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Notary Services: Inheritance and Gifts2018-09-02T14:28:03+00:00

Notary Services: Inheritance and Gifts

During our lifetimes, we strive to accumulate and protect assets. Many of us, however, fail to make any provisions at all made in case of death. Unfortunately, many families fall apart due to conflicts over inheritance after a family member’s death, and they often become entangled in expensive legal disputes until there is no inheritance left.

In case of intestate succession, German law does not differentiate as to whether the given estate consists of a one or multiple-family home, a company, savings or any other assets. The rude awakening occurs mostly after a family member’s death. Couples are often of the opinion that their mutual home will belong to their surviving partner alone. They are not aware, however, that in Germany other parties, such as children and even distant relatives, can be legally entitled to inheritance, as well, and thus become co-owners of the estate.

The succession that occurs after one’s death is also not influenced by whether or not the deceased had a good relationship or a bad relationship (or no relationship at all) with his or her heirs.

In case a company or shares are being passed on, no one will inquire whether the heirs actually possess the ability to continue to operate the business. Finally, in case of intestate succession tax structuring options are not considered, and these can only be optimally utilized if a last will and testament is individually structured with precise instructions.

An individually structured asset succession can be arranged in two different ways. One possibility is to structure asset succession based on inheritance (in case the testator passes away), while the other possibility is a so-called “anticipated inheritance” bequest which was decided during the lifetime of the testator. Both approaches have their advantages and disadvantages, which should be individually discussed in detail.

In many cases, a combined solution incorporating lifetime transfers by way of anticipated inheritance combined with a (joint) will & testament or inheritance contract proves to be the most advantageous. In this regard, myriad German legal regulations must be considered in order to find the most suitable solution. This is often not possible without consulting an expert.

Notary Delia Reinders, whose daily job is to deal with such situations, will in the course of a personal consultation find the correct solution for your specific situation and will transpose it into the proper legal format.

INTESTATE SUCCESSION

Everyone has heirs. In case someone fails to appoint their heirs, the heirs will be appointed by law. Intestate succession considers the biological closeness of the relatives of the deceased. The heirs of the first order are children of the deceased. In case the children have passed away before the deceased, or in case they decide to waive their inheritance, the next to get their turn would be the grandchildren, and so on.

Provided there are no heirs in the first order or that they have waived their inheritance, the heirs of the second order, which also include the siblings of the deceased of and their descendants, are taken into consideration. The heirs of subsequent orders are grandparents and their respective descendants, then the great grandparents, and so on.

Spouses, including partners in registered civil (life) partnerships, also have a right to inheritance. The inheritance share will depend on which marital or community property scheme the spouses or partners were living under and how many of their family members are still alive. Should children, parents, siblings or grandparents still be alive, the law requires that the spouse or partner must share the inheritance with the other parties.

The surviving partner therefore does not legally inherit the entire property of the deceased. This is due to the fact that without the other heirs’ consent he or she cannot make free use of the assets. In case the spouses’ or partners’ children are still minors, court order authorizations may be required. The further use of the inherited assets can be particularly difficult to arrange in situations involving patchwork families.

Therefore, in such arrangements a specific, individual inheritance plan is urgently recommended. Moreover, when childless married couples would like to prevent parts of their inheritance being passed on to parents or siblings of the deceased, a specifically formulated last will and testament or the conclusion of a marital agreement is also indispensable.

If you are not legally married to your partner, you do not possess any legal rights to inheritance under German law. Regardless of the duration of a non-married life partnership, your partner will not receive any part of your assets. In order to be mutually protected in case of death, a specifically formulated last will and testament or an inheritance contract is even more critical for unmarried couples.

STRUCTURING WILLS, TESTAMENTS AND INHERITANCE CONTRACTS

In case the standard legal inheritance laws do not fit your purposes, you can decide who will receive your assets in the case of death with the help of a will or a testament. Due to the so-called “compulsory portion” under German law, which amounts to the forced inheritance of immediate family members, there are certain limitations, however. In addition to this type of disposition of property upon death, there are further inheritance documentation tools such as, for example, legacy, certain restrictions or execution of a will in order to allow non-related persons to have access to parts of assets.

Many mistakes can occur particularly during the formulation phase of one’s last will or testament. Formulations may be ambiguous or, in many cases, the desired goal cannot be reached in the previously imagined manner. In order to have certainty that all points of the will or testament will comply with your intentions, you should discuss your ideas and intentions with Notary Delia Reinders.

She will look into which provisions would be useful and applicable to your particular case and will ensure that all legal formulations in your last will are legally accurate and binding and that they exactly reflect your intentions. There are no additional costs for this service, as notary fees already include a consultation and the drafting of a document.

