Die debts with you

Turning off inheritance

When is it worth turning down an inheritance?

Dr. Britta Beate Schön
Legal Expert As of October 02, 2017

Dr. Britta Beate Schön

Britta Beate Schön is responsible for all legal issues at Finanztip. The doctor of law and attorney was head of the legal department at financial service providers such as Telis Finanz AG and Interhyp. Before that, she taught and researched in Japan as a DAAD junior professor for German and European law. She completed her studies in Münster, Geneva, Regensburg and Leipzig. You can reach the author at [email protected]

  • Whoever inherits something, receives not only the property, but also the debts of the deceased.
  • The heir also has to pay the debts of the deceased from his private assets - and not just with the money he inherited.
  • If the estate is over-indebted, the heir can turn down the inheritance within six weeks.
  • If an heir revokes his inheritance, he is replaced by the person who would inherit if he had already died. All successive heirs can also turn down. The state then inherits, but it does not pay for the debts.
  • You have to decide within six weeks whether you want to inherit or not.
  • Get a quick overview of the inheritance. Make a list of assets versus debt.
  • If it is not clear within six weeks whether there are more debts than assets, you should not turn down. You can apply for an estate administration.
  • If you only inherited debts, you should turn down the inheritance. To do this, you can use our sample letter for a succession.

For download

When it comes to inheritance, many people have one romantic idea: After the death of a loved one, unexpected riches suddenly appear - houses in prime locations, expensive jewelry and full bank accounts for the descendants. But in reality it often looks different: Those who inherit by will or by virtue of legal succession do not always get rich. Because sometimes the deceased also leaves behind Debt - or dilapidated real estate.

In such cases you have the option to withdraw the inheritance within a period of six weekscompletely to turn down. Or you use the alternatives to Limitation of inheritance liability.

Then the rash makes sense

Nobody is obliged to take on an inheritance. Everyone has the opportunity to say no to the legacy. This primarily serves to protect the heir, because he not only receives the property, but also the debts of the deceased - for which he is liable with his own private assets. And that can mean financial ruin under certain circumstances.

Estate overindebted - After the death of the testator, you should quickly get a precise overview of his financial situation and debts. Check his accounts, get inquiries from authorities, rummage through the deceased's papers. Then make a list on which you compare assets with debts.

The legacy includes bank balances, securities, valuables, land and real estate. But also funeral costs, loans, maintenance arrears or compulsory portion claims. The costs for the opening of a will or an estate administration can also be added. If it becomes apparent that the deceased left more debits than credits, you should refuse the inheritance.

Property in need of renovation - For example, if you inherit a house that is old and has not been renovated for a long time, you should think carefully about whether you want the property. If you accept the inheritance, you also have to pay for the follow-up costs (for example a new roof, modern electrics, energy-saving heating or disposal of contaminated sites).

So check carefully whether you can afford it. If the inherited property exceeds your financial limits, the only thing left in the end is the sale. And first of all you have to find a buyer. It should be clear to everyone that the proceeds will be correspondingly low.

Inheritance in debt - If the heir himself is over-indebted, he usually spontaneously has little desire to pass the estate on to his creditors. It is understandable that he is initially considering turning down the inheritance. His share would then be given to the next in the line of succession and not to the believers. Nevertheless, in this situation you should be aware that inheritance can also be the chance for a fresh start. Finally, the debt can be (partially) repaid with the help of the inheritance.

Heir is in personal bankruptcy - If the heir is in the process of consumer insolvency, half of the inheritance falls to the insolvency administrator during the conduct of business period (Section 295 (1) No. 2 InsO). If you do not want that, it is possible to reject the inheritance.

This is how you can get information from the banks

As an heir, you have the right to receive information about the bank account of the deceased. However, banks want to see the death certificate or certificate of inheritance for this. The latter can be a problem for you. Reason: Anyone applying for a certificate of inheritance has already accepted the inheritance and can no longer refuse it.

The Federal Court of Justice has therefore decided that financial institutions cannot insist on the submission of a certificate of inheritance (judgment of October 8, 2013, Az. XI ZR 401/12). It is sufficient for you to provide the bank with evidence of your status of heir with the death certificate and, for example, a register. However, it is easiest if you already have a power of attorney for an account or a health care proxy from the testator during your lifetime, which should apply after death.

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Note the form and deadline for the rash

Anyone who declines an inheritance must adhere to certain regulations. It is not enough to tell the family that you don't want anything or just not to move.

Shape - The declaration of exclusion must be submitted to the probate court either for recording or in a publicly certified form (Section 1945 BGB). A simple letter is not enough. You can personally go to the probate court and explain your concern there. The Rechtspfleger will record this in writing and give you the record to be signed. It is best to bring the death certificate with you.

The district court in whose district the deceased had his last place of residence is responsible. If you live in another city, you can also submit the declaration of exclusion to the probate court to which you are assigned (Section 344 (7) FamFG).

If the deceased is German but lived abroad, the Berlin-Schöneberg District Court is your contact.

Content - It is advisable to state the reasons for not showing the inheritance. For example, it can say that the legacy consists mainly of debt. You can use this template or ask a notary in your place of residence for help.

Sample letter of succession

Download our sample letter for a Succession down:

For download

Six week period - You don't have much time to decide for or against the inheritance. If you do not want it, the corresponding declaration must be submitted to the competent probate court within six weeks (§ 1944 BGB). Otherwise the inheritance is considered accepted.

The key date is the day on which you learned about the inheritance, which in the case of close relatives usually coincides with the date of death. The deadline is only extended in exceptional cases: namely if the deceased lived abroad or you were abroad yourself at the time of the inheritance.

