Wills in Germany
A person is not required to draw up a will in Germany. They can decide to do so, but are under no legal obligation to do so. Not creating a will allows for statutory decisions to be made, which may be satisfactory. Such statutory decisions will divide the assets of the testator amongst those closest linked to them by blood. This may be children, parents and spouse / partner but it remains within the family. However, writing a will provides the individual with more control over how the assets will be divided. Writing a will allows for the testator to leave possessions to other people and it allows them to decide on who receives which assets.
The Pflichtteil only plays a role when there is a will involved. Thus, the Pflichtteil’s function is to ensure that when the testator designed their will they did not refuse to support their direct family members / statutory heirs. Without a will the statutory heirs are the designated heirs to the person’s estate, a will allows for the testator to choose their own heirs to a greater extent but does not allow for the statutory heirs to be ignored.
The Pflichtteil – the Legal Basis
German law makes it very difficult for testators to completely disinherit certain members of their family. There are some exceptions which allow for the complete disinheritance, but as we will see it is for more extreme cases. Testators under German law should provide for their children and other direct relations in their wills and not doing so sufficiently will allow for the Pflichtteil to play a role. The Pflichtteil is legislated for under § 2303 BGB and ensures that they are not left out of the will.
It should be pointed out that the amounts mentioned as part of the Pflichtteil are minimum amounts and that when people are designing their wills they can go beyond this minimum. They should not view this amount as what they should provide for. If they wish to provide, then they can do that. However, they cannot go below this minimum.
Who is Entitled to the Pflichtteil?
The Pflichtteil relates to family members but not all of them are entitled to it. In fact, it is very close and direct family members who are. The more distant a relation is the less entitled to the Pflichtteil they become. Therefore, family members such as cousins, uncles and more distant relatives are not entitled to the Pflichtteil. The family members who are entitled to it are the following:
- Children (both inside and outside of marriage),
- Adopted children (but not stepchildren and foster children),
- Spouses / registered partners,
Therefore, not even siblings are entitled to the Pflichtteil. Obviously, they can be included in a testator’s will but if the testator leaves their assets etc. to another person (even one not related to them) the sibling does not have a direct entitlement to the Pflichtteil.
The Pflichtteil works on the basis that the person inheriting would have become heir under statutory succession (if the testator had not left a will). Therefore, although grandchildren (and great-grandchildren) would be viewed as entitled to the Pflichtteil, their parents (the testator’s children) would come before them in the entitlement in normal circumstances. Therefore, if the child of the testator claims their Pflichtteil, their children (the testator’s grandchildren) cannot also claim to be entitled to a Pflichtteil.
The children of the testator also come before the testator’s parents. Should the testator not have children or a spouse then the parents of the testator have a strong role to play when it comes to entitlements.
How Much does the Pflichtteil Amount to?
In real terms, the Pflichtteil amount will of course be completely dependent on the fact of the case and the amounts within the will as well as the amount of heirs. The rule is that the Pflichtteil is half of what the heir would have been entitled to under statutory requirements. Therefore, if the Pflichtteil requirement refers to a child who would have been entitled to 1/4 of the estate under statutory requirements, the Pflichtteil entitles them to 1/8 of the estate.
If the testator tries to leave a statutory heir with below the Pflichtteil amount then they will be able to claim for the balance from the other heirs. In this case, if the statutory heir is entitled to €20,000 but only received €5,000 in the will, they will be able to seek the extra €15,000 which they should be entitled to.
The value of the estate will be based on comparing the assets to the liabilities of the estate. Once the liabilities are deducted from the assets, the remaining surplus is the amount from which the Pflichtteil will be determined from. The liabilities included here are those such as debts accrued by contractual obligations, taxes owed and loans that need to be repaid.
The Nature of the Pflichtteil
The Pflichtteil is a monetary sum; it does not consist of the testator’s individual assets. Therefore, when making the claim for the Pflichtteil the statutory heir cannot make demands regarding individual assets of the testator which they may have left to other individuals. The statutory heir entitled to the Pflichtteil can thus only demand that they are compensated for the monetary amount relating to the amount that they would be entitled to.
