Inheritance & Inheritance of Real Estate

Never before has so much been inherited in Germany as this year, reports NDR. It continues, “According to the German Institute for Economic Research (DIW), up to 400 billion euros are inherited or given away every year.”

You can find the report in the NDR media center:

• Dispute over inheritance: How does a good will go?

Dispute in the community of heirs and partition auction

We have already reported on the topic of disputes in the community of heirs in the blog. If a deceased person leaves several heirs and the division of the estate among the heirs is not consensual, the division is determined by law. Since the estate is a joint asset, the co-heirs can only dispose of the inheritance jointly.

If this joint disposition does not work, each co-heir can demand the dissolution of the community of heirs at any time and pursue this independently. In this case, the individual co-heir can dispose of his share in the estate as a whole, but not of his share in individual assets.

• Dispute in the community of heirs

If the heirs are in dispute, a partition auction, a specific form of forced sale, is sometimes held. The aim of the partition auction is to convert the assets into a divisible sum of money and divide them among the co-owners.

An excerpt from Monday, April 25, 2022, 22:00 to 22:45 with our TV expert Jan Rickel.

Image source: 45 Min Reportage / NDR

Read even more on the topic here:

Will, house and compulsory share

The distribution of a deceased person’s assets can be recorded in a written declaration before death, which is the will. Every person is capable of making a will from the age of 16 and does not need a notary in the case of a handwritten will, as the testator draws it up himself by hand.

However, if one wants a notarized will, this must be notarized by a notary public, where the costs for this depend on the value of the estate. For clarification, the document should be labeled “Will” or “Last Will” and at the end it should be signed by the testator and dated. If there are several wills, the will with the most recent date is authoritative.

• Will
• Mandatory share

Inherit without a will?

The law of succession comes into force if there is no will. This regulates who receives the assets of the deceased after a death and how this is done. Communities of heirs may be formed if there are several heirs and the estate passes into their possession.

Communities of heirs are formed automatically after the death of the testator if there are several heirs. These must then divide the estate among themselves and make joint decisions about inherited property, such as real estate. If you want to decide for yourself which relatives inherit which property, you should draw up a will and regulate everything in detail.

• Heirs without a will

What is important when selling the family home

Before the real estate agent can act, some basic facts must be clarified. Only those who are listed in the land register and are therefore the legal owners of the parents’ house are allowed to sell. In most cases, both parents are listed as owners in the land register, so that in the event of death, the surviving parent counts as the sole heir and decides how to deal with the property. If both parents are deceased, you as the children are the next heirs and can decide to sell the parental home, provided there is agreement.

In advance, a change in the land register entry is necessary, as your regular ownership is the basic requirement for the sale of the parents’ house. It becomes very complicated if one parent is already deceased and the other parent is no longer legally capable. In this case, if there is no general power of attorney and the surviving parent does not want to sell the property, only a guardianship court can decide on the sale.

Make arrangements in good time!

We recommend that you make such arrangements at a time when your parents and property owners are legally capable. A notarial power of attorney or a gift of the house during your lifetime simplifies your ability to act in the event that you have to sell your parents’ house and use the proceeds to finance, for example, the accommodation of your parents in a nursing home. Once all necessary matters have been clarified in advance, we can sell your parents’ house promptly and at the real market value on your behalf.

Selling your parents’ house? The process in detail

More information about inheritance:

Inheritance settlement

Properties inherited in community pose a particular difficulty when selling. Within the framework of a community of heirs, there are several owners in the land register. This circumstance has a detrimental effect on the interest of potential buyers and makes the sale process more difficult. There is a solution to simplify the settlement and at the same time provide for a clear guideline of all heirs with equal rights. The settlement of an estate refers to the dissolution of a community of heirs, which is carried out on the basis of clear contractual regulations and is not bound by any particular form. Everything you need to know about inheritance settlement.

Community of heirs

From practice it is known that a community of heirs rather rarely agree. But from the disagreement and open disputes in relation to a real estate inheritance arise losses that you can avoid with prudence. Avoid conflicts about the estate by consulting an estate agent and finding the best way with support. If the will does not provide otherwise, all co-heirs are equally entitled and obliged. This means that a sale is often the best solution and gives you the opportunity to divide the proceeds of the estate between all the co-heirs, thus avoiding the problem of an inheritance dispute. Learn more about the community of heirs.

