German-American Probate Law and Estate Planning: Legal Advice

When drafting a will in Germany that needs to consider either US-based assets or heirs, consulting with a legal professional will ensure that you avoid common pitfalls. Our lawyers will outline the primary differences between inheritance law in Germany and the USA, such as differences in estate and inheritance tax matters and how German law is applied on a federal basis and applied in the same manner nationwide. Succession cases in the USA and Germany, follow completely different regulations and procedures. Therefore, even if a US citizen has resided in Germany for many years, and has a strong grasp of the language, business culture and more, professional legal counsel is strongly advisable.

At Schlun & Elseven Rechtsanwälte, our inheritance law team has assisted global clients with estate planning and preparing wills. Our lawyers will advise you regarding drafting, revising and, if necessary, revoking wills in Germany, the opportunities and downsides of the inheritance contract and on important concepts under German law, such as the community of heirs, the compulsory share of inheritance and more.

Should a US citizen based in Germany seek to have their final will and testament carried out under US law, our legal team will advise them on the steps needed to ensure that will happen. Similarly, we can carry out the necessary steps to ensure that German inheritance is followed to the letter. Our team will expertly advise and support you with the legal issues that arise in German-American succession cases in all matters relating to German inheritance and German inheritance tax law, the EU Succession Regulation and double taxation in the field of German inheritance tax.

Under German tax law, there is generally no requirement to file estate tax returns as the estate is not recognized as an independent entity. However, with inheritance tax heirs are taxed individually. Such tax rates and any exemptions arising vary depending on the relationship between the heir and the testator and the amount inherited. When dealing with estates that have German-American elements, it should be considered that Germany has a tax treaty with the USA (Germany-U.S. Estate and Gift Tax Treaty). Elements within that agreement may override domestic German inheritance law.

At Schlun & Elseven Rechtsanwälte, our inheritance law team will ensure that you receive full advice and comprehensive support in all matters relating to inheritance tax returns in Germany.

German inheritance law applies in cases where the deceased dies in Germany and was deemed a habitual resident there. This applies to those who have died after August 16th, 2015 whereby German courts apply the European Succession Regulation (Europäische Erbrechtsverordnung). There are exceptions to this rule, where the deceased person is deemed to have been more closely connected with another country, where they had chosen the application of the law of their nationality and/or if the decedent’s last habitual residence was elsewhere (e.g., the USA). Therefore, a US citizen may be subject to German inheritance law if they have made their life and reside in Germany.

It may be the case that you have inherited property or other assets based in Germany, and you are unsure of how to proceed next. Maybe you have questions regarding concepts such as the “community of heirs” (“die Erbengemeinschaft”), the inheritance certificate (“der Erbschein”) or what is involved with the compulsory share of the inheritance (“das Pflichtteil”). It could be the case that the estate has significant debts attached to it, and you need to know the process around refusing an inheritance in Germany. At Schlun & Elseven Rechtsanwälte, our inheritance law team is ready to support you as an heir in Germany.

For heirs based in the USA, our lawyers will outline the process of German probate law. Our team will provide clear guidance regarding the documents received and the requirements expected of you as an heir and assist you in obtaining the necessary files and evidence. German inheritance law can be significantly different to US laws in some areas, and our team has vast experience in supporting US-based clients in probate cases.

Under German inheritance law, the estate (the whole of the estate or part of it) transfers to the heir or heirs, as outlined under § 1922 (1) BGB (German Civil Code). A “community of heirs” is formed automatically by a succession involving several heirs, and it is outlined under § 2038. Under the community of heirs system, the estate automatically becomes their joint property under § 2032 para. 1 BGB and must be administered jointly by all heirs. Such an inheritance can arise in cases where the deceased did not leave a will (died intestate) or where they left the property to several people.

Being an heir in Germany can provide some challenges as they also assume the obligations of the deceased, such as their debts. In cases of overindebtedness, it may be in the benefit of the heir to refuse the inheritance. However, heirs should consult with legal representation before deciding on such matters, and they should contact them in haste, as there are time limits around the refusal of an inheritance.