People always die: german-american inheritance law in focus
When a person dies, they leave behind not only grief and memories, but also their legacy. But inheritance can get complicated, especially if the decedent had a relationship with or was a resident of another country. In the case of a German-American inheritance, legal aspects often need to be considered as well.
German inheritance law differs in many ways from U.S. inheritance law, which can affect how an estate is handled. In practice, this can lead to conflicts and problems, especially when it comes to deciding which national law should be applied.
Tax issues can also play a role, as the different tax systems in the two countries can affect the amount of inheritance tax. It is therefore often advisable to consult an expert in German-American inheritance law to ensure a smooth procedure.
In this series of articles, various aspects of German-American inheritance law will be examined. From the applicability of different national legal systems to the settlement of an estate involving real estate or business assets in both countries, relevant questions and issues are addressed.
Death is inevitable, but with careful planning, probate can be simplified and eased for survivors. In this series of articles, we would like to provide you with an overview of the most important aspects of German-American inheritance law in order to assist you in your decision-making and planning process.
Welcome to the Introduction to German-American Inheritance Law
Inheritance law is an important part of the legal system and regulates what happens to a person’s assets after their death. In Germany and the USA, there are different laws and regulations in this area that must be observed.
This introduction deals in particular with German-American inheritance law, which is frequently applied in inheritance cases with cross-border implications. Among other things, it will be clarified which succession applies in both countries and what the legal situation is in the case of an inheritance at a foreign domicile.
In order to gain an overview of German-American inheritance law, this introduction will also explain the basic terms and concepts that are essential for successful advice on inheritance law. Among other things, the law of the execution of a will, claims to a compulsory portion and inheritance taxes will be dealt with.
Ultimately, this introduction is intended to help you take the right steps to protect your interests and avoid disputes in the event of an inheritance case involving German-American inheritance law.
Basics of inheritance law in Germany and the USA
In Germany, the law of succession is regulated in the German Civil Code (BGB). It governs a person’s transferable rights and obligations, which pass to others after death. According to the law of succession the heir is entitled to a share of the inheritance. However, there are also legal heirs who have a certain legal inheritance quota. The law of succession can be modified by will or inheritance contract.
In the USA there is no uniform federal inheritance law, but rather an inheritance law that varies from state to state. Inheritance law in the USA is generally very flexible. There are no legal heirs and no legal inheritance quotas. This means that one can determine in the will who should inherit and in what amount.
In Germany there is the right to a compulsory portion. Persons who were disinherited by the testator are entitled to a compulsory portion. They are legally entitled to half of the legal share of the inheritance. There is no right to a compulsory portion in the USA. The testator can determine in the will who should and who should not inherit.
- In Germany, the principle of universal succession applies. The heir assumes the legal status of the decedent and thus takes over his or her assets and debts.
- In the USA, the principle of singular succession applies. Each heir receives only a certain part of the estate.
| Inheritance law is regulated in the Civil Code. | There is no uniform federal inheritance law, but rather inheritance law that varies from state to state. |
| There are legal heirs. | There are no legal heirs. |
| There is a right to a compulsory portion. | There is no right to a compulsory portion. |
| The principle of universal succession applies. | The principle of singular succession applies. |
Inheritance law is regulated very differently in Germany and the USA. In Germany, there are statutory heirs and a right to a compulsory portion, whereas in the USA there are no statutory heirs and no right to a compulsory portion. Inheritance law in the U.S. is also more flexible than in Germany, since you can specify in your will who should inherit and how much.
Effects on succession in binational families
Inheritance law is a complex issue that often becomes even more complicated in the case of binational families. German-American inheritance law in particular can raise many questions. An important question is what effect nationality has on succession.
In the USA, the principle of estate administration applies, d.h. the estate is administered by a professional administrator. In Germany, on the other hand, there is intestate succession, in which the next of kin of the deceased inherit. Therefore, if an American lives in Germany and dies, conflicts may arise if German and American inheritance laws apply simultaneously.
Another challenge is the question of recognition of foreign wills. If, for example, an American has written a will according to American law, this may not be recognized in Germany. Here it is important that the will is legally valid in both countries to avoid conflicts.
In general, it is therefore advisable to deal with the subject of inheritance law at an early stage and, if necessary, to consult an expert. Especially in the case of binational families, the effects on the succession can be very complex. Good preparation can help prevent future conflicts and ensure a smooth settlement of the estate.
Taxation of inheritances in the USA and Germany
Germany and the USA have different tax systems for the taxation of inheritances. In Germany, there is inheritance tax, which is payable on the death of the testator. The amount of tax depends on the value of the estate. Tax allowances are granted, which vary depending on the degree of relationship.
In the USA, there is a federal tax on inheritances similar to Germany, but states can also levy additional taxes of their own. The federal tax exemption amount is significantly higher in the U.S. than in Germany and currently exceeds $11 million per person.
In both countries, there are ways to reduce the tax burden, for example by making a gift during one’s lifetime or through bequests. Spouses can also take advantage of the tax-free transfer of assets in both the U.S. and Germany.
Compared to Germany, the taxation of inheritances in the USA is rather generous. A possible abolition of the inheritance tax in the USA by the political leadership is also currently under discussion.
Overall, the issue of inheritance taxation in both countries is complex and multi-faceted. It is advisable to obtain accurate information in advance and seek professional advice if necessary.
Solutions and recommendations
In the context of German-American inheritance law, there are some challenges that need to be considered. One possible solution is an inheritance contract, which enables the parties involved to reach an amicable settlement. Here, the testators can already make contractual agreements during their lifetime in order to create clear regulations for the inheritance.
Another approach is to choose the appropriate law, as inheritance laws are different in both countries. A careful examination can help to find the more favorable regulation and thus ensure a fair distribution of the inheritance.
It is also advisable to deal with the issue at an early stage in order to avoid possible disputes and conflicts. Consultation with a specialist lawyer for inheritance law can help to find a harmonious solution. Questions regarding wills, estate distribution or compulsory shares can also be clarified here.
- Drawing up an inheritance contract
- Examining the appropriate law
- Early advice from a specialist lawyer
In summary, it should be emphasized that careful planning and advice can help avoid potential conflicts and ensure a fair distribution of the inheritance. The choice of the appropriate law and the preparation of an inheritance contract can be helpful here.