Reasons for Refusing an Inheritance
In principle, no one is obliged to inherit against his or her will. This is important to know because heirs often inherit without their intervention or unknowingly. The testator’s inheritance is transferred in full to the heir by law through a will, inheritance contract or legal succession, initially under § 1922 German Civil Code (BGB). The heir receives not only the assets but also the debts and other liabilities of the deceased. In principle, they must also pay these out of their private assets. The heir is therefore initially liable not only with the inherited property.
Refusing an inheritance therefore makes sense if the estate is completely over-indebted. Other reasons for the inheritance to be waived may be an entrenched dispute within the community of heirs or the threat of seizure of the inheritance by the heirs’ own creditors. In order to determine whether the estate is over-indebted, you as heir should quickly obtain a detailed overview of the inheritance. All the components of the estate should be compared. These include valuables, real estate, bank balances, securities, but also loans, maintenance arrears, claims to a compulsory portion (Pflichtteil), funeral expenses and any additional costs for the opening of a will or administration of the estate.
After the successful refusing of the inheritance, it is transferred, together with the debts, to the next person in the succession. Therefore, you should make sure that you also waive the inheritance for your underage children.
Implementation of the Distribution of the Inheritance
Under § 1943 German Civil Code, the heir can no longer refuse the inheritance if they have accepted it or if the period prescribed for refusal has expired. On expiry of the period for rejecting the inheritance is automatically deemed to have been accepted. Thus, in order for an inheritance to be successfully rejected, it is necessary not only to take account of the form and the time limit but also to avoid misunderstandings and conflicts which might indicate acceptance of the inheritance. In principle, an acceptance of the inheritance can also already be present when a confirmative action is taken. This often unconsciously thwarts the effective refusing of an inheritance.
Form and Deadline
The inheritance plan must be implemented in due form and time. According to § 1944 BGB, the rejection of an inheritance can only take place within six weeks. This period begins at the time when the heir becomes aware of the inheritance. If the succession has been established by the testator’s last will and testament and if they have deposited this last will and testament with the court, the heirs receive a letter from the probate court. This letter provides the necessary information about the succession and sets the deadline in motion. In the case of legal succession, the time limit begins to run as soon as the deceased’s death is known. A longer period of six months instead of six weeks applies if the deceased had his last residence abroad or if the heir who rejected the inheritance was abroad when the period commenced. For the succeeding heir, the rejection period then begins anew
The form in which the inheritance is bequeathed is standardised in accordance with § 1945 BGB. According to this, rejecting the inheritance is put into effect by declaration to the competent probate court. The court with jurisdiction is the court where the testator was resident. The declaration must be made personally by the heir for the record of the probate court or in a publicly certified form by a notary public. In any case, a simple letter is not sufficient.
Avoiding Conflicts when Refusing an Inheritance
If the decision has been made to reject the inheritance, several aspects must be considered in order to avoid conflicts and to be able to successfully complete refusing an inheritance. The heir should take care to refrain from doing anything that might indicate that they have accepted or intend to accept the inheritance. This includes, first, disposing of objects of the estate and suggesting as their new owner. In particular, the heir cannot choose individual assets and refuse individual obligations. Refusing an inheritance always refers to the entire inheritance or the entire inheritance share. Thus, if the heir expresses in any way conclusively that they wish to become the legal successor of the testator, this can be seen as an acceptance of the inheritance. This has the effect that waiving the inheritance is excluded in principle.
The information required to research the estate at the testator’s bank offers particular potential for conflict. For information on the deceased’s bank account, banks generally require the death certificate and/or the certificate of inheritance to be presented. Such a certificate of inheritance must first be applied for, which is problematic for the deceased’s heir. When applying for the certificate of inheritance, the heir makes a conclusive declaration that they want to accept the inheritance. As a result, the rejection of the inheritance under § 1943 BGB is no longer possible. The Federal Court of Justice found a solution to this problem in its 2013 ruling and emphasised that financial institutions cannot insist on the presentation of a certificate of inheritance when requesting information. It is sufficient, heirs are said to prove their status as heirs to the bank with the death certificate or other means. As a precautionary measure, the testator can also provide the heir with a power of attorney for the account or a precautionary power of attorney which is to extend beyond death.
