The advantages of adoption under inheritance and tax law are manifold. For example, adoption can be beneficial when transferring a property to the adopted child. Under German law, children, including those of full age, can receive a tax allowance of up to €400,000 as part of a gift or inheritance. For more distant relatives and non-relatives, however, this is not an option. For example, the tax allowance for nieces and nephews is only €20,000. Adoption can therefore be in the interests of the testator and the inherited. The tax rate itself also varies depending on the degree of the relationship. While this is about 7% for children and grandchildren, the tax rate for non-relatives is about 30%.
It becomes clear that the legal status as a child created by adopting the adult becomes more attractive, especially if the adult is to enjoy the full benefit of the inheritance. Accordingly, adopting an adult (be it a distant relative or a close friend) plays a role in practice, particularly when a wealthy family has no children and wishes to pass on its assets to another person.
Indeed, the courts are usually aware that tax advantages often play a significant role. However, an application is rarely rejected for this reason alone. As long as the legal requirements (explained later in this article) are met, such an adoption may also be legitimate. However, it must be shown that the adoption is not being made solely for these considerations. This proof can cause difficulties in practice. It must be clear from the documents served on the court that the adoption is sought primarily because of a particularly close relationship between the adopter and the adopted person. It may be advisable to seek legal advice before submitting the relevant documents for adoption to avoid any adverse consequences in the adoption proceedings.