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Questions which are frequently asked with reference to issues for which the laws of succession are applicable

When is it expedient or helpful to obtain counsel in matters and issues which are subject to the laws of succession?

It is not a matter of age or old age to face and think about the question of what is to happen with one’s own assets and property some time in the distant future. After all this was already an issue as early as in the 18th century, which was then broached by Benjamin Franklin who found that „there is nothing more certain in this world than death and taxes“.

 

Any one who wishes to avoid disputes amongst heirs, fiscal losses or costly cases of litigation amongst his or her heirs, ought to make appropriate provisions in good time in advance. To this end expedient measures such as gifts inter vivos, legally valid provisions made in last wills and testaments and dispositions concerning company-related issues or business succession planning are proven means to ensure comfortable lifetime peace of mind.   

 

 

Legal counsel is frequently also necessary on the part of heirs. When a person passes away this may bring up quite a number of questions or problems and it happens not infrequently that urgent and liability-entailing

decisions must be taken, which then often give rise to extreme strain for the survivors especially while they are still in mourning

How does one make a hand-written and personally signed testament?

As a matter of principle there are two conditions which must be met:

The last will and testament must be entirely hand-written by your own self and must be personally signed by your own self.

 

The testament should specify the place and date and it should clearly state that this is indeed „your last Will and Testament“ („Ihr letzter Wille“) and not simply a draft. The date is in so far important as it allows to later determine which testament is to be valid as the last one if there are several wills existing. 

 

Even though this seems to be quite simple it involves a number of risks and it is not in rare cases that this will bring up problems of understanding and interpretation on the part of the courts of justice. Thus laymen often do not realize what is the exact meaning of the legal terms which are being used. If it is, for instance the word „vermachen“ (bequeath or devise) which is used, it is not unambiguously clear whether the person for whom such provisions were made in the will, is to be an heir or a legatee/devisee.

 

If you wish to differentiate your testamentary provisions (several heirs, legatees, devisees, testamentary burdens, execution of the will, etc.) it makes sense and is advisable to consult knowledgeable counsel. This is the only way by which you can make sure to avoid that your testament will at a later date be interpreted and construed in a sense which is different from what you actually wanted it to say.

 

What is a joint will?

 

What is the difference between an heir, a legatee, a devisee, a beneficiary who is burdened by a certain obligation, and a forced heir?

 

Should I make an advance care directive („Betreuungsverfügung“) or a lasting (general) power of attorney („Vorsorgevollmacht“)?

 

 

 

 

What is a joint will?

As a matter of principle a joint will is not a special will, but in the first place it is  nothing but a mere facilitation as to its form. It can only be made beween spouses, it being sufficient as far as its form is concerned if one of the two spouses writes the text of the testament. It is, however, a requirement that both spouses sign the same in their own hands. Such a testament is then deemed to have been validly made by both spouses.

 

The best known form of such a testament is the so-called „Berliner Testament“ („Berlin testament“) whereby both spouses mutually designate each other as sole heirs, and where the children will be the ultimate beneficiaries following the surviving spouse. 

 

In this context it is, however, advisable for the spouses to jointly also consider the question in how far the surviving spouse is to be able and entitled to change the provision concerning the ultimate beneficiary by designating another person as final heir („Schlusserbe“). If the respective provisions are interdependent such a change is not possible. It is, however, possible to validly agree on a clause which allows for such a change.

 

The advantages of the joint will in the form of the „Berliner Testament“ are, however, counterbalanced by serious disadvantages :

 

Due to the fact that it is two times that the estate is left to heirs there is a risk that the estate will be subject to double taxation and no advantage can be taken of the children’s tax allowances which are granted after the death of the first spouse. 

 

What is the difference between an heir, a legatee or a devisee, a person who is given a bequest which is encumbered with a charge, and a person who is entitled to a compulsory portion of an estate?

 

 

Should I make an advance care directive („Betreuungsverfügung“) or a lasting (general) power of attorney („Vorsorgevollmacht“)?

 

 

What is the difference between an heir, a legatee or a devisee, a person who is entitled to a compulsory portion in an estate (forced heir), and a bequest which is encumbered with a charge?

a)  Heir

 

The heir or the community of heirs will automatically become the legal successor(s) of the decedent. He/she or they will consequently succeed to all of the decedent’s rights and obligations, such as if the latter was still alive.

