Inheritance and Wills in Germany: Procedure, Renunciation, and Taxes

Why it is better to think about inheritance in Germany in advance

German inheritance law, Erbrecht, is important not only for elderly people and owners of large estates. It affects spouses, partners, parents, children, property owners, mortgage borrowers, and people who live in Germany but have family or assets in another country.

If there is no will, the estate is distributed according to the law. This can lead to an unexpected result: the surviving spouse does not always automatically receive everything, and several people can become heirs at the same time. Such a group is called an Erbengemeinschaft. Until the estate is divided, it owns the estate jointly, so decisions on real estate, the sale of assets, and debts often require the consent of all participants.

It becomes especially complicated when the estate includes housing, a mortgage, a business, minor children, or disputed family relationships. A will does not solve every possible conflict, but it helps define in advance who should receive what.

What happens if there is no will

In Germany, there are two basic inheritance scenarios:

• gesetzliche Erbfolge: inheritance under the law;
• gewillkürte Erbfolge: inheritance under a will or inheritance contract.

If the deceased did not leave a valid will, the statutory order of succession applies. Relatives are divided into classes, called Ordnungen.

Order	Who belongs to it
1st order	children, grandchildren, great-grandchildren
2nd order	the deceased’s parents, siblings, nephews and nieces
3rd order	grandparents, uncles, aunts, cousins and more distant relatives
further orders	more distant relatives

If there are heirs of the first order, more distant relatives usually do not inherit. Children inherit in equal shares; if a child died before the deceased, that child’s descendants can take their place.

The spouse’s share depends on the matrimonial property regime and on which relatives also inherit. In a typical marriage without a marriage contract, Zugewinngemeinschaft applies: if there are children, the surviving spouse often receives half of the estate, and the other half is divided among the children. But in cases of Gütertrennung, Gütergemeinschaft, an international marriage, or a marriage contract, the result may differ.

Why an Erbengemeinschaft can become a problem

An Erbengemeinschaft is not a set of separate shares in each asset, but joint ownership of the estate until it is divided. If the estate includes an apartment or house, one heir usually cannot simply sell the property without the others.

Problems often arise when:

• one heir wants to live in the house while another wants to sell;
• the estate includes a mortgage or other debts;
• some heirs live abroad;
• there are minors among the heirs;
• the circle of heirs has not yet been established;
• the assets are difficult to value or divide.

If a share belongs to a minor, transactions involving real estate and major assets may require the involvement of the Familiengericht. That is why families with children, a mortgage, and property should discuss a will and death coverage in advance.

Husband and wife took out a mortgage from a German bank and built a house. If one spouse suddenly dies, and the estate includes debts and the shares of minor children, the surviving spouse may find it difficult to sell the home quickly or restructure the debt. In such a situation, a carefully prepared will, liquid reserves, and, if necessary, term life insurance can help.

A will determines who will inherit in Germany.

What can be specified in a will

A will allows you to depart from the standard statutory order. In it, you can:

• appoint one or more heirs;
• distribute shares among the heirs;
• leave specific assets through a Vermächtnis;
• appoint Ersatz­erben in case the main heir cannot inherit;
• appoint an executor of the will, a Testamentsvollstrecker;
• set rules for minor children;
• support a partner who is not a spouse;
• leave property to an organization or foundation.

At the same time, freedom of testation is not absolute. Close relatives may have a right to a compulsory share, the Pflichtteil. Usually, this is a monetary claim against the heirs, not the automatic receipt of a specific asset.

Those who usually fall under the Pflichtteil are a spouse or registered partner, children, and, if there are no children, the parents of the deceased. The amount and whether it can be claimed depend on the specific family situation.

How to draw up a will in Germany

In Germany, two formats are most commonly used:

1. Handwritten will: entirely written by hand, with a signature, place, and date. A typed text with a signature usually does not replace a handwritten will.
2. Notarial will: prepared or certified by a notary. It costs money, but it reduces the risk of formal mistakes and often simplifies later procedures.

For spouses and registered partners, joint forms are possible, for example a Berliner Testament, but they have tax and family-law consequences. Such a document is best prepared after consulting a notary or a Fachanwalt für Erbrecht.

If a person has assets in several countries, foreign citizenship, a marriage with an international element, or heirs outside Germany, it is important to check which country’s law will apply. Within the EU, it is possible to choose the applicable law in a will, but this must be formulated correctly.

How heirs find out about the will

After death, the will must reach the Nachlassgericht. This is usually the probate division of the Amtsgericht. The court opens the will and notifies the interested parties.

If there is no will, heirs sometimes need an Erbschein, a certificate of inheritance. A bank, the land register, or other institutions may require it. If there is a notarized will, an Erbschein may in some cases not be necessary, but this depends on the situation and on the requirements of the specific institution.

