Introduction
Upon an individual’s death, his or her assets (the "estate") pass as in whole to one or more individuals, who are referred to as "heirs". See § 1922 German Civil Code (BGB). This is called the principle of universal succession (Gesamtrechtsnachfolge). If there is more than one heir (Erbe), there is a community of co-heirs (Erbengemeinschaft). See § 2032 (2) BGB.
Administration of the Estate by the Community of Co-Heirs
Unless an executor (Testamentsvollstrecker) is appointed to administer the estate, the co-heirs are jointly entitled to administer the estate. See § 2038(1) BGB.
Every co-heir (Miterbe) is obliged to provide his or her consent to measures that are necessary for the proper administration of the estate. See § 2038(1) BGB.
If a co–heir refuses to give his or her consent to such administrative measures, a court may substitute his or her consent by application of a co-heir.
Measures necessary for preservation of the estate may be undertaken by each co-heir alone. See § 2038(1)2 BGB.
Substantial changes to the estate and disposal of a major asset of the estate always require unanimity. See § 2040 BGB.
Any co-heir may claim payment of debts from a debtor; however, such payment must be made to the community of co-heirs and not the co-heir claiming payment. See § 2039 BGB.
Dispositions (e.g. transfers or pledges) of estate assets always require unanimous consent of all co–heirs. See § 2040 BGB.
Joint Certificate of Inheritance
Upon application of one or all heirs, a joint certificate of inheritance (gemeinschaftlicher Erbschein) will issued (§ 2357 BGB). It states the names of the co-heirs and their shares of the estate. There is a presumption that the persons identified as heirs in the joint certificate of Inheritance and, as a consequence, are entilted to jointly administer the Estate. Additionally, § 2366 BGB protects those who acquire an item belonging to the estate from the co-heirs named in the Certificate in good faith.
Disposition of Shares of an Estate
A co-heir may dispose of his or her share in the estate as a whole without the consent of the co-heirs. In this situation, the other co-heirs have a right of pre-emption pursuant to §§2034-2035 BGB. If the share sold has been transferred to the buyer, the co-heirs may exercise against the buyer the right of preemption against the seller. In this case the seller has to transfer the share to the co-heirs, who have exercised the preemption right.
Dissolution of Community of Co-heirs
Every co-heir has the right to demand dissolution of the community of co-heirs at any time unless this right is excluded by the testator in a testament disposition. See § 2042(1) BGB.
Prior to distribution to the co-heirs and closing of an estate, all liabilities must be paid and any co–heir can claim payment to the debtor. See § 2046 BGB.
Distributions are made on the basis of a distribution agreement (Erbauseinandersetzungsvertrag), which requires unanimous consent of all co-heirs. If the co–heirs don’t come to such an agreement, each co–heir may apply for mediation by the probate court or ask the court to substitute the denied consent of one heir to the Erbauseinandersetzungsvertrag. The court will then have to determine if the consent to the distribution agreement must be given or if there is good reason for not giving such consent due to the following:
- Estate debts have not yet been settled;
- The entire estate is not distributed;
- Undividable things are distributed;
- Advances given to the heirs have not be taken into account; or,
- A share of a co-heir was calculated incorrectly.
Liability of the Co-heirs for Estate Debts
Pursuant to § 2058 BGB, all co-heirs are liable for estate debts unless the disclaim the inheritance. Each co–heir is liable for the full amount. Until the estate is closed, each heir may limit his or her liability to their share of the estate. See § 2059 BGB.
Following the distribution of the estate, each heir is liable for estates debts that correspond to their distribution. See § 2060 BGB.
Glossary: Disclaimer of inheritance (Ausschlagung)
