Although it is rare, there are parents who are strongly against their offspring inheriting anything from them after they pass away. In the US, you have the “testamentary freedom” to leave your wealth to whomever you like – at least according to the Inheritance Act of 1975. Theoretically, this means that you have the option to disinherit your children altogether. In Germany (and other European countries like France or Austria), on the other hand, things are a little complicated. If you live in a European country or have a close relative there, you may want to read on to understand how German disinheritance laws work.
German Children Inherit Automatically!
German children are entitled to a portion of their parents’ wealth even if they were explicitly disinherited. This is because, under German succession law, close relatives have the right to a statutory, indefeasible compulsory share, called “Pflichtteil”, of the deceased’s estate. As such, they are allowed to claim a share of the inheritance even if the last Will and testament of the testator says otherwise. This law applies to:
- The surviving spouse
- The descendants (i.e. children, grandchildren, and so on)
- The deceased’s parents (but only if the deceased does not leave behind any descendants)
As a result, making a Will can be particularly difficult for testators based in Germany who are really adamant about disinheriting a close relative. If they decide to leave everything to one person, close relatives can still claim a portion of the inheritance due to the German Pflichtteil law. According to this law, the relatives can claim up to 50% of the whole estate value, depending on who survives the deceased.
Can you use lifetime gifts to circumvent the Pflichtteil law?
The actual Pflichtteil is determined by the net value of the entire estate after subtracting funeral costs and debts owed by the deceased. One of the most commonly asked questions about the Pflichtteil law is whether it is possible to circumvent it using lifetime gifts. Under German law, however, any lifetime gifts made within 10 years of the testator’s death is included when calculating the total estate value.
Making a Pflichtteil claim
If a close relative of the deceased makes a Pflichtteil claim, the heir (or the community of heirs if more than one) is required to disclose the entire value of the estate and any lifetime gifts the testator made within ten years prior to his or her passing. Once this information has been disclosed, the claimant is entitled to instant payment even if the heir does not have any liquid cash and the inheritance is only in the form of real estate. The claimant can file a lawsuit in court if the heir(s) prove to be uncooperative. When this happens, the claimant will likely win the lawsuit because there is barely any defense against the claim.
If you believe you have a strong inheritance claim to the estate of a close, deceased relative in Germany, Graf & Partners, LLP can help you with your case. Get in touch with us today to learn what your options are. You can also watch the video What are “Forced Heirship” Rules? for more information.
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