Erbgemeinschaft Explained: German Inheritance Law, Heir + More
Erbgemeinschaft – Real estate can lead to numerous disputes within an Erbgemeinschaft, henceforth called “community of heirs”. Especially if there are different ideas about how to handle the property. A community of heirs is usually the children of the testator. This comes about when the deceased does not leave a will, as in this case the legal succession applies.
A community of heirs means a community of joint owners. This means that the inheritance is a joint property. Each individual member of the community of heirs becomes the owner, but always only together with the other heirs. Each individual is thus entitled to the property, but this right is limited by the rights of the other co-heirs. None of the heirs can give away or sell individual items of the estate without consent, not even his own share of it, since everything belongs to all of them.
Disputes Within the Community of Heirs are Common
Disputes within the community of heirs often arise when the interests of the co-heirs differ greatly. This is the case, for example, when one of the siblings needs money as quickly as possible and is therefore interested in selling the house, while the other siblings expect an increase in the property price and want to keep or rent the house.
The Testator can Prevent the Community of Heirs
From the very beginning, a community of heirs can only be prevented by the testator, by writing a will. Married couples often agree on a Berlin testament. After this, the spouse who lives longer becomes the sole heir.
Children are excluded from this inheritance. If there are several children, a community of heirs can be excluded by designating one child as the sole heir, while bequests are made to the other children. The legatee thus receives a payment or a specific object of the estate without becoming the legal successor.
General information on the Dissolution of the Community of Heirs
If the children wish to dissolve the community of heirs, it must first be examined how large the estate is. A certificate of inheritance is required for this. In the case of a community of heirs, this is a joint certificate of inheritance. It contains all the names of the heirs as well as an exact list of the shares of each heir. Only when the certificate of inheritance has been obtained, the banks where the accounts of the deceased exist, allow an insight into the finances.
If the estate also contains debts, these must first be paid off. This can lead to the fact that the estate itself must be sold.
The co-heirs are obliged to provide information about donations during the testator’s lifetime. If one of the siblings has already received a plot of land or real estate at an earlier point in time, it is a donation that is subject to equalization. Compensatory gifts increase the value of the estate. This in turn is deducted from the inheritance quota of the co-heir.
It often happens that if there are several siblings, one of them takes care of the parent free of charge. This sibling can claim compensation through the care provided. This increases the inheritance share of this person. The amount of the compensation depends on the duration and extent of the care provided as well as on the amount of the estate itself.
Dissolution of the community of Heirs: Ways and Means
Different ways to dissolve the community of heirs
If the community of heirs agrees on what is to be done with the estate, i.e. the real estate, a division agreement can be concluded. This agreement must be notarized if real estate is to be transferred.
Transfer of Inheritance
Another possibility to dissolve the community of heirs is the transfer of inheritance. In exchange for a settlement, the co-heirs can transfer their inheritance share to a co-heir. This step also requires a notary. This is a particularly simple solution to dissolve the community of heirs.
In the case of stratification, the individual also leaves the community of heirs in exchange for a settlement. However, his share of the inheritance is not transferred to a single heir, but becomes part of the joint heirs’ total inheritance. By paying the compensation, the individual thus relinquishes his or her rights as co-heir. As a result, the share of the inheritance of the other co-heirs increases. The amount of the compensation can be determined by the heirs themselves.
Each co-heir can sell his or her own inheritance, also to third parties. However, no individual items of the estate may be sold. Instead, the buyer becomes part of the community of heirs. Each co-heir has a right of first refusal and can purchase the share of the inheritance on the conditions agreed with the third party. It must be noted that this step is also notarized.
Court of Probate
If a dispute arises and no agreement is in sight, a probate court can be involved. This court assumes the role of mediator in the matter. However, any co-heirs can prevent the involvement of a probate court by lodging an objection.
In the event of a dispute, an arbitral tribunal may also make a decision.
Action for Partition
In the event of an action for partition, the objects of the estate will be sold at public auction. In the case of real estate, a compulsory auction takes place. The action for partition is usually associated with high costs and should therefore be avoided in the interest of all co-heirs.
If the estate includes a property, any of the co-heirs can apply for a divisional auction. The only requirement for this step is that the applicant is registered in the land register. The purpose of a division auction is to make money out of the property and then to divide it among the heirs.
Due to the usually high loss of value, a division auction is not advisable. In division auctions it is common practice to set the market value of the property as low as possible in order to increase the interest of potential buyers and thus to sell the property quickly and promptly. The price that is collected for the property at the end of the auction rarely corresponds to the real sales value of the property.
There is no claim to dissolve the community of heirs
The individual is not entitled to have his heir share paid out to him or to be released from the community of heirs. If you do not want to be part of a community of heirs, your only choice is not to accept the inheritance.
In a community of heirs it is financially advantageous and in the interest of all if an agreement is reached.
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