Transfer real estate: example including foundation

Transferring a property to a family foundation in Germany can be a complex process involving legal and tax aspects. It is advisable to seek advice from an experienced lawyer or tax advisor to ensure that all legal requirements are met.

Please note that this is only a general overview and the exact steps and requirements may vary depending on the individual situation and the applicable laws in Germany. Therefore, it is important to seek advice from foundation experts to ensure a smooth and legally sound transfer.

How do I transfer a property to a foundation?

Basically, there are several steps that should be followed when transferring a property to a family foundation:

The right setup of your foundation: preparation

If you don’t already own a family foundation, you need the right setup first.

Establishment of the family foundation

First, a family foundation must be established. This requires the creation of a foundation deed, which defines the purposes of the foundation, the beneficiaries and other relevant details.

• Establish a family foundation

Selection of the property

The property to be transferred to the family foundation must be selected. Make sure the transfer is compatible with the goals and purposes of the foundation. A family foundation often aims to preserve assets for generations. Therefore, the property selected should provide long-term stability. Factors such as location, sustainability of the real estate market, and potential performance are important to ensure the long-term preservation of the asset’s value.

Valuation of the property

The property should be appraised by an independent appraiser to determine the current market value. This is important for tax purposes and to ensure that the transfer is made on reasonable terms.

• Evaluate property

Transfer agreement – step 1

A transfer agreement must be drawn up between the previous owner and the family foundation. This contract regulates the transfer of the real estate and all associated conditions. In terms of its structure, it will certainly remind you of a typical contract of sale of a property.

Structure of the transfer agreement: example

The contract should begin with an introduction identifying the parties to the contract. Here, the previous owner (seller) and the family foundation (acquirer) are named.

1. Description of the property
2. Purchase price or transfer conditions
3. Delivery and transfer of ownership
4. Warranties and liability, other conditions
5. Consents and approvals
6. Place of jurisdiction and arbitration agreement

Description of the property

Describe the property accurately to avoid misunderstandings. This includes details such as address, land register number and a precise description of the premises.

Purchase price or transfer conditions

The contract should specify the purchase price or the conditions for the transfer of the property. This can be, for example, a fixed purchase price, a symbolic amount or other agreed consideration.

Delivery and transfer of ownership

The time and method of transfer of the property should be specified in the contract. This includes the transfer of title, handover of keys and all relevant documents.

Warranties and liability

The contract may contain provisions on warranties and liability. For example, the seller may provide warranties about the condition of the property or exclude certain defects. Limitations or exclusions of liability can also be agreed.

Other conditions

The contract may contain further conditions and provisions governing the rights and obligations of both parties. This may include, for example, provisions on ancillary costs, maintenance, rights of use or similar.

Consents and approvals

If certain consents or approvals are required for the transfer (e.g. consent of co-owners, consent of banks), these should be recorded in the contract. The contract may contain provisions for termination, e.g., in the event of non-fulfillment of the terms of the contract or other agreed circumstances.

Place of jurisdiction and arbitration agreement

The contract may contain a choice of court or arbitration agreement to determine which court or arbitration tribunal has jurisdiction in the event of a dispute.

The contract should be signed by both parties to ensure its validity. It may also be necessary for witnesses or notaries to certify the signatures.

Registration in the land register – step 2

The transfer of the property must be recorded in the local land register to legally document the change of ownership.

Check tax and legal aspects – Step 3

Transferring a property to a family foundation can have tax implications. A tax expert / foundation expert can help you develop the best tax strategies and file the necessary tax returns.

An attorney should oversee the entire transfer process to ensure that all legal requirements are met and that there are no legal risks.

With my experts you will establish your company safely and with all tax advantages.

• Establish a family foundation
• Contact

Please note, this article is written with a focus toward the German market, but very similar laws apply everywhere.

Testament – Inherit the assets correctly

Without a testament, the estate will be distributed according to the provisions of the legal succession. However, this is not always in the interest of the testator. If a will exists, the assets can be distributed differently than the law requires and non-blood relatives can also inherit. The making of a will is therefore not only important to regulate the last will and testament exactly, but also to avoid disputes in the family.

• Learn more about: Correctly inherit
• Exemptions and Inheritance Tax

The Content – What can be regulated in a will?

A will overrides the legal succession and can thus determine a new succession. The testator determines who is to take over the inheritance. If several persons are named, the assets are usually divided according to quotas. Writing a will also allows the testator to leave individual items to certain persons, such as a car, jewelry or real estate. However, these are legally not considered as inheritance but as bequest. To avoid disputes about the estate, the estate can be distributed in a will in such a way that no points of contention can arise.