Rejection after Acceptance of the Inheritance
If the heir has accepted the inheritance and subsequently receives new information about the inherited debts of the deceased, there is often a need for refusing the inheritance afterwards. The same applies when the time limit for disclaiming the inheritance expires. In principle, the rejection of an inheritance is no longer possible after acceptance (cf. § 1943 BGB). However, under certain circumstances it is possible to contest the acceptance of the inheritance within six weeks and thus to waive the inheritance. A ground for challenge exists, for example, if the heir assumed that the estate was debt-free or not over-indebted and therefore did not know of the financial situation of the testator. When a reason for avoidance exists and when not, always depends on the circumstance of the individual case. It is therefore advisable to consult a qualified lawyer for inheritance law with these questions regarding a challenge to the acceptance of the inheritance.
Reversing the Rejection
Conversely, if some not inconsiderable assets in the estate are subsequently uncovered, there is also the possibility of a challenge. The heir can reverse the disallowance in accordance with § 1954 BGB by contesting it within six weeks of becoming aware of the reason for the disallowance. The contestation of the disallowance is then deemed to be acceptance of the inheritance in accordance with § 1957 BGB. A ground for avoidance does not already exist if the heir has merely incorrectly valued the estate’s assets. He must have completely new facts concerning the estate. The contestation of the bequest of the estate is therefore also based on the special circumstances of the respective individual case.
Reversing the Rejection of an Inheritance
It is not only the bequest of an inheritance that offers protection against the personal liability of the heir to the creditors of the deceased. There are other possibilities to limit the financial disadvantages of an inheritance. If the estate is also unclear and therefore unclear as to what assets and debts are available, alternatives to the rejection of the inheritance may be more advantageous. This also applies if it can be assumed that you, as the heir, will be left with some assets after deducting the (albeit high) debts. Possible alternatives are:
- Administration of the Estate: Especially in cases where it is not foreseeable in the short term how many assets and how many debts are included in the estate and what is within the estate as a whole is unclear, it is advisable to apply for administration of the estate at the probate court. The application must be submitted by the heir personally for the record of the probate court’s office or in writing by post. The court then appoints an administrator to pay the testator’s debts from the estate. The costs of the administration of the estate are also financed from the estate. As a result, the heir can thus escape their personal liability. Their liability for the inherited debts of the deceased is limited to the estate. The remaining assets are paid out to the heir.
- Estate insolvency proceedings: If the heir has accepted the inheritance and the estate turns out to be indebted, the heir may, instead of contesting the acceptance of the inheritance, apply for composition insolvency proceedings. The application must be made to the competent insolvency court, the local court in whose district the deceased was resident. Here too, the heir’s liability for the testator’s debts is limited to the existing estate.
Legal Representation in Inheritance Law
In the case of inheritance, many stress factors come together at once. For financial, legal and organisational support in the settlement of the estate’s liabilities, an experienced lawyer in inheritance law is indispensable as a contact person. They can work out the best solution for your individual situation.
Our Schlun & Elseven lawyers for inheritance law are experienced in dealing with the formalities before the probate courts, in necessary negotiations with creditors of the testator and generally in the successful rejection of an inheritance. We have the necessary expertise, alongside many years of experience, to ensure compliance with forms and deadlines and to prevent conflicts with the inheritance. We can provide you with advice on the spot at our offices in Aachen, Cologne and Düsseldorf, as well as nationwide with the help of our conference rooms in Berlin, Hamburg, Munich, Stuttgart and Frankfurt. Clear communication with our clients is particularly important to us, which is why we offer our services both in English and other languages.