German Inheritance Law: Succession, Compulsory Share, and Tax

Under German inheritance law, the moment a person dies their entire estate — every asset and every debt — passes automatically to their heirs. There is no probate judge holding title, no executor standing between the heirs and the bank accounts, and no waiting period. Section 1922 of the German Civil Code (Bürgerliches Gesetzbuch, or BGB) calls this universal succession, and it is the single fact that shapes everything else: who inherits, what they owe, how quickly they must act, and what a will can and cannot do.¹

That instant transfer is why the rules below matter so much in practice. Heirs step directly into the deceased’s legal position. If the estate is solvent, they own it outright. If it is not, they owe the debts personally unless they act within a short window to walk away.

Does German Law Even Apply

The first question in any cross-border case is whether German rules govern the estate at all. Under the EU Succession Regulation (Regulation 650/2012), the default is the law of the country where the deceased had their habitual residence at death, and that law applies to the entire worldwide estate.² A British retiree living in Munich would therefore fall under German succession law by default.

The Regulation lets a person choose the law of their nationality instead, but the choice has to be stated expressly in a will or similar testamentary document.² Without that clause, an expat in Germany is subject to the compulsory share rules described below. Dual nationals can pick either citizenship’s law. The Regulation covers all EU member states apart from Denmark and Ireland.

Who Inherits Without a Will

When there is no valid will, the BGB sorts relatives into ranked orders. First-order heirs are children and their descendants. Second-order heirs are the parents of the deceased and their descendants: siblings, nieces, nephews. Third-order heirs are grandparents and their lines. If even one first-order heir is alive, everyone in the lower orders is excluded entirely.¹

Within an order, a closer living relative blocks more distant ones. If a child predeceased the parent, that child’s own children step into the missing parent’s share and split it among themselves.

The Surviving Spouse

A spouse sits outside the numbered orders and inherits alongside whichever order is in line. Section 1931 of the BGB gives the spouse one-quarter of the estate when inheriting with first-order heirs and one-half when inheriting with second-order heirs or grandparents. If no relatives from any order survive, the spouse takes everything.¹

Most married couples in Germany live under the default matrimonial regime of community of accrued gains (Zugewinngemeinschaft). To equalize the gains built up during the marriage, the BGB adds a flat one-quarter to the surviving spouse’s intestate share. In a typical family with children, that means the spouse takes half of the estate (one-quarter base share plus one-quarter equalization), and the children split the other half.

The Compulsory Share

A will cannot fully cut close family out. Under Section 2303 of the BGB, descendants, parents, and a spouse who have been excluded by will can still claim a compulsory share (Pflichtteil) worth half of what they would have received under intestate rules.³ The claim is a cash claim against the heirs, calculated from the total value of the estate at death, not a right to any specific asset.

Take a disinherited child whose intestate share alongside a surviving spouse would have been one-quarter. The compulsory share is half of that: one-eighth of the estate’s value, payable in money. Nothing happens automatically. The excluded family member has to demand it, and the standard three-year limitation applies, running from the end of the year in which the claimant learns of both the death and the exclusion.⁴

Lifetime Gifts Get Pulled Back In

A testator cannot dodge the compulsory share by handing assets out during their lifetime. Section 2325 of the BGB adds the value of gifts made within ten years before death back into the calculation. The inclusion slides year by year: a gift made in the final year before death counts fully, and the counted amount drops by ten percent for each additional year. After ten full years, the gift falls out of the calculation entirely.

Gifts between spouses work differently. The ten-year clock does not begin until the marriage ends, whether by death or divorce. A property given to a spouse twenty years before death still counts at full value in the compulsory share calculation if the marriage lasted until the death. The rule blocks couples from quietly moving assets between themselves to shrink their children’s future claims.

When a Testator Can Deprive Someone Entirely

Depriving a family member of even the compulsory share is possible but narrow. Section 2333 of the BGB limits it to attempts on the life of the testator or someone close to them, serious criminal offenses against the testator, willful failure to provide legally owed support, or a final prison sentence of at least one year for an intentional crime that makes participation in the estate unreasonable.³ The deprivation has to be stated in the will along with the reason. General displeasure with a relative’s choices does not qualify.