Setting up – the notary helps

Wills can be drawn up with or without a civil law notary. If a will is drawn up without a civil law notary, a few things must be taken into account. The author must be at least 16 years old and “testable”, i.e. in full possession of his mental powers. The testament must be written by hand, because printouts written on the computer are not sufficient as a valid testament. If the will is several pages long, each page should be numbered, stapled together and each page should be dated and signed in a uniform manner. A unique heading, such as “Last Will and Testament” or “My Last Will and Testament” is recommended to make the purpose of the writing clear.

If, however, a will is drawn up with the help of a civil law notary, this means that the testator has verbally recorded his last will and testament with a civil law notary. This is particularly important when real estate is part of the estate, because either a certificate of inheritance or a notarial will is required for transfer to the land register. If a notarial will exists, the heirs are spared the costly and time-consuming inheritance certificate procedure.

Assigning Real Estate in a will – avoiding community of heirs and disputes

If there is no will and a property is part of the estate, it becomes the property of the heirs. In most cases, a community of heirs is then formed in which no one can dispose of the inheritance alone. When such a property is sold, all heirs must agree. This fact can often lead to disputes within the community of heirs. In addition, the costs incurred for a notarial will are usually only half as low as the costs for a certificate of inheritance that the heirs have to pay if no will exists. In a will, the last will and testament can regulate the last will and testament about the real estate in detail and save disputes and unnecessary costs for all parties involved.

Debts in your estate – Protect your private assets

The heir to an estate takes over not only the assets but also the liabilities of the deceased. In general, an heir must reject a debt inheritance within six weeks, otherwise the heir is liable for the debts with his private assets. If it is clear from the outset that it is a debt inheritance, the inheritance can be rejected within the six-week period. If it only becomes apparent later that the estate is burdened with debts, an application for bankruptcy can be filed. The private assets of the heir are thus protected and the debts must only be repaid from the estate.

The traps – What to pay attention to

Particularly when it comes to the question of how best to inherit the estate, mistakes often occur in the correct implementation that limit the last will and testament.

No will

Without a will, the legal succession automatically takes effect. This can lead not only to disputes within the family, but also to the fact that loved ones are left empty-handed

No replacement heir

If the designated heir is already deceased at the time of death, the legal succession takes effect, which is not always in favour of the testator. The nomination of a substitute heir is therefore very important to avoid legal succession.

Non-marital partners

Non-marital partners must be clearly named in the will, as they are left empty-handed according to the legal succession

No children

Childless married couples without a will do not inherit completely to the remaining spouse, but also to parents or siblings. If the spouse is to administer the estate, this must be named exactly.

No clarity

A testament should always clearly state what the last will and testament is. If it is not clear how the estate is to be treated, errors may occur.

Legal succession – this happens without a will

If the deceased leaves children and a spouse, the spouse receives half of the assets according to the legal succession. The other half is divided between the children. If the deceased has no children, the spouse receives 75 percent of the assets and second-order relatives, such as siblings or parents, receive the remaining part of the inheritance.

In general, the spouse always inherits. Apart from this only heirs of one order can inherit, for example the children. If there is a first-order heir, such as a child, no one inherits from the second or third order.

Please also inform yourself about the topic: compulsory part in the inheritance!

Statistics: Inheritance in Germany

Here you can see inheritances and donations in Germany. The survey ranges from 2008 to 2018 and shows that over 110,000 inheritances are distributed annually. Great potential for dispute if the community of heirs does not agree.

You can find more statistics at Statista

How much money is inherited?

Since 2014, Hamburg in particular has been the leader in Germany. Hamburg is currently at the top with 167.80 euros. In no other city is so much inherited. With a population share of 2.19% of total Germany (1.82 million of 82.79 million), a total volume of 305,731,600 Euro is inherited annually.

• Population share Hamburg 2.19%
• Inheritance in Germany (comparison year) 109,635; statistically 2,401 inheritances in Hamburg
• Total inheritance (Hamburg / year) 305,731,600 Euro

Sell your inheritance? House prices in Germany

Here you can see the cities with the highest prices per square meter for condominiums in a comparison of 2010 and 2018* (in euros per square meter).

