As of August 2015, under the regime of the new EU Regulation on Succession Law everywhere in the EU except for in Denmark, Ireland and Great Britain the inheritance laws of such jurisdiction are applicable where the dececedent had his last residual abode prior to his death. This would also apply in regard to habitual abodes in countries that have not adopted the EU Regulation. No special connecting factor to a jurisdiction is stipulated concerning the location of real estate. In his will, the testator may opt for his home law. The EU Regulation ensures a legal harmonization between the adopting EU countries. However, divergent decisions from courts of other countries would not be enforcable.

Successions under German inheritance law are put into effect pursuant the rule of universal succession. This means that the heir automatically steps into the shoes of the deceased at the time he passed away. He obtains immediate ownership without any prior approval by a court or the need to file an acceptance of the inheritance.

Therefore, the heir is liable for the debts of the decedent. His liability is not limited to the assets forming the estate. In order to limit or even avoid his liability one is well advised to take the initiative and make use of the various measures and proceedings provided by the law.

Two or more heirs form a community of inheritance. They can dispose over any assets forming the estate only by unanimous consent. Measures in regard to the administration of the estate are subject to a majority decision. Every co-heir may immediately claim and sue for the dissolution of such community unless the decedent testated or the heirs agreed upon otherwise. In regard to real estate he has to initiate a compulsory partition by auction. The probate courts do not manage the process of the dissolution of the community of heirs and the distribution of the assets heirs.

Legacies, i.e. the gift of assets or an amount of money specified in a will must be performed by the heirs in order to fulfill the succession in this regard. The probate courts do not supervise the settlement of such bequest claims.

Heirs can renounce the accrual of a succession only within a specific period. In principal, such deadline expires six weeks after he/ she knew about both the succession and his/ her entitlement regarding the estate. Should either the inheritor or the decedent have lived abroad this period is extended to six months. The renouncement must be effected and delivered at the local competent probate court by that time. In general, the signature on such declaration must be notarised by a German notary or the German general consulate.

Unless the deceased arranges his succession by making a will or concluding a contract affecting the devise of his property his spouse or his/ her inscribed same sex partner and his descendants are called to succession. Should no descendants exist his parents and their descendants (i.e. the siblings of the deceased) will be entitled to inherit instead. Consequently, the widespread assumption that the spouse is always entitled the sole intestate inheritance is wrong in most cases.

The inheritance quota of the spouse according to German law depend on the matrimonial property regime the married couple lived with. Thereby, the law distinguishes between the separation of property, the joint property and the community of surplus with the latter being the German statutory matrimonial regime. Unless the spouses have agreed otherwise the matrimonial regime of such country would apply where the spouses had their habitual residence at the time of the marriage. Consequently, foreign property regimes are somewhat adjusted in order to fit with the German legal inheritance system.

According to German law, only testaments which were completely handwritten as well as notarial recorded testaments are valid. In contrast, witnessed testaments allowed in many English speaking countries are unknown in German civil law. However, in cases involving testators of a foreign citizenship wills which comply with the formal requirements of the foreign jurisdiction are acknowledged in Germany, too. The same applies if the will is written abroad or if the testator has his residence abroad. As a consequence, testaments of a somewhat international background regularly do not fail at the German courts.

The proper interpretation of a will does not provide a strict adherence to its wording because the decedent´s intention prevails the way how he expressed it. Therefore, one could additionally refer to other indications and evidence apart from the will for the interpretation, such as letters or oral remarks. For instance, it may occur that a decedent used technical terms which he may had not understood completely. One might also object against a settlement relying on the will´s wording on the grounds that this approach would imply a deviation from the decedent´s initial concept of distribution not being reflected in the will anymore owing to a fundamental change of the factual situation after its establishment. However, such asserted concept must be make itself heard at least in the outlines of the will.

Rights to a compulsory portions for disinherited close relatives or even to an augmentation of such compulsory portion in view of the testator´s donations prior to his death may arise in shape of a claim for money compensation. Under specific circumstances a partly disinherited individual might have to waive his insufficient or subsequent rights of inheritance or legacy beforehand. In other cases, an heir might be entitled to claim for an additional monetary completion of his insufficient testamentary share.

Spouses as well as the offspring of the decedent are entitled to a compulsory share. Should no descendants exist the parents of the deceased would be entitled but not the siblings. The compulsory share is a money claim and amounts to half of the value of the legal share. It is computed on the basis of the estate value less the related debts. Furthermore, donations effected by the decedent may also affect the quota. The German probate courts supervise neither the assertion of such share nor their settlement. The person entitled to such share will have to pursue his claims against the heirs in our out-of court. Entitlements for the compulsory share become time barred three years since the person concerned has become aware of the succession and the will affecting his legal share.

Children of a male decedent which were born out of wedlock after June 30, 1949 have been legally equated with legitimate children since April 1st, 1998. However, this does not apply to children which have agreed with the decedent upon an early equalization of inheritance according to the former regulation as stipulated in § 1934 d of the German Civil Code.

The local court (Amtsgericht) that is locally competent for district where the deceased had his/ her last residence is also competent for dealing with the estate (Nachlassgericht). Should the deceased have had his last residence abroad the court at Berlin Schöneberg would be locally competent. The law offices of Henning M. Haarhaus are situated in this district.

