German Law/German inheritance Laws
QUESTION: My brother, a US Citizen, recently died in Germany where he domiciled for 25 years. He was married w/ no children. He left no Will and his financial affairs are in chaos. He owns 2 properties in Germany. We have been told that my parents are entitled to 1/2 of his estate ( his wife the other 1/2 ) but that they must first "accept" the heritage which includes any outstanding debts. True / false?
We have also been told that no investigation / accounting of his affairs may begin until my parents have "accepted" the inheritance. Is this true??
If the inheritance is accepted, and it is found that his debts are greater than his assets, does the debt liability carry over to US Citizens?
Thank you so much for the help!
ANSWER: The citizenship or residence of the heirs have no legal impact on the succession in regard to assets and liabilities. No acceptance of the inheritance is required under German law. According to the principle of universal succession the heirs step into the shoes of the deceased automatically upon death unless they file a waiver of the inheritance in court. This also applies to the administration of the estate. If an acceptance has been declared, however, no waiver can be declared thereafter any more. If the parents of the deceased (I assume that both are still alive) decide to file a waiver of the inheritance you and other siblings of your brother would be called to succession so that the siblings would also have to think about a waiver. The deadlines for a waiver of an estate whose former owner had lived in Germany depend on where the heir was at the time of death (inside the country - six weeks; outside the country - six months as of time receiving knowledge of the succession).
Unless the community established upon death between the heirs has been dissolved by acts of distribution among the heirs any liability is limited to the estate. So if an heirs wishes to keep the inheritance I would advise you to pay debts and taxes first and then distribute the rest. If the estate is overindebted or illiquid the heirs have to file a petition of bankruptcy proceedings regarding the estate at the court without undue delay.
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QUESTION: Thank you for your help. A followup if i may.....
One thing that has frustrated us is that the process of "discovery" to determine my brother's assets and liabilities is blocked until the inheritance is accepted. We understand that no formal probate process exists and therefore no trustee available to expedite / facilitate this discovery process.
How is it possible to arrive at an informed decision regarding the acceptance / rejection of the heritage or the appropriateness of filing a bankruptcy when the assets and liabilities are unknown and no banking institution will permit access to the information?
THanks again for the help.
The discovery is not dependent on any form of acceptance. However, it maybe that a certificate of inheritance (Erbschein) is needed so that banks and other third parties give you the necessary information. It serves as an ID of the heirs and it is issued by the court upon respective application. Bankruptcy proceedings have to be initiated as soon as the heirs become aware of an illiquidity/ overindebtedness of the estate. Asstes which were already distributed have to be paid back then. The omission to file a waiver can also be contested later on the grounds that the estate is illiquid/ overindebted, a fact which was discovered after the expiry of the period. Anyone who has lived with the deceased while he was alive and/ or who has taken possession of the estate is obliged to inform the heirs or co-heirs about the assets and liabilities as well as of the administration that has been carried out so far.