American/US citizens and US residents inheriting in Germany
We are often contacted by American clients who have been notified that they are – or maybe- heirs to an estate in Germany. Regularly, this causes confusion and the need for local German legal advice. Urban Thier & Federer can through its Munich office act on behalf of such clients and ensure an efficient communication with the American client, in particular advising such clients of the particular differences between the German and the US probate regime.
Various issues can be of particular concern to our US heirs and clients:
- 1. The heir under German law – irrespective of the heir being American or German, or living in Germany or the US- becomes the immediate legal successor of the deceased (“universal succession”, § 1922 I BGB), alone or jointly.
- 2. There is no “estate” as such, meaning there is no legal shield from liability. This means, without timely declining or rejecting of the whole inheritance, the heir may become responsible for the debts and liabilities of the deceased.
- 3. There is often an issue in German American inheritance/probate matters as to the applicable law. Under German law, the law of the country applies where the deceased had his/her residence/domicile at the time of death. In contrast, in the US, the question which law will apply has to be determined on a case by case basis. The question of applicable law can have a major impact with regards to the formal requirements of a will, and with regards to the question if a “mandatory share (“Pflichtteil”) may have to be paid by the heirs.
- 4. If the deceased owned assets in both Germany and the US, probate proceedings both in the US and in Germany may be necessary. In our experience, courts in Germany as well as in the US tend to apply their own laws regarding assets in their respective jurisdictions. Our US colleagues are experienced in assisting with the US part of an estate.
Here a few legal principals of German inheritance law with particular relevance to US heirs:
- A holographic will without witnesses is valid in Germany.
- Upon the moment of death, the entire assets AND liabilities of the deceased pass, without any intervening legal action, to the heir or heirs, irrespective of their residence or nationality.
- If an heir does not want to accept the inheritance, he must reject/decline it explicitly. Such rejection of an inheritance is to be done in a formally valid manner. Obviously, prior to rejection, such heir must have been properly notified of the inheritance and must be aware of what assets and liabilities are part of the “estate”.
- If the deceased passed without a will, or with a formally invalid will (careful, machine written wills, with witnesses, as they are common in the US, are not valid in Germany, unless set up in front of a GERMAN Notar (not a US notary public), the deceased is considered to have passed “intestate”: Similar to the US, in such case, the family of the deceased inherits.
- There are specific rules as to which family members inherit what share of the inheritance. However, if they are heirs, they are all legal successors to the deceased, irrespective of the size of the share.
- The mandatory share can be claimed by close relatives if they are not considered in a will. The mandatory share is half the share of the inheritance a person would have inherited intestate.
If you are an American or living in America, and you have been notified by the “Nachlassgericht” (German “probate court”) that you are or maybe an heir to a German estate, please contact us if you feel that you need legal advice. Urban Thier & Federer is an international law firm and has German and American lawyers on staff who are experienced in such matters.
This article does not constitute legal advice, but shall serve merely as an overview of German inheritance law in as far as it we feel it is particularly relevant to American and other international heirs in Germany. If you feel that you need legal advice, please contact an attorney with specific legal knowledge in this area. The hiring of an attorney is an important decision which should not be based on an advertisement or a published article alone.