Supplementation of the Pflichtteil – Gifts
In cases where the testator tries to “get around” the Pflichtteil, by giving gifts to 3rd parties in order to reduce the inheritance, there is recourse for statutory heirs. In this instance, it involves the testator giving assets to others so that the overall size of the estate has reduced in size. In such cases, the statutory heir can supplement their Pflichtteil in accordance with § 2325 BGB. This can be achieved by adding the value of the gifts to the overall estate. Thus, if the value of a gift was €20,000 this amount would be added to the valuation of the estate. However, there are limitations to this claim.
Firstly, the gifts in question refer to gifts made in the ten years prior to the testator’s passing. Gifts made before this time are not generally included in this calculation. Secondly, the valuation of the gift reduces over time from when it was given. The valuation declines by 10% per year until after 10 years it can no longer be claimed as a supplement to the Pflichtteil. So if the gift was made during the year of the testator’s death then the statutory heir can add 100% of the value of the gift to the rest of the estate. Once this amount has been added to the valuation of the estate, the Pflichtteil increases in value.
Can a Person Lose the Entitlement to the Pflichtteil?
Losing the entitlement to the Pflichtteil is difficult but it is possible. There are some legal exceptions to this which do allow for the complete disinheritance of such an individual. The law here is based on § 2333 BGB and consists of cases where the individual has committed criminal actions such as:
- They have “made an attempt on the life of the testator,”
- They have “made an attempt on the life of the spouse of the testator, or of another descendant or of a person similarly close to the testator,”
- The person has been sentenced to at least one year’s imprisonment without probation because of an intentional criminal offence and participation of the descendant in the estate is hence unreasonable for the testator.
- The person was ordered to be placed in a psychiatric hospital or in a detention centre for a similarly serious intentional crime.
Therefore, issues such as distancing arising between parent and child over time, is not a reason for complete disinheritance. Less extreme family difficulties will not be sufficient to fulfil the criteria specified to completely disinherit a close family member. Please see our page on “Estate Planning in Germany” to see how the Pflichtteil corresponds to estate planning by contract and other forms of estate planning.
Can a Person Waive their Entitlement to the Pflichtteil?
Although losing the entitlement to the Pflichtteil is reserved for more serious difficulties involving criminal law aspects, waiving the entitlement to the Pflichtteil is more straightforward. It is allowed for and it does not require the prerequisite of prior criminal law actions. Waiving the entitlement to the Pflichtteil can be achieved through the contract on renunciation of inheritance; however it must be advised that one should avail of legal counsel before committing to this action. Alternatively, the contract of renunciation of compulsory share allows for certain assets to be left out of the Pflichtteil.
Such actions allow for changes or renunciations to be made. There may be private reasons as to why this may be of consideration for those involved, however it must be reiterated that they should consider legal counsel before making this step. Contact our lawyers today if you are in this position to fully analyse what is involved with such an action.
Does the Pflichtteil Entitlement Expire?
Yes, the Pflichtteil can in fact expire. The statutory heir needs to bring their case forward within three years of the testator’s passing in order to save their entitlement. This expiration date only begins after the statutory heir learns that they have been disinherited or that they have not received what they should have according to Pflichtteil requirements. However, the three years can also come into play when the party did not realise their entitlement through gross negligence on their part. The “countdown” begins from the end of the year (31/12/xxxx) of the statutory heir becoming aware of their entitlement.
Legal Representation in Inheritance Law Issues
When it comes to legal rights relating to the Pflichtteil and inheritance law generally; look no further than Schlun & Elseven Attorneys. Our legal professionals will provide you with the peace of mind you need when it comes to planning for the future. We can assist with the drafting of wills (thus ensuring that the legal requirements are fulfilled), estate planning and generally ensuring that the aims of our clients are fulfilled. We also represent heirs and answer their queries as well as guide them through any disputes which may arise. We provide counsel and support both inside and outside of the courtroom.
Schlun & Elseven Attorneys is a German legal firm with its main offices in Cologne, Düsseldorf and Aachen. We also have conference rooms in Berlin, Munich, Stuttgart, Hamburg and Frankfurt and thus are available nationwide in Germany. Furthermore, we advise a diverse range of international clients on a wide variety of German inheritance law. If you require further advice and more specialised assistance when it comes to the Pflichtteil then please make sure to contact us directly using the contact information below. Our inheritance law specialists look forward to working with you.