The compulsory (minimum) share of a person’s inheritance (in German: “Pflichtteil”) is an amount that a testator is obliged to (according to law) leave to certain people. Generally, testators have the freedom to create their wills, but when it comes to certain close family members, there is an obligation to provide for them. In some very limited situations, the testator can be exempt from the Pflichtteil. Heirs can also refuse to accept the inheritance. However, with all of these issues, the advice of experts in German inheritance law should be strongly considered.
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Legal Advice on the Pflichtteil
The Pflichtteil is a legal right under German inheritance law that mentions specific heirs who are entitled to receive a portion of an inheritance in Germany. This requirement applies even in cases where they are not specifically named in the will. The Pflichtteil applies even in cases where the person dies intestate and is provided under § 2303 BGB.
The Pflichtteil is calculated as a percentage of the net estate, which is the estate after deducting any debts and expenses. The percentage is usually one-half of the share that the heir would have received if the deceased person had died intestate.
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 relation is, the less entitled to the Pflichtteil they become. Therefore, family members such as cousins, uncles, and 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,
- Grandchildren,
- Parents
Therefore, not even siblings are entitled to the Pflichtteil.
The Pflichtteil works on the basis that the person inheriting would have become heir under statutory succession. 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. If the child of the testator claims their Pflichtteil, their children (the testator’s grandchildren) cannot also claim to be entitled to a Pflichtteil.
German law makes it very difficult for testators to disinherit certain members of their families completely. Some exceptions allow for complete disinheritance, but it is for more extreme cases.
The legal right to the Pflichtteil can be waived by the heir in writing and it can also be restricted in the will. Furthermore, if a person disinherits an heir who is entitled to a Pflichtteil, they may still be able to claim it, but they will have to prove that the disinheritance is unreasonable.
TIn summary, Pflichtteil is a right of certain heirs to receive a portion of the inheritance, it is intended to provide a minimum inheritance for certain heirs and it is calculated as a percentage of the net estate.
The Value of the Pflichtteil
In real terms, the Pflichtteil amount will entirely depend on the amounts within the will and the number 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 condition refers to a child who would have been entitled to 1/4 of the estate under statutory provisions, the Pflichtteil allows them to 1/8 of the estate.
If the testator tries to leave a statutory heir below the Pflichtteil amount, they will claim 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 allowed.
The estate’s value will be based on comparing the assets to the estate’s liabilities. Once the liabilities are deducted from the assets, the remaining surplus is the amount from which the Pflichtteil will be determined. The liabilities included here are 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 claiming the Pflichtteil, the statutory heir cannot make demands regarding the 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 they would be allowed.
Supplementation of the Pflichtteil – Gifts
In cases where the testator tries to “get around” the” Pflichtteil by giving gifts to 3rd parties to reduce the inheritance, there is recourse for statutory heirs. In this instance, it involves the testator giving assets to others so that the estate’s overall size has reduced. In such cases, the statutory heir can supplement their Pflichtteil per § 2325 BGB by adding the value of the gifts to the overall estate.
Thus, if the value of a gift were €20,000, this amount would be added to the estate valuation. However, there are limitations to this claim.
Firstly, the gifts in question refer to contributions made in the ten years before 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 passing, then the statutory heir can add 100% of the value of the gift to the rest of the estate. When this gift has been added to the estate valuation, the Pflichtteil increases in value.
Waiver and Loss of the Pflichtteil
Losing the entitlement to the Pflichtteil is difficult, but it is possible. Some legal exceptions 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 “attempted the life of the testator,”
- They have “made an attempt on the life of the spouse of the testator or another descendant or 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. 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 a detention centre for a similarly serious intentional crime.
Therefore, issues such as distancing between parent and child over time are not a reason for complete disinheritance. Less extreme family difficulties will not be sufficient to completely fulfil the criteria specified to disinherit a close family member.
Can a Person Waive their Entitlement to the Pflichtteil?
Although losing the entitlement to the Pflichtteil is reserved for more severe 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. 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 personal reasons why this may be of consideration for those involved. However, they should consider legal counsel before completing this step. Please, do not hesitate to contact our legal team for further legal advice.
It’s also worth mentioning that waiver of Pflichtteil rights can only be made before the testator’s death.
Practice Group: German Inheritance Law
Practice Group:
German Inheritance Law
