The Legal Framework: EU Succession Regulation No. 650/2012

Cross-border inheritance involving Germany has been significantly shaped by EU Succession Regulation No. 650/2012, commonly known as the Brussels IV Regulation, which came into force on 17 August 2015. This Regulation establishes a unified set of rules for determining which country's law governs the succession to an estate where a deceased person had connections to more than one EU member state.

Under Brussels IV, the default rule is that the law of the country where the deceased was habitually resident at the time of death governs the entire succession — both movable assets (such as bank accounts, shares, and personal property) and immovable assets (such as real estate). This represents a significant departure from the previous position under German private international law, which applied different rules to movable and immovable assets.

However, Brussels IV also allows individuals to make an explicit choice of law — specifically, to elect that the law of their nationality governs their estate rather than the law of their habitual residence. This election must be made in a formal testamentary disposition. For a German national living abroad, for example, this election can ensure that German inheritance law applies to their entire estate regardless of where they are resident at death — an option that may be highly advantageous depending on the family's circumstances and the relative tax implications of each jurisdiction.

German Inheritance Law: The Erbschaft and Pflichtteil

Under German civil law (BGB — Bürgerliches Gesetzbuch), succession follows a system of intestate succession by degree of kinship when no valid will exists. The estate passes first to direct descendants (children), then to parents and their descendants, then to grandparents and their descendants, and so on. A surviving spouse has special rights dependent on the matrimonial property regime and the number and nature of other heirs.

A critical concept in German inheritance law is the Pflichtteil — the compulsory portion. Certain close relatives (children, parents in specific circumstances, and spouses) cannot be entirely disinherited under German law. Even if excluded from the will, they retain a statutory right to a cash payment equal to half of their intestate share of the estate. This Pflichtteil claim can complicate estate planning significantly, particularly in blended families or situations where the testator wishes to benefit a new partner or non-family beneficiary.

The implications of the Pflichtteil for cross-border estates are profound. A testator who has assets in Germany — even if living abroad and subject to foreign law — may find that their German-sited assets are subject to Pflichtteil claims by German-resident heirs. Understanding this interaction and planning around it is a core part of what LexBerg's estate planning practice does for international clients.

German Inheritance Tax (Erbschaftsteuer)

Germany levies inheritance tax (Erbschaftsteuer) on transfers of wealth on death, and the rules are complex — particularly in cross-border situations. The tax applies where either the deceased or the beneficiary is domiciled in Germany, or where the assets being inherited are located in Germany (for certain asset classes, even if neither the deceased nor the beneficiary is German-resident).

Tax rates range from 7% to 50% depending on the relationship between the deceased and the beneficiary and the value of the inheritance. The most favourable tax class (Steuerklasse I) applies to spouses, registered partners, children, and grandchildren. Allowances also vary significantly: a surviving spouse receives a personal allowance of €500,000; each child receives €400,000; and more distant relatives and unrelated beneficiaries receive substantially lower allowances.

Where Germany has concluded a double taxation treaty covering inheritance with the country of the deceased's residence — as it has with France, the USA, Denmark, Sweden, Switzerland, and a small number of other states — those treaty provisions take precedence and may reduce or eliminate double taxation. Where no treaty exists, German domestic law provides some relief through a unilateral credit mechanism, but the outcome is not always equitable and advance planning is essential.

Probate and the European Certificate of Succession

One of the most practically useful tools introduced by Brussels IV is the European Certificate of Succession (ECS), a standardised document that certifies the rights of heirs, legatees, executors, and administrators of an estate across all participating EU member states. The ECS is issued by the competent authority in the country whose law governs the succession and is automatically recognised in all other participating member states without further formality.

In Germany, a national Erbschein (certificate of inheritance) was traditionally required to administer a German estate and access German bank accounts, land register records, and other assets. The ECS supplements but does not entirely replace the Erbschein for domestic purposes. Understanding which document is required for each asset class and jurisdiction is a key practical consideration in cross-border estate administration.

LexBerg regularly assists executors and administrators — often family members acting without professional legal training — to navigate the complex procedural requirements of German and cross-border estate administration. This includes applying for the ECS or Erbschein, communicating with German financial institutions and land registries, coordinating with foreign counsel, and managing Pflichtteil claims from disgruntled heirs.

Planning Ahead: Wills, Testaments, and International Structures

For individuals with assets or family connections in Germany, advance estate planning is not a luxury — it is a necessity. A well-drafted will or inheritance contract (Erbvertrag) that takes account of both German law requirements and the law of any other relevant jurisdiction can significantly reduce the tax burden on heirs, avoid or manage Pflichtteil claims, and prevent the lengthy and expensive disputes that commonly arise in intestate or poorly planned cross-border estates.

Germany recognises foreign wills provided they comply with the formal requirements of either the place of execution, the deceased's nationality, or the country of habitual residence. However, wills drafted under common law principles — for example, a simple English or American will — may not achieve the intended outcomes when applied to a German estate, particularly in relation to the Pflichtteil, matrimonial property rights, and the tax position of the estate.

We strongly recommend that any individual with meaningful assets or family connections in Germany — whether a German national living abroad, a foreign national with German property or a German spouse, or an executor dealing with a German element of an international estate — seek specialist legal advice at the earliest possible stage. The cost of early planning is invariably a fraction of the cost of resolving a dispute or recovering from poor planning after the fact.