Wills and Inheritance Contracts

Two forms of will dominate. A holographic will under Section 2247 must be written entirely in the testator’s own handwriting and signed at the end. Date and place should be included, though omitting them does not automatically void the will if they can be established another way. No witnesses are needed.⁵ A typed or printed document does not qualify, even if the testator signs it by hand.

A public will under Section 2232 is made before a notary. The testator either declares their wishes orally or hands over a document identified as their last will. The notary records it and deposits it with the local probate court.⁶ The extra cost buys real protection: the notary checks mental capacity and formal validity, and the court-held original is unlikely to be lost or later challenged on form.

The Berlin Will

Married couples often use a joint will known as the Berlin Will. Each spouse names the other as sole heir, with the children as final heirs after the surviving spouse dies. That protects the surviving spouse but technically disinherits the children at the first death, opening the door to compulsory share claims then and there. Many Berlin Wills include a penalty clause: any child who demands their compulsory share after the first parent’s death is also disinherited when the second parent dies.

Inheritance Contracts

An inheritance contract (Erbvertrag) creates binding commitments that the testator generally cannot revoke unilaterally, unlike a will that can be changed at any time. It must be notarized, with both parties present at the same time. It comes up most often in business succession, where a future heir invests years of work into a company in reliance on the promise of inheriting it.

The Six-Week Window to Renounce

Because debts pass with the assets, renouncing an insolvent estate is the most time-sensitive decision in the whole system. An heir has just six weeks to file a renunciation (Ausschlagung) with the probate court, running from the moment they learn of the inheritance and the reason they were called as heir. The deadline stretches to six months if the deceased’s last habitual residence was abroad or the heir was outside Germany when the clock started.⁷

Miss the deadline and the acceptance is automatic, debts included. The renunciation has to be filed either in person at the probate court or through a notarized declaration, and it has to be unconditional. You cannot keep the desirable assets and shed the debts. Once filed, the renouncing heir is treated as if they had died before the testator, and the share moves to the next person in line.

If acceptance has already happened, or the six weeks have run, and the estate then turns out to be deeply in debt, the remaining options are narrower and messier: estate insolvency proceedings, or a request through the probate court to limit liability to the estate’s assets. The clean exit is the six-week window.

Getting the Certificate of Inheritance

To actually access accounts, transfer property, or deal with authorities, heirs generally need a Certificate of Inheritance (Erbschein) from the probate court. The application requires the death certificate, birth and marriage certificates that establish the family tree, and information about any known wills or inheritance contracts.⁸ Heirs sign an affidavit (eidesstattliche Versicherung) confirming their statements. False statements are criminal.

You can file directly with the probate court or through a notary. The court route is cheaper. Going through a notary tends to be faster because the affidavit is recorded on the spot. Fees scale with the net value of the estate under the Court and Notary Costs Act (GNotKG). For an estate worth €50,000, expect total court fees around €330. For €500,000, roughly €1,870 in court fees alone.

The certificate is not always required. If the deceased left a notarized will or inheritance contract, banks and the land registry will often accept those documents directly as proof of heir status. That is one of the quiet practical advantages of a public will.

The European Certificate of Succession

For estates that reach across EU borders, heirs can apply for a European Certificate of Succession under Article 62 of the EU Succession Regulation, either instead of or alongside the German Erbschein. It is recognized across EU member states without any additional procedure and can prove heir status, show specific asset attributions, and confirm an executor’s powers.⁹ Anyone acting in good faith on the certificate’s information is protected. Its use is voluntary, and it does not replace the Erbschein inside Germany.

The Community of Heirs

When more than one person inherits, they form a community of heirs (Erbengemeinschaft) under Section 2032. They do not each own a slice of each asset. They jointly own the whole estate as a collective, and every significant decision needs the agreement of all of them. Banks, insurers, and the land registry all want signatures from every co-heir before releasing funds or transferring title.

This is where cases stall. A single uncooperative co-heir can block the sale of a house or the release of a bank account. Any co-heir can demand partition, but the others can push back over timing or valuation. If a co-heir cannot be located, the probate court can appoint a curator (Abwesenheitspfleger) under Section 1911 to protect that person’s interests; if an heir’s identity is unknown, a different curator (Nachlasspfleger) under Section 1960 does the same job. Until the situation resolves, the estate is effectively frozen.

