German Estate Settlements for U.S. Heirs: Probate, Inheritance Taxes, and Asset Transfers

When a relative or a friend dies in Germany leaving assets to heirs living in the United States, the administration of the estate can quickly become legally and logistically complex. German probate procedures differ substantially from those in the United States, particularly with respect to inheritance law, tax compliance, banking procedures, and real estate transfers.

For many American heirs, the process involves unfamiliar German legal concepts, communication with multiple German institutions, and extensive documentation requirements. Our law firm assists U.S.-based heirs throughout the entire German estate settlement process — from the initial probate proceedings to the final distribution and liquidation of assets.

After the death of a German resident, the local court (“Amtsgericht”) opens the probate proceeding (“Nachlassverfahren”). As an exception, in Baden-Württemberg the transfer of the estate to the beneficiaries is handled in most cases by notaries.

The probate court notifies the beneficiaries of their interest in the estate. As an aside, correspondence with German authorities is in German language. German authorities are not required to consider documents in other languages.

Universal Succession Under German Law

One of the most important differences between German and American inheritance law is the principle of universal succession, known in German as “Universalsukzession” or “Gesamtrechtsnachfolge.”

Under German law, the heirs automatically step into the legal position of the decedent immediately upon death. This means that ownership of assets and liabilities transfers automatically by operation of law without the need for a court-supervised transfer process.

As of the moment of death, the heirs generally become the legal owners of:

• bank accounts,
• securities and investment portfolios,
• real estate,
• business interests,
• household contents,
• and other estate assets.

At the same time, they also assume responsibility for estate liabilities.

If there are multiple heirs, they automatically form a community of heirs under German law. Until the estate is formally divided, the heirs jointly own and administer the estate assets.

This concept differs substantially from many U.S. probate systems, where a court-appointed personal representative or executor often takes control of estate assets during probate administration.

German Courts Typically Do Not Appoint an Executor

Another important distinction is that German probate courts generally do not appoint an executor to administer the estate.

Although a testator may voluntarily nominate an executor in a will under German law, many German estates do not involve an executor at all.

In the absence of a validly appointed executor, the heirs themselves are responsible for handling the estate administration. This includes:

• communicating with banks,
• handling tax filings,
• securing and managing real estate,
• liquidating investments,
• paying liabilities,
• and ultimately distributing the estate assets.

For U.S.-based heirs, this can create significant practical challenges, especially when they do not reside in Germany and are unfamiliar with German legal procedures.

Our law firm regularly acts on behalf of heirs through comprehensive powers of attorney, allowing us to manage the entire estate administration process in Germany without requiring repeated travel by our clients.

Power of Attorney and Representation in Germany

The first step in many cross-border estate administrations is granting our firm a power of attorney.

This allows us to communicate directly with:

• German probate courts,
• banks,
• tax offices,
• brokers,
• land registries,
• insurance companies,
• and real estate professionals.

For many American heirs, this is essential because estate administration in Germany often requires extensive local coordination and documentation.

Our firm maintains staff physically located in Germany who can handle practical matters on site, including property access, coordination with local authorities, and management of estate assets.

Petitioning for the Certificate of Inheritance

One of the central probate procedures in Germany is obtaining the Certificate of Inheritance, known as the Erbschein.

The petition is generally filed with the local German probate court — the Nachlassgericht — located at the decedent’s last domicile in Germany.

The Certificate of Inheritance is an official court-issued document confirming:

• who the legal heirs are,
• and the percentage or share inherited by each heir.

German banks, financial institutions, and land registries frequently require the Certificate of Inheritance before releasing or transferring estate assets.

Obtaining the certificate may require substantial supporting documentation, particularly when heirs reside abroad. Common requirements include:

• certified civil status records,
• apostilles,
• certified translations,
• genealogical documentation,
• and evidence regarding family relationships.

Our firm prepares and coordinates the entire probate application process.

German Inheritance Tax Compliance

German inheritance tax obligations must also be addressed promptly.

The inheritance must generally be reported to the appropriate German inheritance tax office. Subsequently, a formal inheritance tax return may need to be prepared and filed.

This process often involves:

• identifying worldwide assets,
• valuing German and foreign property,
• analyzing available exemptions,
• reviewing prior gifts,
• and applying the Convention between the Federal Republic of Germany and the United States of America for the Avoidance of Double Taxation with respect to Taxes on Estates, Inheritances, and Gifts.

Many U.S. heirs are surprised to learn that German inheritance taxes may apply even when the heirs themselves live entirely outside Germany.

Our firm regularly advises clients regarding German inheritance tax exposure and coordinates tax filings and payments with the German tax authorities.

German Bank Accounts and Frozen Assets

Once German banks learn of the death, accounts are frequently frozen pending probate and tax compliance procedures.

Although the heirs become the legal owners of the accounts immediately upon death under the principle of universal succession, banks often restrict access until:

• inheritance documentation is produced,
• compliance requirements are satisfied,
• and in some cases inheritance tax obligations have been resolved.

This can create significant liquidity issues for heirs who need access to estate funds for:

• taxes,
• maintenance expenses,
• property costs,
• or ongoing estate administration.

We regularly communicate directly with German banks to coordinate documentation and facilitate the release or transfer of estate assets.

FATCA and U.S. Tax Compliance

For American heirs, German financial institutions frequently require extensive FATCA and IRS compliance documentation before releasing investment or brokerage accounts.

This may include:

• IRS Forms W-9,
• taxpayer identification information,
• FATCA declarations,
• and related compliance documentation.

Our firm routinely handles these cross-border compliance issues and coordinates directly with German banks and investment institutions.

Real Estate Transfers and Asset Liquidation

If the estate includes German real estate, the probate court typically notifies the German land registry following the inheritance proceedings.

The heirs are then registered as the new owners of the property.

Where multiple heirs exist, they generally become co-owners until the property is sold or otherwise distributed.

Our firm assists clients with:

• property management,
• tenant coordination,
• real estate sales,
• household liquidation,
• estate clean-outs,
• investment liquidations,
• securities transfers,
• and final asset distributions.

Comprehensive German Estate Administration for International Clients

The settlement of a German estate involving U.S.-based heirs requires coordination between probate courts, tax authorities, financial institutions, and real estate professionals in multiple jurisdictions.

Our law firm handles the entire process from beginning to end, including:

• probate proceedings,
• inheritance tax compliance,
• FATCA documentation,
• banking matters,
• real estate transfers,
• and final estate distributions.

With staff based in Germany and extensive experience in German-American inheritance matters, we provide comprehensive representation for international heirs throughout all stages of the estate administration process.