1. 1. Munich (Bavaria) with 8,342 euros per square meter; from 6,737 euros per square meter in 2014; increase of 1,695 euros per square meter in 4 years
   2. Stuttgart (Baden-Württemberg) with 5,925 euros per square meter; from 4744 euros per sqm in 2014; increase of 1,181 euros per sqm
   3. Frankfurt am Main (Hesse) with 6,060 euros per square meter; from 4,373 euros per square meter in 2014; increase of 1,687 euros per square meter
   4. Freiburg im Breisgau (Bavaria) with 4,943 euros per square meter; from 4,740 euros per square meter in 2014; increase 203 euros per square meter in 2014; increase 203 euros per square meter in 2014

1. Ingolstadt (Bavaria) with 4,969 euros per square meter; from 4,287 euros per sqm in 2014; increase 682 euros per sqm

You can find more facts and figures on this topic at: Statistics Heritage.

The most important questions: Will and correct inheritance

In order to avoid family disputes and ignorance about the estate, it is important to settle the inheritance during your lifetime. Our experts have answered all important questions on this subject for you.

When is a donation tax-free?

Parents can give their children something from their inheritance and this is tax free. This possibility facilitates the inheritance taxes that are due on the inheritance. Parents may give their children a tax-free gift of 500,000 euros, while the amount is limited to 20,000 euros. .

Can I sign over my child to my house?

If you would like your child, or one of your children to receive your property, you can sign over the property while you are still alive. However, this is considered a gift, which is why your descendant will own ten percent of the property with every year you live after the gift.

How is an inheritance divided without a will?

Without a will, the inheritance is distributed according to the legal succession. In the first place, this succession takes into account the spouses and children. Other relatives are usually not taken into account.

What does the transfer of a house cost?

The cost of transferring a house depends on the value of the property. As a rule, the value is determined by the comparative value method.

Is a donation taxable?

A gift is taxed in the same way as an inheritance, but the same tax allowances apply to gifts as to inheritance.

What is meant by a gift?

A gift is a donation by which someone enriches someone else from his or her assets without demanding a monetary contribution.

The 8 best sayings for moving in – motivation, congratulations and praise

There is no shortage of sayings for moving in. But which are actually the best or most suitable? That is of course a matter of taste. Nevertheless, we have collected for you the sayings that we find the best. So that there is a suitable saying for everyone, we have made an effort to make the whole thing as diverse as possible. So there are sayings that motivate you, others that generally congratulate you on your new home and others that praise you for the furnishings, the cut or the location of the new apartment.

More tips? The 3-part special on the subject of moving:

1. Part – Moving Checklist: Moving, Schedule & Packing
2. Part – Moving Tips: Moving house & apartment without stress
3. Part – Moving in & congratulations: The most beautiful sayings

Johann Wolfgang von Goethe

“A new house, a new man.”

Especially for the people who want to start a new beginning in their new home, this saying could be suitable. If you are looking for a saying for the move-in of a close friend of whom you know that he or she is glad to have finished his or her “old life” with the move-out, you could give him or her a card with this saying. Such a saying could motivate your friend and make the person start the “new” life in a positive way.

Hermann Hesse

“And there’s magic in every beginning.”

This saying is a little more distant but still beautiful. It is especially appropriate if you are attending the housewarming party of someone you are not too close to. Through this saying you give no matter whether a single person, a couple or a family a homey, positive feeling. It is also particularly suitable as a saying for the wall. If a family is experiencing several beginnings at the same time, such as the birth of a new family member or a recent wedding in addition to moving house, then this saying could be a perfect fit.

Hoffmann von Fallersleben

“Into every home where love dwells,
There shines in also sun and moon,
…no matter how small it may be,
spring is coming in after all.”

This little poem by Hoffmann von Fallersleben could be the right saying for a card that a student or trainee receives for their first small 1-room apartment or shared room. The crucial point in this poem, that the inhabitants of a house or an apartment are much more important for the atmosphere than the size or the appearance, is taken up here particularly beautifuly and could please a person who moves into a small apartment and motivate the love by the presence to express more strongly.

Moving into a new home – design a card

Meister Eckhart

“And suddenly you know: It’s time to start something new, and trust the magic of the beginning.”

This is also a very popular saying for the moving card. This saying is suitable for close friends of whom you know that you associate their moving into the new apartment or house with a new beginning. With the description “Magic of the beginning” you give the person a good feeling on the way. You can also make family members a little happier with this saying.

Friedrich Rückert

“Paint your room inside,
that thine eye may rest upon it;
leave the outside of your house undecorated,
…that it may not provoke the eyes of the enemy.”

This little poem by Friedrich Rückert might be appropriate for your card if the person to whom it is adressed is a little superstitious. The belief that enemy glances at a house bring bad luck is not uncommon. Of course, this poem does not necessarily have to be related to superstition, as envy can also create a bad neighborhood climate in general. What is special about this saying is that it does not only consist of good luck wishes, but can also make a person think a little. So if you are looking for something special, this saying might be right for you.