How to renounce an inheritance

An inheritance includes not only assets, but also debts. If an heir is not sure that the assets exceed the liabilities, they need to assess the situation quickly and decide whether to accept the inheritance or renounce it.

Renunciation is called Ausschlagung der Erbschaft. Under § 1944 BGB, the standard deadline is six weeks from the moment the heir learned about the inheritance and the basis of their succession. The deadline is extended to six months if the deceased’s last Wohnsitz was only abroad or if the heir was abroad when the period began.

The renunciation is formalized through the Nachlassgericht or through a notary. A simple letter or oral statement to relatives is not enough. If the deadline is missed, the inheritance is usually considered accepted, and it becomes much more difficult to renounce it later.

What to check before accepting an inheritance

Before accepting an inheritance, it is useful to gather at least the following information:

• whether there are bank accounts, real estate, a car, securities, or a business;
• whether there are loans, Bürgschaft obligations, tax debts, unpaid bills, or court disputes;
• who else is an heir;
• whether there is a will, marriage contract, or inheritance contract;
• whether an Erbschein, Grundbuch changes, or a property valuation are needed;
• who pays for the funeral and ongoing expenses related to the estate.

If the debts are unknown, it is worth getting advice quickly. In Germany, there are tools to limit an heir’s liability, but they require the right steps and deadlines.

Who pays for the funeral

Funeral expenses usually count as obligations of the estate. In practice, the issue can be more complicated if there are no heirs, everyone has renounced the inheritance, or the assets are insufficient. In that case, rules on relatives’ duty to pay for funerals and the law of the federal state may apply.

That is why you should not accept an inheritance only because of emotional pressure. If there is a risk of debts, first check the assets, liabilities, and renunciation deadlines.

Inheritance tax in Germany

An inheritance in Germany may be subject to Erbschaftsteuer. The tax depends on the degree of kinship, the value of the estate, the tax class, and the Freibetrag, the tax-free allowance.

The main Freibeträge under § 16 ErbStG:

Heir	Tax-free allowance
spouse or registered partner	500,000 €
children and children of deceased children	400,000 €
grandchildren	200,000 €
other persons in Steuerklasse I	100,000 €
persons in Steuerklasse II	20,000 €
persons in Steuerklasse III	20,000 €

Tax classes under § 15 ErbStG in simplified form:

Class	Who usually belongs to it
I	spouses, registered partners, children, stepchildren, grandchildren, parents in inheritance cases
II	parents in gift cases, siblings, nephews and nieces, stepparents, sons-in-law/daughters-in-law, former spouses
III	all other heirs and organizations, if there is no special exemption

Rates under § 19 ErbStG apply to the taxable portion after deducting the Freibetrag:

Taxable amount up to	Class I	Class II	Class III
75,000 €	7%	15%	30%
300,000 €	11%	20%	30%
600,000 €	15%	25%	30%
6,000,000 €	19%	30%	30%
13,000,000 €	23%	35%	50%
26,000,000 €	27%	40%	50%
over 26,000,000 €	30%	43%	50%

Example: if a child inherits assets worth 450,000 €, the basic Freibetrag is 400,000 €. Tax is not calculated on the full amount, but on the remaining 50,000 €, if there are no additional exemptions or special valuation rules.

Special cases that cannot be resolved by a general article

An individual review is needed if:

• there is real estate in Germany and abroad;
• the deceased or heirs live in different countries;
• there are minor heirs;
• the estate includes a business, shares in a GmbH, crypto assets, or complex investments;
• there are debts, guarantees, or tax disputes;
• someone plans to disinherit a close relative;
• spouses want to draw up a Berliner Testament;
• the heir receives social benefits or is in Insolvenzverfahren.

In such situations, it is better to contact a notary, Steuerberater, or Fachanwalt für Erbrecht before the renunciation deadline expires or the estate is effectively accepted.

Short checklist

If you want to bequeath property in Germany:

• make a list of assets and debts;
• decide who should be the heir and who should receive a Vermächtnis;
• check the Pflichtteil rights of close relatives;
• choose the form of the will: handwritten or notarized;
• in an international situation, check the applicable law;
• store the document so that it reaches the Nachlassgericht.

If you have received an inheritance:

• clarify the basis of succession: law, will, or contract;
• check the Ausschlagung deadline;
• assess the assets and debts;
• do not sign disputed documents without understanding the consequences;
• clarify whether an Erbschein is needed;
• check possible Erbschaftsteuer.

Inheritance in Germany is a legal and financial procedure, not just the transfer of property to relatives. The earlier a will, insurance, a list of assets, and clear instructions are prepared, the lower the risk for the family after the death of the deceased.