There is no more doubt: Germany is an immigration country. However, not all foreigners who live and work in Germany aspire German citizenship. Indeed, many of them want to establish a permanent residency, raise a family, and earn a living, but not give up their nationality and/or become German citizens. This begs the question which law will govern German estate planning and German inheritance law issues.
According to German private international law, as a rule, succession is governed by the law of the country of which the deceased was a national at the time of his death. This is true regarding movables and immovables. However, as to immovables located in Germany, the testator may, in the form of a testamentary disposition, choose German law. Such a choice of law is not possible regarding movables.
Exceptions as to the unconditional application of the law of the country of which the testator was a citizen may arise from Treaties between Germany and other countries. Turkish citizens residing in Germany, for example, are subject to the bilateral agreement between Turkey and Germany dealing with estate. This agreement prescribes that immovables shall be bequest according to the law of the country where the immovables are located.
As explained above, German private international law refers to the law of the country of which the testator was a citizen at the time he died. However, this may nevertheless result in the – at least partial – application of German law if the foreign law refers back to German law.
The law of many US federal states, for example, determines that as to inheritance law issues the law of the country shall be applicable where the testator and US citizen had its domicile when he died as far as not immovables located in the US are concerned.
Currently, the citizenship of a person decides on the law applicable on his succession. In 2015, an EU Directive will harmonize the regulations on applicable law and competence of court or jurisdiction. As a result, the habitual place of residence of a person will be decisive. The EU Directive, which came into effect in August 2015, is valid in all EU countries except the UK, Ireland and Denmark.
When planning your estate, you need to be aware of certain formal requirements. If a testator, for example, intends to dispose of his assets by a testamentary disposition, he has to comply with the formal requirements of the relevant jurisdiction for his will to be valid. At least insofar as German law will be applicable, it is not mandatory that the formalities of German inheritance law will be observed. A testamentary disposition, e.g., is valid as regards its form if its form complies with the formal requirements of a country the testator was a citizen of at the time the will was made or at the time of his death. Likewise, a will is valid if it complies with the requirements of the law of the place where the testator made the will, or where he had his domicile or habitual residence, be it at the time the will was made or at the time of his death. As regards immovables, a will also is valid, if it complies with the law of the place they are located.
This is why we recommend foreigners living in Germany to familiarize themselves with the particularities of German inheritance law in good time when dealing with estate planning. E.g., according to German inheritance law, children (and parents if, according to the individual circumstances, they are entitled to inherit) cannot be totally disinherited. If the testator does not appoint them heir, they may claim a compulsory share.
Your contact person for all issues related to estate planning in Germany, German inheritance law and succession planning is German Inheritance Lawyer Thomas Schwab. Please contact us by e-mail (firstname.lastname@example.org) or by phone (+49 69 76 75 77 80).