Estate Planning in Germany
Estate Planning in GermanyUpdated on Monday 14th September 2015
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Estate planning regulations in Germany
Estate planning in Germany falls under the regulations of the Inheritance Law. With respect to foreign citizens living in Germany, succession falls under the laws of the deceased’s national country. However, a foreign citizen may choose the German laws by testamentary disposition as an estate planning instrument. When planning the estate, one must meet certain requirements under the relevant jurisdiction’s law in order for disposition of assets to be legal.
Estate planning also depends on the bilateral treaties Germany has signed with other countries.
Wills as estate planning instruments in Germany
According to the German Civil Code, estate planning may be done:
- - by making a will,
- - by making a legacy,
- - by concluding contracts of inheritance.
The German legislation allows for several types of wills. Among these are the public and the holographic will. A public will must be made before a notary in Germany. Holographic wills, on the other hand, are not required to be made before a notary, but must be handwritten. Another type of German will is the joint will through which spouses may jointly dispose of their assets.
A special type of will is the “Berlin will” or the “Berlin testament” which is also a joint will, but compared to the first type, each spouse makes the other spouse a sole heir and establishes a third person the heir of the living spouse.
However, before considering the type will one wants to make it is best to ask a law firm in Germany about the advantages and tax considerations it involves.
Contracts as estate planning tools in Germany
Another estate planning solution employed in Germany is the testamentary contract or the contract of inheritance. The testamentary contract may be concluded before a public notary and in the presence of both parties.
The German contract on renunciation of inheritance or compulsory shares is another estate planning instrument through which discrimination of heirs is avoided. Through the contract of renunciation of inheritance, one renounces the right to inheritance compared to the contract of renunciation of a compulsory share. In the contract of renunciation of a compulsory share, the testator may leave certain assets aside when calculating the shares of all heirs.
For complete information about the Inheritance Law and the most effective estate planning instruments please contact our German law firm.