Inheritance Tax

Germany taxes inheritances based on how the recipient is related to the deceased. The Inheritance and Gift Tax Act (Erbschaftsteuer- und Schenkungsteuergesetz, or ErbStG) puts heirs into three tax classes, each with its own personal exemption and its own set of progressive rates.

Tax Classes and Personal Exemptions

Tax Class I covers spouses and registered partners (€500,000 exemption), children and stepchildren (€400,000 each), grandchildren of a deceased child (€400,000), grandchildren of a living child (€200,000), and parents inheriting from a child (€100,000).
Tax Class II covers siblings, nieces, nephews, stepparents, children-in-law, parents-in-law, and divorced spouses, with a €20,000 exemption each.
Tax Class III covers everyone else, including unmarried partners and friends, with the same €20,000 exemption.

Surviving spouses and children get an additional maintenance exemption (Versorgungsfreibetrag) on top of the personal one. For the spouse, that adds up to €256,000. For children, it ranges from €10,300 to €52,000 depending on age, with younger children getting more.

The Rates

After the exemption comes off, the rest is taxed progressively. Class I runs from 7 percent on amounts up to €75,000 to 30 percent on amounts above €26 million. Class II runs from 15 percent to 43 percent across the same brackets. Class III applies a flat 30 percent up to €6 million and 50 percent above that. These rates have been in place since 2010 and apply to both inheritances and lifetime gifts.

The gap between the classes is large. Two siblings inheriting €500,000 each from a parent pay no tax at all: the €400,000 exemption plus the maintenance exemption absorbs it. An unmarried partner inheriting the same €500,000 is taxed on €480,000 at Class III rates, producing a bill of roughly €144,000. That disparity is one of the strongest reasons unmarried couples in Germany plan carefully.

Filing and Payment

Heirs must notify the tax office of the inheritance within three months of learning about it. The tax office then decides whether a full return is required and sets an individual filing deadline. Once the assessment notice arrives, payment is due within one month.¹⁰ Banks often freeze the deceased’s accounts until the tax picture is clear, so early notification is practical, not just legally required.

US Heirs and Cross-Border Estates

For heirs in the United States receiving from a German estate, a 1982 treaty helps prevent double taxation. The Convention for the Avoidance of Double Taxation with Respect to Taxes on Estates, Inheritances, and Gifts, as amended by a December 1998 Protocol, allows tax paid in one country to offset liability in the other.¹¹ It covers only federal taxes on both sides. US state-level estate or inheritance taxes are not addressed and can add exposure.

The 1998 Protocol specifically addresses the marital deduction, allowing double the individual deduction amount for transfers between spouses. A US heir may face both German inheritance tax (on German-situs assets) and US estate tax (on a US person’s worldwide estate), with the treaty credit reducing the combined bill. US financial institutions will typically want a German Certificate of Inheritance or a European Certificate of Succession before releasing assets, sometimes with an apostille attached. Coordinating the two systems almost always requires professional advice on both sides.

1
LawEuro. German Civil Code BGB – Law of Succession
2
EUR-Lex. Regulation (EU) No 650/2012 on Jurisdiction, Applicable Law, Recognition and Enforcement of Decisions and Acceptance and Enforcement of Authentic Instruments in Matters of Succession
3
LawEuro. German Civil Code – Division 5 Compulsory Share (Section 2303 – 2338)
4
German Federal Ministry of Justice. German Civil Code BGB – Section 195
5
German Federal Ministry of Justice. German Civil Code BGB – Section 2247
6
German Federal Ministry of Justice. German Civil Code BGB – Section 2232
7
Verwaltung.bund.de. Waiver of Inheritance
8
Verwaltungsportal Hessen. Apply for a Single Certificate of Inheritance
9
EUR-Lex. Regulation (EU) No 650/2012 – Article 62
10
Verwaltung.bund.de. Notify the Tax Office of an Inheritance or Gift
11
Federal Foreign Office. Double Taxation: Estates, Inheritances, Gifts