Community of Co - heirs in Germany - administration and distribution

Under German law (Opens external link in new windowcheck if German inheritance law applies)  the heir becomes the owner of the decedent's estate upon his death (see § 1922 German Civil Code - BGB). If the deceased leaves more than one heir, the estate becomes the joint property of the co - heirs (pinciple of joint ownership, see § 2032 sec 2 BGB)

 

Administration of the estate

As a consequence of the principle of joint ownership, § 2038 BGB provides that the heirs are jointly entitled to administer the estate. In principle, any act of administration requires unanimous decision of the co-heirs. The following exceptions apply

  •  Measures necessary for preservation of the estate may be undertaken by each co-heir alone.
  • Matters of regular administration may also be decided by a majority vote.
  • One of the co – heirs or any other person may be empowered by the co – heirs to administer the estate.
  • The deceased has, in his will, appointed an estate trustee, who is entitled to distribute the estate in his duefull discreation.

Every co-heir is obliged to give his consent to measures that are necessary for the proper administration of the estate. If one co – heir refuses to give his consent to such measures of administration, a court may substitute his consent on application of a co - heir. Substantial changes to the estate (e.g. disposal of a major asset of the estate) are not regular administrative measures and always require unanimity.

 

Representation of the community of heirs

In principal the co-heirs are only entitled to represent the estate together. The following exceptions apply:

  •  If the heirs have made a resolution on a regular administrative measure (unanimously or by majority vote) the majority or one of the appointed joint heirs can represent the community of joint heirs.
  • According to § 2039 BGB a co-heir may claim performance to all heirs.
  • In cases of emergency every co – heir is entitled to act on behalf the community of heirs.

Dispositions of estate assets allways require ananimous consent of all co – heirs (see § 2040 BGB).

 

Disposition of a share of the estate

A co-heir may dispose of his share in the estate as a whole without the consent of the co - heirs. In this case the other co-heirs have a right of pre-emption pursuant to §§2034-2035 BGB.

 

Dissolution of community of heirs

According to § 2042 sec. 1 BGB every co-heir has the right to demand dissolution of the community of heirs at any time unless the testator excludes this in a testamental disposition. Before the estate is distributed to the co – heirs, the estate liabilities must be paid off and any co – heir can claim payment to the debtor (see § 2046 BGB). Advances given to the heirs must be taken in account (see § 2058 BGB). In principle the co – heirs must unanimously agree to the distribution of the estate assets in a special agreement (so called "Erbauseinandersetzungsvertrag"). If the co – heirs don’t come to such an agreement, each co – heir may apply for mediation by the probate court (see §§ 86 ff. FGG). The probate court can not substitute the denied consent of one heir to the Erbauseinandersetzungsvertrag. Therefore, if the co – heirs do not find consensus, one or more co – heirs must demand the local court to substitute the missing consent of a co – heir to a Erbauseinandersetzungsvertrag. The court will then have to decide if the Erbauseinandersetzungsvertrag is fair and just. In order to avoid such conflicts the testator should determine the distribution of the estate assests to the heirs or appoint a person responsible for the distribution (see § 2048 BGB). The testator may also appoint a Opens external link in new window"Testamentsvollstrecker", who is entitled to take all necessary steps in order to dissolute the community of heirs (see 2204 BGB).

 

Liabiltity of the heirs for estate debts

Pursuant to §2058 BGB, co-heirs are jointly liable for estate debts. Each co – heir is liable for the estate debt seperatly. Until the distribution of the estate he may limit his liablility to his share of the estate (see § 2059 BGB). After the distribution of the estate, each co-heir is liable for the part of the estate debt that corresponds to his share of the inheritance (see § 2060 BGB).

 

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2009 © Jan-Hendrik Frank (Rechtsanwalt und Fachanwalt für Erbrecht)