German courts have only a limited functions in comparison to the probate courts operating under common law jurisdictions.

Original copies of all (present and former) wills have to be delivered to this court without undue delay. The court opens the wills and send authorized copies to all individuals involved including family members who are not mentioned in the will but who could nevertheless be entitled a forced share. For this reason the current addresses of all close relative should be disclosed to the court promptly.

A curator is appointed only by the court in regard to the quota belonging to an unknown heir. Such administrator would represent this unknown individual in the course of the administration and partition of the estate.

In order to facilitate the settlement of his estate a testator can appoint an executor in his will with full power of disposition. Upon a respective application, the court issues a certification of executorship (Testamentsvollstreckerzeugnis) as a means for identification of the designated executor. As an alternative, the devisor can also grant someone trustworthy power of attorney effective after his death. However, such agent is not under any control of the court and such power can be revoked by any heir at any time.

German executorships need not to be limited to the settlement of an estate. As German law does not acknowledge trusts the arrangement of a permanent execution in a will may grant similar results.

A foreign executor whose function is comparable with the one of a German executor (which is always to be reviewed!) can be “qualified” in Germany as executor, too. Like a German executor, he does not need any formal recognition or appointment by the courts. A foreign “letter of execution” or “verification letter” which has been adopted by an internationally competent foreign court is to be accepted principally if it is comparable to the German certificate of executorship. However, land registries often request for rectification of the land register a German certificate of executorship. This problem does not arise if a notarially recorded testament with opening minutes can be submitted.

Upon application German probate courts issue certificates of inheritance (Erbschein). These certificates serve as a means of the inheritors´ identification to third parties and they are only required upon such third party´s request like banks or the land registry. A grant of probate from British or American courts do not serve as substitutes. However, a certificate of inheritance is not needed if the succession can be proved with a will that has been recorded by a German civil notary or a competent consul. In that case, notarised copies of the testamentary disposition and the minutes of the opening usually serve as sufficient proofs for the succession.

Should a certificate of inheritance be needed in order to settle the estate one inheritor can apply for such certificate on behalf of all inheritors at the probate court, at a German notary or at the general consulate. All information given by the applicant on the succession must be proved with original documents (death certificate, family book, will) and an affidavit of the applicant which has to be sworn at the office of a German notary public, the court or the general consulate.

The rectification of the land register is free of charge if applied for at the district land registry within to years since the succession.

The succession/ donation has to be reported to the competent tax office within three months. Furthermore, banks inform the tax office of the succession automatically. After being informed by the tax payer the tax office will furnish the forms of the tax returns to him. Banks, insurance companies and other financial institutions may demand from heirs who do not reside in Germany a tax clearance certificate. This is issued by the tax office after the taxes have been paid or after the tax office has assessed that no tax has become due.

Gifts and successions by reason of death are taxed similarly. The law distinguishes between residents and nonresidents. Provided that either the donator/ deceased or the recipient of a donation/ inheritor is/ was a resident in Germany (unlimited taxation) all transfers of assets located world wide are liable to the German taxes. In contrast, the citizenship of the individuals involved in the transfer is not a criterion for the German taxation. However, in contrast to foreigners, German citizens are deemed still residents for another five after having moved away from Germany and even stricter regulations apply for moves to countries which are usually paraphrazed as tax havens.

Gifts which an inheritor received from the deceased within ten years before his death are added to the share of his estate.

The donation or succession upon death in regard to property serving as a residence/ family home may be tax exempt under certain conditions.

Household and personal belongings may be tax exempt for spouses, inscribed same-sex partners, children, grand and step children unless their value exceeds an amount of 41.000 €.

Minor children as well as spouses (the latter only in particular circumstances) may claim for an additional maintenance/ retirement exemption.

Leased property located in the EU is priced only with 90 % of its current value. For the succession of businesses particular deductions apply.

In case of unlimited taxation individual tax exemptions for gifts and successions are granted as follows:

Transfers which are subject to limited German taxation only (i.e. transfers of assets located in Germany between non-residents in Germany) are tax exempt to an amount of only 2.000,00 €. However, the European Court of Justice has recently ruled the different treatment of residents and non-residents an offence against the freedom of movement of capital.

The following positions may be deducted from the gross value of the estate:

The applicable tax rate depends on the familiar relationship of the donee/ inheritor to the donator/ deceased and on the value of the gift/ their share in the estate. For recipients as mentioned below the tax rates are as follows:

Spouses, inscribed same-sex partners, descendants and step children, and parents in the event of death only:

Divorced same-sex partners and spouses, parents in regard to donations, step parents, parents in law, siblings and their children:

Any other recipient will be taxed at a rated of 30 % if the net value of the estate/ of the donation is below 6.000.000 € and at a rate of 50 % if it exceeds this amount.

In order to avoid a double taxation in two countries the foreign tax burden may be deducted from the German tax burden wholly or in part. Moreover, Germany and several other countries such as the U.S. have concluded a double taxation agreement regulating the deduction of taxes levied by one country from the tax burden of the other.