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Last Wills and Testaments

by | Jul 29, 2017 | Aachen, Firm News, Munich, Wills |

Whenever an estate consists of assets both in the USA and in Germany, there are several issues that need to be taken into consideration in order to avoid complications. Especially in terms of inheritance law, the legal provisions in these both countries differ significantly in procedural and substantive respect.

A German last will or testament can be established in several ways, personal or with the help of a notary. The most common form is a hand written testament. Such a testament needs to be written fully by hand by the testator and signed underneath the hand written text. A notarized testament is established by and before a German notary, it is not handwritten, certified and afterwards given into custody of the court or another public entity.

In the United States, most testaments are established by drawing up the testament in front of two (in some states three) witnesses and having them sign the document additionally to the testator’s signature.

It is important to avoid situations in which different assets are subject to the law of a country which deems the specific testament as invalid due to form requirements. There are several possibilities to do so:

  • 1. By establishing a testament in accordance with the form requirements from both countries. However, it is important to pay attention to the federal differences in the US.
  • 2. By establishing two individual testaments of the same content. One for each country where a part of the estate is located and established according to the legal requirements of said country.
  • 3. By establishing two individual testaments with different content in order to take the different legal options of both countries into account.
  • 4. By establishing an international testament according to the provisions of the Washington Agreement.

Settling the estate with a testament is especially useful, when the testator does not hold the citizenship of the country he lives in, e.g. the testator is a US citizen but resides in Germany, and owns assets in both countries which are part of the estate. This situation often leads to a split heirship, which means a part of the estate needs to be settled according to German law whereas the other part of the estate is settled by the law of the US state. Such constellations need to be handled with particularly great care.

An example:
A US citizen who resides in Germany has both movable and immovable assets in the US and in Germany.

According to German International Inheritance Law, the applicable law in regards to the immovable assets is the law of the US, as he was a US citizen at the time of his death. According to US law, the applicable law in regards to the immovable assets is the law of the country in which the property or several properties are located. Should the testator own a property in Germany, the German law is applicable as there is no further referral. Properties in the US which are part of the estate are settled by US law.

However, there is a special rule regarding immovable assets which are located in Germany. According to German International Inheritance Law, the testator may choose the applicable law between the law of the country of his citizenship or his residence.

In regards to the movable assets, US law is applicable according to German International Inheritance Law, which   applies the principle of domicile. Once the testator resided in Germany at the time of his death, German law is applicable in regards to the movable assets in Germany. In regards to the assets in the US, US law is applicable.

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