Domestic partnership; it does not confer any statutory inheritance rights. Domestic partners do not even have a claim to household goods.
Domestic partners who wish to leave assets to each other need to do so by will or testamentary contract. Their right to dispose of their assets is subject to the mandatory minimum share of their children or parents (“Pflichtteil”).
Assets left to domestic partners are taxed in the category III. The exemption amount is only € 20,000 (€ 2000 if both the decedent and the beneficiary lived outside Germany prior to the death).
EHEGATTENTESTAMENT (or GEMEINSCHAFTLICHES TESTAMENT)
A joint will that under German law may be set up by married couples or registered homosexual partners. Spouses usually designate each others as sole heirs, with the entire combined estate of the couple given to mutual descendants upon the death of the surviving spouse.
A joint will serves two purposes:
- To avoid the “forced heirship” of the descendants at the death of the first spouse and thus ensure that the surviving spouse can maintain his/her standard of living. A joint will by a married couple is the only way the mandatory minimum share due to the children or other descendants can be avoided.
- To restrict the surviving spouse’s testamentary freedom by making the joint dispositions binding. This is often used as a means to allow the surviving spouse to enjoy the estate of the first-to-die spouse, while ensuring that those assets will still ultimately go to the beneficiaries chosen by the first-to-die spouse.
Spouses may modify the joint will only together.
A joint will cannot usually be unilaterally changed or cancelled, regardless of before or after the death of the first-to die spouse.
During the lifetime of both spouses it is possible to cancel the joint will through a notarized statement to that effect. (Remember that notaries on continental Europe are trained lawyers.)
In many cases the spouses want to allow the surviving spouse to have the flexibility to give assets to future caregivers or other persons close to them. In this case the surviving spouse is given the freedom to modify the joint will after the death of the surviving spouse.
By contrast, a testamentary contract cannot be modified after the death of the first spouse.
Under German law, descendants, spouses and (if there are no descendants) parents are entitled to a mandatory minimum share (“Pflichtteil”), even if the testator disinherits (“enterbt”) them by will (“Testament”), mutual will (“gemeinschaftliches Testament”) or testamentary contract (“Erbvertrag”). The mandatory minimum share is the half of what they would receive based on the statutory rules of intestate succession, if there had been no will.
This means the distribution of the estate among the community of heirs (“Erbengemeinschaft”). Normally there is no executor or administrator of the estate, so the heirs (most comparable to the residuary beneficiaries under US jurisdictions) have to agree among themselves who receives what.
Conflicts among the members of the community of heirs are often solved through mediation. A further step is litigation of one heir to compel the other co-heirs to approve a specific plan to divide the estate.
The will of the testator may prohibit the division of the estate. In these cases the estate has to be administered as a whole for as long as 30 years.
An heir under German law takes the place of the decedent immediately upon death. If there are more than one heirs, then the community of heirs takes the place of the decedent jointly and severally. This mean that they assume the decedent’s obligations and take over his assets. Heirs are personally liable for the debts of the decedent. This can be avoided if the heir disclaims the inheritance (“das Erbe ausschlagen”).
Persons who are given specific bequests under the will are not heirs but legatees (“Vermächtnisnehmer”). They do not assume the legal position of the decedent, are thus not liable for the latter’s debts.
The word “Erbe” may mean “heir”, but also “estate”. To avoid the confusion, the word “estate” should be translated as “Erbschaft”.
In testaments drafted by laypersons the wording often is not clear about whether a certain beneficiary is meant to be a legatee (“Vermächtnisnehmer”) or indeed an heir (“Erbe”). An “Erbe” ist most comparable to a residuary heir under US laws, but with important distinctions. The “Vermächtnisnehmer” receives a certain asset, and does not step into the place of the decedent. By contrast, the “Erbe” assumes the decedent’s assets (or a share thereof, if there are several heirs) and becomes personally liable for the decedent’s debts.
There is extensive case law on the interpretation of various unclear clauses. This case law is based on a few paragraphs in the German Civil Code (BGB).
The heir (“Erbe”) under German law (most comparable with a residuary beneficiary under the laws of US states) is personally liable for the debts of the decedent, even beyond the extent of the inherited assets. The reasoning for this is that the heir steps into the shoes of the decedent and assumes the latter’s place in the legal world, including the contractual obligations.
The right to receive an inheritance. This is excluded only when the presumptive recipient is guilty of serious felonies to the detriment of the decedent.
The intestate succession rules. Under German law, the descendants of the decedent are the heirs of the first order “Erben erster Ordnung”.
The surviving spouse has the statutory share of one quarter. This share of one quarter is increased to one half if all of the children of the two spouses are common children.
If there is no surviving issue, the parents and the spouse share equally the inheritance.
The law of successions (estate law) is markedly different in Germany than in the United States. The biggest difference is that in Germany the heir or community of heirs takes the place of the decedent immediately upon death: they assume the assets and the liabilities. for the latter the heirs are jointly and severally liable.
Another major difference is the forced heirship of children and spouses (or, if there are no children, parents). These persons are entitled to a minimum mandatory share (“Pflichtteil”) of the estate even if they are disinherited by will, mutual will or testamentary contract of the testator. This minimum mandatory share is half of the share that they would receive had the decedent left no dispositions.
A person who possesses estate assets without being heir or legatee.
Inheritance taxes in Germany are onerous and very complex. They have to be paid by each beneficiary individually if any of the following applies:
– The decedent resided in Germany;
– The beneficiary resides in Germany;
– The asset transferred in the estate is located in Germany.
The tax rates range from 7% to 50%, depending on the degree of relationship between the decedent and the beneficiary. The exemption amounts range from € 2000 to € 500,000.
The certificate of inheritance is issued by the local court (in Baden-Württemberg by a notary) and proves the identity of the heir(s). One or more heirs need to apply for it. By this application they accept the inheritance.
In case the liabilities exceed the assets, it can be more advantageous to disclaim the inheritance instead of applying for a certificate of inheritance.
Heirs who live in Germany can do this by making a statement to that effect before the local court where the decedent had lived. They have only six weeks after having been notified of the inheritance to disclaim the inheritance.
Heirs living abroad can either disclaim the inheritance or apply for a certificate of inheritance at a German Consulate. The deadline for disclaiming the inheritance is six months in their case.
Accepting or disclaiming an inheritance has to be done in person at the German Consulate. There is a fee for the application for a certificate of inheritance. The amount depends on the value of the estate.
In case there is no will, the application for a certificate of inheritance has to be accompanied by original birth certificates and their official German translations.
The Consulate will send these documents to the probate court. For the certificate of inheritance there will be a further fee levied.
Testamentary contract: Under German law it is possible for two or more persons to set up a contract with mutual binding testamentary dispositions. A later modification requires the approval of all parties. An exception is if the parties have reserved the right to withdraw from the contract. A testamentary contract has to be notarized.