can be vastly different!
A simple example:
An English couple relocates to Germany. They have respective wills in which they appoint each other as the sole beneficiary. They also have a child (it does not matter where that child lives, by the way).
Alternative 1:
The will does not contain a choice of succession law clause. Then German succession laws do apply, including the dreaded Pflichtteil rules. While the will remains valid, i.e. the surviving spouse does become the “Alleinerbe” (sole heir, sole beneficiary), the child is entitled to a minimum of 1/4 of the deceased’s estate. Payable immediately.
Alternative 2:
The English couple add a clause to their respective wills in which they state:
“I am a British citizen. Under the rules of the EU Succession Regulation, the laws of the country where I have my habitual residence apply to my estate. I do, however, wish English law to apply to my estate and am thus hereby actively making a choice of applicable succession laws.”
Now, German law has been opted out of and the child does not have a Pflichtteil claim.
A common Misunderstanding
Please note, however, that this right to choose the applicable succession laws do not extend to inheritance tax laws. National inheritance tax laws are what they are and cannot be opted out of by simply putting a clause into one’s will. Otherwise, everyone would simply opt for Austrian inheritance tax laws, because Austria does not levy IHT. That would be too easy.
Graf|Legal specialises in Anglo-German and US-German Law
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:
- Brochure on German Probate and German Inheritance Tax (in English)
- Most Germans die without a Will (German Intestacy Rules)
- Does a German Last Will and Testament become void if the Testator later marries or has children?
- 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
- How to access German assets without going through Probate
- 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.
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 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.