Klabund

“Whoever steps over this threshold,
He brings goodness and cheerfulness with him!
If one of you comes here worried..:
The dust collector is at the door!”

Such a saying is suitable for everyone. Even people who are not so close, you can make a joy. Conceivable this saying would also be on the doormat in front of the house or the apartment. Who would like to make someone a somewhat larger gift to the moving in than a card, which could let manufacture a doormat with this inscription. Wondering where something like this can be done? Here we have found for you a website where it is possible: Matmaker.

Horst Winkler

“May you be quite happy here
Lots of sunshine inside too!”

Here again a short, beautiful saying that actually always fits. If it is just one person, you could just change the saying a bit. With such a saying you are on the safe side and can not go wrong.

“Learn order, love it, for it will save you time and trouble.”

Finally, a saying that stands out from the rest. Whoever writes such a saying on a card for someone to move in, should have a particularly close relationship with this person and know whether this person would take the saying with humor. Especially if it is the brother or sister with whom you have a close relationship and you know that they tend to be messy, this saying could be suitable and funny.

These were the best 8 move-in, move-out sayings we found for you. Whether for your card, your gift, your wall or even your doormat, we hope that the right saying was there for you.

More tips? The 3-part special on the subject of moving:

1. Part – Moving Checklist: Moving, Schedule & Packing
2. Part – Moving Tips: Moving house & apartment without stress
3. Part – Moving in & congratulations: The most beautiful sayings

DIY store assortment: Garden, Bathroom, Kitchen & Co.

In our list of home improvement store recommendations for Frankfurt (a bit further down in the article) are only selected stores with nearly full product lines. These include:

• Garden & Leisure
• Bathroom & Sanitary
• Kitchen
• Hardware
• Tools & Machines
• Electrical & Lights
• Heating & Climate
• Flooring
• Tiles
• Colours & Wallpapers
• Cleaning & Household
• Living & Decoration
• Windows, Doors & Stairs
• Building materials
• Car & Bike Accessories

Bauhaus – When it has to be good

Bauhaus has been selling only the best from the workshop, home and garden sectors since 1960. Since the beginning, the most important principles here have been a large selection, the best quality and all that at reasonable prices. The store continues to evolve and now also offers practical tools, such as a drive-in area.

Hanauer Landstr. 517-543, 60386 Frankfurt, Germany

https://www.instagram.com/p/Bw_wopKolsk/

Hornbach – There is always something to do

Hornbach represents 6 basic principles that make the DIY store something special. The best selection & quality, the fairest price, expert advice and tools such as a drive-in area and building materials pick-up are just some of the main reasons to choose Hornbach. The DIY store even offers a handyman service to provide customers with the best help for all projects.

Hanauer Landstraße 477, 60386 Frankfurt, Germany

https://www.instagram.com/p/Bwtau2NF5IN/

Obi – Everything feasible

Obi is probably the largest DIY chain in Europe with 654 stores across Europe in 2016. They offer both technology and garden & leisure products but also furnishings for kitchens and bathrooms. With their large assortment and years of experience, Obi is probably always a good choice.

Mörfelder Landstr.129, 60598 Frankfurt

https://www.instagram.com/p/BwpB43CBkY6/

Hagebau – Here one helps oneself

Hagebau has a wide range of products. A garden centre, tools & machines, building & renovation, bathroom & kitchen furnishings, living, fireplaces, bicycle & car and even pet supplies are the areas in which Hagebau offers products. Throughout Germany, there are countless stores that offer a wide variety of brands, creating many alternatives for customers.

Dieselstr. 11-13, 61184 Karben, Germany

https://www.instagram.com/p/BvL_uTxoolN/

Toom – Respect who does it himself

Toom belongs to the Rewe Group and is one of the leading suppliers in the German DIY sector with 330 stores in Germany. Here you will find not only tools, but also articles in the areas of gardening, construction, bathroom & sanitary and living & household. The DIY store focuses on good service and high quality products.

Friedberger Landstraße 323, 60389 Frankfurt-Bornheim

https://www.instagram.com/p/BwKAiAYHHm6/

Globus – Who builds, needs Globus

While Globus was originally a wholesaler of food and other goods, there is now also a separate home improvement section. The focus here is on customer satisfaction and the quality of the products. In addition to tools and building materials, the product range also includes lamps and electrical goods as well as paints and household products.

Albert-Einstein-Strasse 3, 63128 Dietzenbach, Germany

https://www.instagram.com/p/BwB-KdxFLCH/