Reasons for disclaiming an Inheritance in Germany
There are many reasons why a beneficiary may wish to disclaim an interest in a German estate, in particular
- an heir (Erbe) may want to avoid personal liability for estate debts,
- a beneficiary (heir or legatee) under a Will or an intestate heir (gesetzlicher Erbe) may want his interest in the estate to pass directly to his descendants in order to save German inheritance tax (Erbschaftsteuer),
- the testator has ordered durable execution of the estate (Dauertestamentsvollstreckung) with regard to the share of a forced heir (Pflichtteilsberechtigter) and that forced heir wishes to claim the forced share (Pflichtteil) instead of beeing an heir without the right to administer the estate or
- the beneficiary is be indebted / receives social welfware payments and, thus, would not benefit from the inheritance.
Requirements for a Valid Disclaimer by an Heir
Under German law, the estate passes automatically to the heir (Erbe) subject to the right to disclaim the inheritance. See § 1942 of the German Civil Code (BGB). The requirements of a valid disclaimer are set out in §§ 1943 BGB to 1957 BGB.
When a Disclaimer is barred
The heir cannot disclaim the inheritance if
- he has accepted the inheritance or
- the period for disclaiming the inheritance has expired. See § 1943 BGB.
Acceptance of inheritance (Erbschaftsannahme) does not necessarily have to be expressed, but can also be determined from any action or declaration implying that the heir intends to keep the inheritance, e.g. application for a certificate of inheritance (Erbschein).
The deadline for a valid disclaimer of inheritance (Ausschlagung) is generally 6 weeks. See § 1944(1) BGB.
The period extends to 6 months, if the decedent did not have a residence in Germany or if the heir was not in staying in Germany (irrespective of his/her actual residence) at the time of death. See § 1944(3) BGB.
The period for disclaiming the inheritance begins on the date on which the heir obtains knowledge of the devolution of the estate and of the reason for his entitlement. See § 1944(2) BGB. In some situations, the deadline for the renunciation of the inheritance (Erbausschlagung) is further prolonged. See § 206 and 210 BGB.
If the heir is called to inherit under the terms of a Will, the period does not begin before the opening of the Will (Testamentseröffnung). See § 1944(2) BGB.
Validity as regards to Form and Filing of the Disclaimer
A valid disclaimer must be made through a declaration to the German probate court (Nachlassgericht). However, the heir does not have to travel to the competent probate court, but can notarize the disclaimer declaration in front of a German notary (Notar) or a German Consul. See § 1945 BGB. The German Consul generally does not file the document with the Court, but simply provides the original (and a first certified copy) to the applicant, who must send it to the Court.
Partial and Conditional Disclaimer
With exceptions, the disclaimer must be in whole and unconditionally. See § 1950 BGB. However, it is possible to agree that a lump sum payment will be granted in return for a person disclaiming the inheritance. This is often done in order to achieve a reduction of the German inheritance tax. For further information, please read the article Disclaiming an inheritance in order to avoid German inheritance tax.
Requirements for a Valid Disclaimer by a Legatee
A legatee (Vermächtnisnehmer) is a beneficary under a Will, who is not an heir (Erbe). See § 1939 BGB.
The acceptance and the disclaimer of the legacy (Vermächtnis) are made by declaration to the person charged. The declaration may be made only after the devolution of the inheritance; it is ineffective if it is made subject to a condition or a stipulation as to time. See § 2180 (2) BGB.
In contrast to an heir, he does not have to disclaim within a certain time period. However, he cannot disclaim the legacy anymore, after he has accepted the legacy.
Effect of a Disclaimer
If an inheritance (or legacy) is effectively disclaimed, the heir (or the legatee) is considered predeceased for purposes of determination of the heir. See § 1953 BGB. As a consequence, children of the heir who disclaims the inheritance automatically become heir unless they also disclaim the inheritance. If the children are minor, the parents cannot disclaim the inheritance on their children's behalf without the consent of the court. However, if the child only becomes heir because one of the parents has disclaimed the inheritance and the parents are not co-heirs, he may disclaim the inheritance without approval of the guardianship court.
Disclaimer for a Minor
The parents need court approval for a disclaimer in the name of their child. However, if the child is only called to inherit as the result of the disclaimer of inheritance by a parent, the approval is only required if the parent was entitled together with the child. See § 1643 BGB.
Disclaimer in Cross-Border Estate Matters
Material effectiveness of the disclaimer
According to Art. 23 (2) (e) of the European Succession Regulation (Europäische Erbrechtsverordnung) - hereinafter "EuErbVO", the conditions and the legal effects of a disclaimer are subject to the general law of succession according to Art. 21 or 22 EuErbVO. The applicable law under the European Succession Regulation is that of the country of the deceased's habitual residence (gewöhnlicher Aufenthalt) at the time of death unless there is a valid choice of law clause (Rechtswahlklausel).
In the case that only part of the estate is governed by German law (scission), each "partial estate" can be disclaimed separately. However, as a rule, it is not possible to obtain the assets in one state without being liable for the debts in another state, since the prevailing opinion is that an overall view is required with regard to the liability for debts.
Form of the disclaimer
Since the EuErbVO came into force, a declaration on the disclaimer of the inheritance is effective with regard to its form if it complies with the form requirements
- the law applicable to the succession under Articles 21 or 22 of the Regulation, or
- the law of the country in which the disclaiment has his habitual residence.
Consequently, a disclaimer can be signed abroad either in the German Consulate or in front of a person authorized to do so under the laws of the country where the disclaiment resides, e.g. a notary public in most States of the U.S.
Important: The receipt of the declaration is not a question of form (BGH, judgment July 20, 2016, XII ZB 489/15). Consequently, if German inheritance law is applicable, the declaration - even if this is not required under the law of the disclaiming party's habitual residence - must be received by the German probate court within the disclaimer period.
Jurisdiction
The international jurisdiction is determined in principle according to the general rules of jurisdiction of the EuErbVO.
However, according to Article 13 EuErbVO, the acceptance or disclaimer of the inheritance (or of a legacy or a compulsory portion) may also be made before a court of the Member State in which the person disclaiming the inheritance has his or her habitual residence, if these declarations can be made before a court in accordance with the law of that Member State.
If the Federal Republic of Germany has international jurisdiction, the probate court in whose district the person making the declaration has his or her habitual residence has local jurisdiction (Section 31 sentence 1 IntErbRV).