Certificate of inheritance

You are registered in the will as the sole heir of the parental home. If the will is notarised and legally valid, your inheritance will not be challenged. Nevertheless, without an additional certificate of inheritance, you will face a problem at the latest if you become the owner of the property as a result of the correction in the land register and wish to sell it on, for example. You should have a certificate of inheritance issued irrespective of the will and thus protect yourself when inheriting houses or apartments. Everything about the certificate of inheritance.

The testator is free to decide how much he wants to bequeath to whom

The testator is completely free to decide what should happen to his assets after his death. However, in order for a will to be truly valid, it is important that the testator is familiar with the specifics of drafting a will. Small mistakes in the wording can already lead to parts of the will not being interpreted correctly or not being valid in the first place. For this reason, it is of absolute necessity that the will is legally unambiguous.

Facts about the compulsory part

Close relatives cannot be completely excluded from the testator’s inheritance. Even in the event of disinheritance, which was agreed in the will, the relative can sue for the statutory compulsory portion. Incidentally, disinheritance can be effected without giving reasons.

Therefore, it does not make sense for the testator to disinherit a person who is entitled to the compulsory portion. This only leads to disputes. Inherited is nevertheless.

The compulsory portion is half of the statutory share of the inheritance. The compulsory portion is not automatically awarded to the heir by the probate court. The compulsory portion is also not noted in the certificate of inheritance. This means that the compulsory portion must first be claimed by the beneficiary of the compulsory portion from the other heirs.

However, there are special circumstances in which the testator is entitled to disinherit the child in such a way that the child cannot inherit the compulsory portion. This is the case if the child has been sentenced to a prison term of at least one year without probation for a criminal offence.

If a child is also to be deprived of the compulsory portion, the testator must record the motives in the will. Another legally valid reason is when the beneficiary of the compulsory portion seeks the life of the testator or another close person. If the beneficiary of the compulsory portion is guilty of a crime such as theft or bodily harm against the testator, he or she may also be deprived of the right to the compulsory portion.

Entitled to a compulsory share?

But which persons count as next of kin and are therefore entitled to a compulsory portion? This includes children. It does not matter whether they are biological or adopted children. If the testator was married at the time of death, spouses also count as close relatives. The same applies to a registered civil partnership. If the deceased has no children, the parents count as close relatives. Siblings of the deceased, on the other hand, are not entitled to a compulsory share.

The heir’s compulsory portion may be increased if the testator made gifts to other relatives up to ten years before his or her death. This is a claim to a supplement to the compulsory portion. This is the case, for example, if the testator gave away a property five years before his death. The beneficiary of the compulsory portion can demand that the compulsory portion is now calculated as it would have been if the gift had not been made. His or her compulsory portion increases as a result.

It should be noted that the beneficiary of the compulsory portion is not the owner of the estate. He therefore has no say whatsoever in what is to be done with the estate.

The legal succession must also be observed in the will if it is not to lose its validity. If the succession was not observed by the testator, the person concerned can enforce his or her claims in court.

If the claim to the compulsory portion is not asserted within 3 years after the death of the testator, the claim loses its validity. In addition, the claim to the compulsory portion only becomes valid when the testator has died. The compulsory portion cannot be claimed during the lifetime of the testator.

Inheritance and bequests: Compulsory portion

Calculate compulsory part – instructions

Legal succession in the case of inheritance

Legal succession always applies if the testator has not made a will. If there are no relatives, the inheritance passes to the state. However, this is hardly ever the case in Germany.

In the law of succession, kinship is divided into different degrees of order.

If heirs of order I exist, heirs of order II are completely excluded.

The children of the deceased as well as the grandchildren belong to the degree of order I. The children inherit in equal shares. If one of the children is already deceased, his or her children inherit.

Second cousin

If a deceased dies leaving neither children nor grandchildren, the second-degree relatives inherit. These include the parents of the deceased and the siblings. If a sibling has already died, the inheritance passes to their children, the nieces and nephews. If there are no second-degree relatives, the third-degree relatives are the grandparents and their children. These are then the aunts and uncles and the cousins.

