Recognition of International Wills in Germany

If an inheritance case involves a foreign country, the question arises as to which law is applicable – the foreign or German inheritance law? The legal system applicable in the affected or involved state has been decisive until now. While the deceased’s domicile was decisive for assessing an inheritance case for some states, other states made the applicable law dependent on the decedent’s nationality. Accordingly, a fundamental distinction was made between the nationality and residence principles.

When assessing the succession based on the nationality principle, the decedent’s nationality was decisive, as the term already suggests. The residence of the testator was not relevant here. Therefore, the law of the state of which the deceased had the nationality at the time of his death was applied.

On the other hand, other states applied the so-called residence principle to assess an inheritance case. According to this principle, the law of the decedent’s last place of residence was decisive.

Therefore, the states each had their regulations to be applied in the case of an inheritance involving a foreign country. This led to a so-called division of the estate necessary in some cases. This was done if the deceased’s estate was distributed in different countries and different inheritance laws applied to these parts of the estate. This was, for example, often the case with real estate.

Therefore, the regulation of the division of estates meant that different legal systems could be applied and thus, among other things, different communities of heirs could arise. Accordingly, there was no uniform legal situation for EU citizens. This led to considerable uncertainties regarding the applicable law.

To counteract this uncertainty, Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 (European Inheritance Regulation) entered into force on 17. August 2015. This applies with priority in all European Union member states (except Denmark and Ireland), and succession cases since the regulation came into force.

The European Inheritance Regulation unifies the applicable law in the case of an inheritance involving a foreign country. Now only one national law will apply to the entire estate. In the following, we explain which regulations must be observed in the case of an international inheritance since August 2015 and how to deal with a foreign will.

The provisions of the EU Inheritance Regulation now stipulate that the deceased’s habitual residence is decisive in the question of the applicable law of succession (cf. Art. 21 (1) EU Inheritance Regulation). The country’s law in which the deceased last had their habitual residence applies to the entire estate in the event of their death. This also means assets that are located in that country. Thus, if a person dies in Germany who also had their heirs’ real estate in other European countries, German inheritance law applies to all real estate and other estate assets.

But when can one assume habitual residence? It should be noted that the term “habitual residence” within the meaning of the European Inheritance Regulation is not clearly defined. However, recitals 23 and 24 of the EU Inheritance Regulation identify several points that should be considered when answering the question posed at the beginning of this paragraph (see ECJ, 16.07.2020 – C-80/19).  Thus, EC 23 p. 2 EU Inheritance Regulation states:

To determine the habitual residence, the authority dealing with the succession should assess the circumstances of the deceased’s life during the years preceding his death and at the time of his death, taking account of all relevant factual elements […].

The following aspects are of particular interest here (cf. EC 23 EU Inheritance Regulation):

• Duration and regularity of residence,
• circumstances and reasons of residence,
• recognition of a strong link with the state in question.

If the deceased moved to another country, e.g., for professional reasons, but maintained ties to their country of origin, the following points, among others, must be considered for the assessment of habitual residence according to EC 24 EU Inheritance Regulation:

• Where did the deceased have his centre of life in family and social terms?
• Nationality of the deceased?
• Where are the assets of the deceased located?

As soon as the habitual residence is determined, which national law of succession applies is clear. It should be noted that the inheritance laws of the various EU countries may differ significantly from each other. This is particularly the case with the following aspects:

• Which persons inherit? Who is entitled to a compulsory share, and how high is the compulsory share? For example, German Inheritance law provides for an inheritance share of 50% for the deceased’s spouse, the claim under French law is lower in comparable inheritance cases (1/4 of the estate). In addition to the differences in the basic entitlement about the compulsory portion to which the heirs are entitled, there are also differences in structuring the right to a compulsory portion.
• Waiver of the compulsory portion – While some countries only allow this to a limited extent, it is not possible in other countries.
• Recognition of joint wills and inheritance contracts – Some countries do not recognise spousal wills (§ 2269 BGB), effective in Germany.

It should be noted that despite the uniform regulations of the European Inheritance Regulation, a division of the estate may still occur. This is because under Art. 75 (1) EU Inheritance Regulation, the application of international agreements is not affected if they already existed when the regulation entered into force. The lawyers at Schlun & Elseven Rechtsanwälte check whether such an agreement exists in your inheritance case and answer any other questions regarding international inheritance law.  Please also look at our article “International Inheritance Cases: German Lawyers – Bank Information and Power of Disposition”.

If the deceased did not have their last habitual residence in one of the European Union member states but in a third country or one of the two countries where the European Inheritance Regulation does not apply, the third country’s law is generally applicable. In this case, the private international law of this very state determines which law of succession applies. In such cases, the principles of nationality and residence often apply. Some states apply one of these principles in the case of international succession.

It is not uncommon for the question to arise as to how to proceed with a will that was not written in the country in which the testator had their last habitual residence.

A will is formally valid unless it is contrary to the law of the states in which

• the deposition of property upon death was made,
• the testator had their last habitual residence,
• the testator was born (country or region) or (if any) the immovable property inherited is located.

In Germany, foreign wills are usually recognised as valid.

The validity of a disposition of property upon death is assessed according to the law in force in the state where the testator had their habitual residence at writing their will.

The European Inheritance Regulation also allows a person to choose a law of succession (so-called choice of law, cf. Article 22 EU Inheritance Regulation). This applies particularly if someone has their habitual residence abroad but prefers applying the law of succession of the country they are a national. Using a choice of law, the “danger” that the country’s inheritance law in which the deceased will have their last habitual residence will apply can be counteracted.

A testamentary disposition is required in which the choice of law is expressly declared and thus recorded. It is only possible to specify the valid law of the home state of which the testator is also a citizen. If a person has several nationalities, they may choose the law of one of these states (cf. Art. 22 para. 1 sentence 2 EU Inheritance Regulation).

If using a choice of law, the declaration was made that the home state’s law is to be applied to be succession, the principle of unity of estate applies. Accordingly, a choice of law that only applies to parts of the estate is impossible.

Furthermore, the entry into force of the European Inheritance Regulation introduced the European Certificate of Succession (cf. Art. 62 EU Inheritance Regulation). An heir may apply for this certificate in addition to the national certification. However, in comparison to the latter, the European Certificate of Succession is recognised throughout Europe (cf. Art. 69 (1) EU Inheritance Regulation). This eliminates the need to apply for several certificates of inheritance in different countries, which was necessary until the EU Inheritance Regulation came into force.

Under Art. 63 (2) EU Inheritance Regulation, this in particular acts as proof of the following aspects:

• Legal stats and rights of heirs,
• Share in the estate,
• Allocation of a specific asset,
• Power to execute the will,
• Power to administer the estate.