 

The heir therefore acquires the ownership title in and to the assets and real estate property of the decedent’s estate, he will become the owner of claims, but on the other hand he also has to assume and pay the decedent’s debts. He is entitled to demand information from banking institutions, authorities and fiscal counselors.

 

b)   Legatee

 

Other than the heir a legatee or devisee will not become the owner of the estate or of any part thereof. All he has is a right which he can claim from the heir(s) and under which he can demand the fulfilment of the legacy, for instance the surrendering of a cupboard or wardrobe, the payment of an amount of money or the transfer of the ownership title in and to real estate property.

 

An heir can also additionally become a legatee. This is called a legacy in advance („Vorausvermächtnis“). Such a legacy must be fulfilled prior to the distribution of the decedent’s estate and it thus constitutes a benefit for the heir, because he receives his legacy first (in „advance“).

 

c)   Person who is given a bequest which is encumbered with a charge,

 

By encumbering heirs with a charge these heirs may be obliged to perform and do certain things. Classical examples for these are the obligation to look after and tend a grave or to take care of a dog.

 

In consideration of the fact that this does not give rise to any direct legal claim or title it is recommended that this charge should be monitored, which can be done by an executor.

 

d)   Person who is entitled to a compulsory portion in an estate?

 

The right to a compulsory portion of an estate is something like a „substitute“  which is to be received by persons who are defined by law, if they were disinherited either by way of a last will and testament or by a contract of succession.

 

The only persons who are entitled to receive such a compulsory portion are the decedent’s descendants and spouse, and if certain prerequisites are met, also the decedent’s parents.

 

The rate of this compulsory portion is half of the rate which would have to be applicable in the case of a statutory hereditary succession (intestate succession) and it depends on the current market value which the estate had on the date of the decedent’s death. In certain circumstances donations will also be included. This is then the so-called right to a supplement to the compulsory portion („Pflichtteilsergänzungsanspruch“).

 

 

Should I make an advance care directive („Betreuungsverfügung“) or a lasting (general) power of attorney („Vorsorgevollmacht“)?

 

 

 

 

Should I make dispositions for an advance care directive („Betreuungsverfügung“), a living will or a lasting (general) power of attorney („Vorsorgevollmacht“)?

a)   Custodial Care („Betreuung“)

 

If a person no longer has legal capacity or is otherwise unable to handle his or her affairs him- or herself, this person will – similar to a child – be assigned a legal representative. This custodian („Betreuer“) *) is appointed and monitored by the „Amtsgericht“ (County Court). This applies also in those cases where the custodian is a close relative.

 

If a person feels that Court-monitoring and verification of the actions of one’s personally chosen representative are important and considers this to be expedient  the German Civil Code gives this person the right to determine the person who should be his or her custodian. In this case such an advance care directive („Betreuungsverfügung“) ought to be made in writing, unless it is made before a notary public.

 

 

b)  „Vorsorgevollmacht“ (Lasting (general) power of attorney)

 

Custodial care proceedings are costly and custodial care is frequently felt to be a stringent restriction of the family’s autonomy. Court-monitored custodial care proceedings are, however, not required in cases where a lasting general power of attorney has been given. Usually a lasting general power of attorney is given in the form of a comprehensive general power of attorney. It covers the entirety of a person’s property and assets (money, accounts, real estate transactions, etc.) as well as the field of the so-called personal matters and affairs (consent to surgery and medical treatments, choice of a nursing home,  ...... ).

 

In this respect an important point is the careful choice of the person who is given such a power, since powers of attorney must necessarily be based on a high degree of personal trustfulness and in that case there is then no monitoring by the „Amtsgericht“ (County Court).

Sometimes it is also several persons who are so empowered in such a way that they can act only jointly when it comes to certain business transactions, which means to say that this situation allows for a mutual monitoring of one another. 

 

Although a hand-written and personally signed power of attorney is legally valid it can also be granted by having it authenticated by a notary public. It is additionally also recommended to fill in those form sheets which are made available and used by banking institutions.