Inheritance contracts must always be notarized; wills and testaments can be notarized, yet notarization is optional. When you notarize your will or testament, you can be certain that it will be executed in accordance to your wishes and intentions. Moreover, your heirs will be able to handle the distribution of your assets much more expediently. Since an issuance of an inheritance certificate will not be required, your heirs will save time and avoid considerable expenses associated with obtaining an inheritance certificate.

  • WILLS & TESTAMENTS

    A testament can be structured as an individual will or as a joint will. It should be noted that a joint will cannot be established between unmarried couples, as it can only be established between married couples or couples in registered civil life partnerships.

    As a general rule, you can formulate your own will, yet since individually formulated wills without the presence of a notary often contain mistakes or are unclearly or ambiguously formulated, a consultation with a notary and notarization of the document is most highly advisable.

  • INHERITANCE CONTRACTS

    An inheritance contract is a disposition of assets in contractual form made between at least two parties. An inheritance contract must always be notarized and cannot be formulated by one’s self at home. In contrast to joint wills, inheritance contracts can also be concluded between unmarried couples, siblings and other non-related persons.

  • BEQUESTS

    Should certain closely related persons not become heirs (or should their inheritances be limited to one particular asset or monetary amount), a respective bequest can be arranged within the will. Whereas bequest assets do not automatically transfer into the possession of the legatee in case of the legator’s death, the legatee does have an enforceable right vis-à-vis other heirs for the bequest object to be handed over to him or her.

  • EXECUTION OF WILLS & TESTAMENTS

    A further execution of a will or testament can already be arranged in the will or testament. The primary tasks of the executor include taking possession of the estate, performing the last orders of the deceased and carrying out the distribution of assets between the legal heirs while mediating any disputes. In addition, the testator can arrange for a more detailed execution of any further specific tasks in his or her will.

    The appointment of an executor of a will or testament is particularly advisable in cases of larger estates or instances involving minors, persons with physical or mental disabilities or heavily indebted heirs.

  • NATIONAL REGISTERS OF WILLS

    Since the 1st of January 2012, the German National Association of Notaries has operated the Central National German Register of Wills. The register enables the swift and secure location of officially filed documents pertaining to inheritance matters, such as wills and testaments and inheritance contracts. The register only contains the required data regarding the existence of certain notarized documents. It does not contain any separate documents or any of their contents.

INHERITANCE MATTERS

Inheritance matters are difficult time periods. This is not only the case because of the bereavement they cause. From a legal standpoint, heirs are often faced with surprising legal issues that require notary consultation, including:

  • Whereas the assets will transfer to the heir(s), the deceased’s assets will also include his or her debts. Therefore, if the heir or heirs do not open inheritance insolvency proceedings or appoint an executor, they will unlimited liability for those debts.
  • Those heirs who do not want to inherit anything because of debts must waive the inheritance. To do so in a legally valid manner, a six-week deadline applies as of “the date on which the heir gains knowledge of the reason for appealing”, which in most cases is six weeks after the death of the testator. Notary Delia Reinders can explain how to formulate a waiver and which effects your waiver will have.
  • If there is more than one heir, the heirs share rights in the estate as a community of heirs. That means that they can only jointly dispose over the assets of the estate and jointly reach administrative decisions. That leads to disputes. Notaries therefore help mediate and mitigate inheritance disputes.
  • If a single heir or a group of heirs seeks to sell rights to the community of heirs this can only be accomplished by means of a notarized agreement.
  • Evidence as to which persons inherited which respective shares must be provided in the form of an inheritance certificate. You can formally apply for an inheritance certificate with Notary Delia Reinders, and the inheritance certificate will be issued by the probate court. This is usually not required, however, when the testator has notarized his or her will or testament or concluded an inheritance contract.

GIFTS

It sometimes makes sense to transfer certain assets while alive by means of a gift. If lifetime gifts are made in anticipation of an expected inheritance then this is usually referred to as a “transfer by means of anticipated succession”. Alongside the area of the succession of corporate ownership, this issue is extremely important in regard to the succession of real estate. Most importantly, however, this type of transfer allows for optimal tax structuring and under certain circumstances the reduction of third party compulsory portions.

Given the associated advantages and disadvantages, the question as to whether it is preferable to structure with a lifetime gift or a post mortem bequest requires careful consideration and expert legal advice.

FEES

For their services, notaries charge fees subject to a legally defined fee system exclusively determined by the commercial value of the subject legal matter. Notarization of your will, testament of inheritance agreement will therefore cost the same amount regardless of the notary. The notary fees also include all consultations and drafting. The notary will gladly provide information regarding the anticipated

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