Do you own assets both in the U.S. and Germany? When an estate includes assets in both the United States and Germany, several legal complexities must be considered to ensure a complete and successful inheritance process. The inheritance laws in these two countries differ significantly in both procedural and substantive aspects, making proper estate planning essential to avoid disputes or invalid provisions.
In Germany, a last will and testament can be created either personally or with the assistance of a notary. The most common type is a handwritten will, which must be entirely written and signed by the estate owner. Alternatively, a notarized will is prepared before a German notary, certified, and then placed in the custody of a court or public entity. In contrast, wills in the United States typically require the estate owner’s signature in the presence of at least two (or in some states, three) witnesses. This difference in formal requirements can lead to complications if a will is not recognized in one jurisdiction due to improper execution.
- To prevent issues arising from conflicting legal standards, will-makers with assets in both countries have several options:
- Drafting a single will that meets the formal requirements of both nations, keeping in mind the varying state laws within the U.S.
- Creating two separate wills—one for each jurisdiction—while ensuring consistency in content to prevent contradictions
- Tailoring two wills with different provisions to take advantage of the unique legal benefits each system offers;
- Establishing an international will under the Washington Agreement, which provides a framework for cross-border testamentary planning.
These strategies are especially important for individuals who reside in one country but hold citizenship in another, such as a U.S. citizen living in Germany with assets in both countries. Without proper planning, an estate may be subject to split heirship, where different parts of the estate fall under separate legal systems, requiring careful coordination.
For instance, consider a U.S. citizen residing in Germany who owns both movable and immovable assets in each country. “Movable assets” refer to belongings that can be physically transported, such as money, jewelry, cars, or stocks, while “immovable assets” are fixed properties like land or houses. Under German international inheritance law, the rules differ based on the type of asset. Real estate (immovable assets) located in the U.S. is governed by U.S. law, while property in Germany falls under German jurisdiction unless the will-maker specifies otherwise. For movable assets, German law applies to assets located in Germany if the deceased was domiciled there, whereas U.S. law continues to govern assets within the U.S. Given these legal intricacies, careful estate planning is crucial to minimize conflicts, ensure legal recognition, and protect heirs from unnecessary legal challenges.
At Urban Thier & Federer, P.A., we specialize in international estate planning and inheritance law, helping clients navigate the complexities of cross-border assets and succession planning. We have multiple offices in both Germany and the US and our team of attorneys is well-versed in both U.S. and German legal systems, ensuring that your estate is structured in a way that honors your wishes and complies with relevant laws. If you have assets in both countries and want to secure a seamless transfer to your heirs, contact us today to discuss your estate planning needs.