Spouse

If no marriage contract has been agreed and the principle of community of accrued gains applies, the spouse of the deceased receives half of the inheritance alongside the children. In addition to the parents and siblings, the spouse even receives three quarters of the inheritance.

This can become dangerous if, for example, a property is inherited. In this case, the spouse has no sole claim to the property. In order to avoid this problem, many spouses opt for the Berlin will.

Berlin will

In a Berlin will, the longer-living spouse inherits everything. The children are excluded as heirs. Only after the death of the second spouse does the inheritance pass to the children. In this way, the property passes to the spouse without an inheritance dispute. However, even in this case, children can override the testator’s last will and claim the compulsory portion.

To prevent this from happening, the will can be amended to include a penalty clause in the event that the compulsory portion is claimed. However, this usually does not have the desired effect of the testator. Children can nevertheless claim their compulsory portion after the death of one parent. However, this becomes economically less attractive, as the inheritance is higher after the death of the second parent.

Parents are not obliged to treat their children equally in their wills

Parents are not obliged to treat their children equally in the will, even if this could avoid disputes after death. However, it is not possible to bequeath certain items of the estate only to certain children. For example, that the first child should inherit only the real estate, while the second child should become heir to the securities. Instead, it is only possible to determine with which quota the individual child receives how much of the total inheritance.

Will and custody

For the testator’s will to be valid, it must be handwritten and, of course, signed. It is absolutely fatal to type the will on the computer for the sake of better legibility. Even if it is signed, it is not valid.

Most testators choose to keep their wills at home. However, this carries the risk that it will be lost, cannot be found after death or that one of the heirs will make it disappear if it falls into their hands and disadvantages them.

It is therefore more advisable to place the will in the care of the probate court. This ensures that the will will be used in any case after the death of the testator. Anyone who decides against this form of safekeeping would do well to inform a trustworthy person about the existence and location of the will.

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

Division Agreement

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.

Division

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.

Selling an Inheritance Share

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.

Arbitration

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.

Division Auction

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.

We would be happy to advise you personally with regard to your inherited property. Get in touch with us.

Legal Portion Despite Disinheritance – You have these Rights

In many families there are conflicts, which often lead to parents wanting to disinherit their children. The parents must determine this wish in their will. Much more common, however, is the desire to disinherit the children only until both spouses are dead. This is possible with the so-called Berlin will. The longer living spouse is therefore first the sole heir and only after his death the common children inherit. Learn here which alternatives the law offers and how the legal portion is determined.

Disinheriting Relatives – Will, Inheritance Contract, Berlin Testament

Basically, each person is free to decide who to appoint as heirs and who to disinherit. The testator does not have to justify in his will why he excludes a relative from the succession. However, an exclusion does not mean that the heir receives nothing, because every heir is entitled to a compulsory portion. This entitlement must be requested by the heir himself, because the certificate of inheritance does not mention these entitlements to a compulsory portion. If a testator sets a person as sole heir, this means on the one hand that this person alone inherits the entire estate but also that no one else should inherit who would actually be entitled to inherit.

Married couples can disinherit close relatives together in an inheritance contract or a Berliner Testament. In a classic form of the Berlin Testament, the spouses stipulated that the partner who lived longer would become the sole heir and the children would only inherit when both spouses had died. The parents therefore disinherit their children until both have died. If someone is disinherited, the part of the inheritance that would have been due to this heir is due to the person who would have become heir if the disinherited had already died at the time of the inheritance.

The Entitlement – Only the Next of Kin Receive the Compulsory Portion

Despite disinheritance, close relatives are entitled to part of the assets. This fact is based in the law on the duty of care that the deceased has for his close relatives even after his death. However, this applies only to the next of kin, which, according to the law, are determined as follows: Close relatives include legitimate, illegitimate and adopted children, the spouse, as long as the marriage is still effective at the time of inheritance, partners in a registered same-sex partnership and parents of the deceased, if there are no children. Grandchildren are only eligible if they have been excluded from the inheritance and their parents are no longer alive. Siblings and grandparents of the deceased are not entitled to a compulsory portion of the inheritance and are therefore not to be understood as close relatives. Whoever is disinherited must assert a right to the legal portion of heir’s estate against the other heirs.The Amount – this is how the compulsory portion is calculated

The compulsory portion is half of the legal inheritance that the person is entitled to. For the exact calculation, all relatives must be taken into account, both the heirs and the disinherited, as well as those who have rejected the inheritance. Those who are not taken into consideration are those who have already renounced the inheritance during the testator’s lifetime.

