Estate management in Germany can be a complex process due to the variety of regulations and procedures governing the handling of inheritances and assets. Understanding the legal framework is crucial to ensuring a smooth transfer of assets and to complying with tax and legal obligations. Below are the key aspects to consider in estate management in Germany.
1. Legal framework of succession in Germany
Succession law in Germany is primarily regulated by the German Civil Code (Bürgerliches Gesetzbuch or BGB), which sets out the fundamental rules on inheritance, the rights of heirs, and the management of the deceased’s estate. This code defines who the legal heirs are, the possibility of drafting a will, and the rights of forced heirs.
2. Will and intestate Succession
In Germany, individuals can dispose of their assets through a will or allow the assets to be distributed according to intestate succession. A will can be drafted privately or before a notary, with the latter being more advisable to avoid future disputes. If there is no will, the estate will be distributed according to the legal order of succession, prioritizing the closest relatives.
3. Rights of forced heirs
A distinctive feature of German succession law is the existence of forced heirs (Pflichtteilsberechtigte). These heirs, typically the deceased’s children and spouse, are entitled to a portion of the estate even if they have been excluded in the will. This right is inalienable and must be considered in estate planning.
4. Procedure for accepting or rejecting the inheritance
Heirs have the option to accept or reject the inheritance. Acceptance is presumed if the heir does not reject the inheritance within six weeks of becoming aware of it. To reject the inheritance, the heir must make an explicit declaration before a probate court or a notary.
5. Inheritance Tax
Inheritance tax in Germany is another critical aspect of estate management. Heirs must pay tax on the value of the assets received, with the amount varying according to the degree of kinship with the deceased and the total value of the estate. There are exemptions and tax reductions that apply depending on the relationship between the heir and the deceased.
6. International estate management
For those with assets in multiple jurisdictions, estate management can be even more complex. Germany is part of the EU Succession Regulation, which allows for the choice of the succession law of the deceased’s nationality to govern the entire estate. This can simplify the process, but expert legal advice is essential to handle cross-border implications.
Conclusion
Estate management in Germany requires a deep understanding of the relevant regulations and procedures. It is advisable to seek the assistance of experts in succession law to navigate this complex legal framework and ensure that the estate distribution complies with the law and the testator’s wishes.