The example explains the distribution of the inheritance as follows: There is a testator who leaves three children as heirs. Child1 has already rejected the inheritance during the testator’s lifetime. Child2 has been disinherited by the testator and must claim his compulsory portion from Child3, who has been designated as sole heir in the will. In a normal inheritance case, each child would receive one third of the estate. Since Kind1 has already waived the inheritance during his lifetime, this is removed from the calculation. The inheritance is therefore divided half each between Child2 and Child3. As Child2 was disinherited, he is only entitled to the legal portion of heir, i.e. half of his actual inheritance. Child2 thus inherits a quarter of the inheritance and child3, as sole heir, inherits three quarters of the inheritance.</block quota>.
If the odds are clearly calculated, the value of the discount can be determined to find out how much is allocated to each odds. Decisive for this second calculation is the market value. Our property valuation explains the methods. This is based on the amount that the heirs could obtain in the event of a sale. For this determination it is often necessary to have the value of real estate, companies or land estimated by experts. The costs incurred for this, however, reduce the right to the compulsory portion. It is therefore advisable, especially for small estates, to determine the value without an expert and to agree among themselves on a compulsory portion.

Remove compulsory portion – these are the Testators’ Rights

Under special circumstances it is possible for parents to disinherit their children completely and also to withdraw the compulsory portion from them. This wish must be expressly ordered and justified in the will. The BGB sets out some reasons for a complete disinheritance. In § 2333 BGB the following is listed, who can be completely disinherited:

• Seeks to kill the testator or a close relative
• Has been sentenced to imprisonment without parole for a criminal offence for at least one year, or is being held in a psychiatric hospital or rehab facility for that reason
• Has committed a crime against the testator or a person close to the testator. This includes, for example, theft or bodily injury.
• Killed the testator or both parents

In general, it must be unreasonable for the testator to leave his share to the beneficiary of the compulsory portion as the minimum economic participation. No reason for a complete disinheritance is, for example, a child who has broken off all contact with the parents and does not care for them. If a child is disinherited in the will and the testator forgives this child however before the death, the disposition in the will is ineffective.

Claims for a compulsory portion are subject to a limitation period of three years. This begins with the end of the year in which the claim arose. As a rule, this means on 01 January of the year following the year of death.

The Most Important Questions on the Subject of the Legal Portion of Heirship

The issue of the compulsory portion and disinheritance in the will is a difficult one that often raises questions among those affected. To ensure that you are well informed and do not make any mistakes regarding deadlines or form, the Lukinski experts will answer all important questions on the subject of the legal portion of heir.

How much is the compulsory portion in percent?

The compulsory portion of a disinherited relative is half of the inheritance share that is actually due. The percentage must be determined on a case-by-case basis, as it depends on how many co-heirs there are and how much of the inheritance is.

How high is the compulsory portion with 3 children?

If the inheritance is divided equally among three children, each would receive one third of the estate. If one of the three is disinherited and therefore demands the legal portion of heir, he would receive half of the inheritance that he would actually have been entitled to. In this example one sixth of the inheritance.

Can a compulsory portion become time-barred?

A compulsory portion shall become time-barred after three years. The period begins on January 1 of the year following the year of death.

Can the compulsory portion be refused?

In order to receive a legal portion of heir, the heir must claim it. If he does not do so, the claim expires after three years. The heir with a right to the compulsory portion does not have to reject it, but simply does not have to claim it.

What is the compulsory portion in the case of disinheritance?

If an heir has been disinherited by the testator in the will, the testator is still entitled to a legal portion of heir. This compulsory portion amounts to half of the legal inheritance.

Can the compulsory portion be claimed during one’s lifetime?

The compulsory portion can be paid by the testator during his or her lifetime in the form of a gift or compensation to the disinherited relative. A claim is not possible, only an agreement with the testator allows this alternative.