It is also the case that the probate court is not responsible. You will only be contacted if there is a will or if you step up as an heir because someone else has already turned it down. Otherwise, the court assumes that you will know for yourself whether you will inherit something if a close relative has died.

When the heir is a minor

If the heir is under 18 years of age, he cannot refuse an inheritance himself. That is what his legal representatives have to do - so mostly the parents. And: The dismissal must be approved by the family court. This can take time, but the processing time is not included in the six-week period.

There is only one special case where no court approval is required: if the underage children have only succeeded in the line of succession after their parents have refused. Then, as a mother or father, you can submit a corresponding application for your offspring to the notary without the family court having jurisdiction.

If you reject an inheritance, there is also no compulsory portion

Take the securities account and reject the apartment in need of renovation? That will not do! You can only turn down the whole inheritance at a time. Then you will not get the compulsory portion that you are entitled to by law. Instead, someone else will take your place (§ 1953 BGB). Who this is determines the will or the legal succession.

If nobody wants to have the legacy, the over-indebted inheritance ends up with the state. He will realize the assets (if any) and thus perhaps pay off part of the debt. The state is not liable for the rest. The creditors therefore get nothing.

That costs a rash

If the inheritance is over-indebted, you can get away relatively cheaply: The fee for the disclaimer at the probate court is a flat rate of 30 euros (KV 21201 No. 7 GNotKG). In the unlikely event that you reject an inheritance that is worthwhile for you, costs will be incurred under the Court and Notary Fees Act. The higher the estate value, the more expensive the procedure is (Section 103 (1) GNotKG).

Can I subsequently reject an inheritance that I have accepted?

If you have accepted an inheritance or if the disclaimer period has expired, there is almost no turning back. Nevertheless, exceptions confirm the rule here as well.In individual cases it is possible that you can still withdraw from the inheritance.

After accepting the inheritance - If unsightly details come to light after the inheritance, you can still reject the estate under certain circumstances. You have to challenge the acceptance of the inheritance. This can be the case if you did not know anything about a high loan from the deceased or from creditors and were convinced that the estate is debt-free or at least not over-indebted (OLG Cologne, decision of May 15, 2017, Az. 2 Wx 109 / 17).

Heirs who have accepted the inheritance without having had a concrete idea of ​​the estate in the hope that it is not over-indebted cannot contest heirs (OLG Düsseldorf, decision of October 17, 2016, Az. I-3 Wx 155/15) . That can be a tightrope walk.

If the heirs do not know anything about tax debts, they cannot get rid of the inheritance. Anyone who has inherited a property and assumed that it was building land, although it is actually a purely agricultural area, cannot contest the acceptance of the inheritance either.

After the deadline - If you let the six-week period expire because you did not know it or thought it was longer, you can appeal (§ 1956 BGB). To do this, however, you usually need a good lawyer who will support you.

What to do if I refuse and change my mind?

Imagine you turned down an inheritance because it was apparently over-indebted. But then it turns out that you were wrong and that the estate throws a lot off. It goes without saying that you want to reverse your decision. Sometimes it is possible.

Grounds for Avoidance - If you find that the deceased has far less debt than initially assumed, this is not considered a ground for challenge. If, for example, you did not know about a house or a securities account that belongs to the estate, then you have a right of avoidance. The boundaries cannot always be drawn clearly. At this point, too, it makes sense to seek legal advice.

Avoidance period - If it is possible to withdraw the disclaimer, the challenge can only take place within six weeks (§ 1954 Paragraph 1 BGB) after you are clear about your mistake. The challenge must be explained to the probate court in writing and justified.

Alternatives to declining inheritance

Rejecting an inheritance isn't the only way to protect yourself from the deceased's debts. If it looks like there is still something left for you after deducting all debts, you should consider limiting liability. Then the debts of the deceased will be paid from the existing inheritance, but you yourself are not financially responsible. For that there are different possibilities:

Have the inheritance organized by an estate administration

If it is not clear what your assets and debts are, you can apply to the court for a so-called estate administration. The court then appoints an administrator to put the entire inheritance in order. He pays all debts with the money that is available. What remains is yours as an inheritance. The procedure costs something, but it also protects you: you do not cover the debts of the deceased with your private assets, but you still have the chance to get something paid out (§ 1975 BGB).

Then you have to apply for an estate insolvency procedure

In the event that you have not refused the inheritance, but later it turns out that the inheritance is over-indebted, you must apply for the opening of estate insolvency proceedings (Section 1980 BGB). That is the last resort from debt. The procedure costs court fees and is rather complex. But it means that you are not liable for the debts. You can find a sample for this procedure here.

When the effort of estate administration is not worth it

An estate administration or bankruptcy costs fees. If the inheritance itself is not enough to cover these costs and both procedures are therefore not considered, you can still defend yourself against the debt. As an heir, you can counter the creditors that the inheritance is insufficient to pay the debts. You have to prove that, though. It is easiest if you submit an application to the court for administration of the estate or for the opening of insolvency proceedings. The court will then reject the application because there were not enough assets to cover the costs of the proceedings (Section 1982 BGB, Section 26 InsO). You can then present the court order to all those who want to collect debts from you as an heir.

You don't have to pay anything for the first three months

If the creditors approach you and want to collect the debts of the deceased, you don't have to pay first. The grace period is three months after acceptance of the inheritance (§ 2014 BGB). But then you have to respond to the demands. Unlike the rejection or the administration of the estate, the defense offers only a short delay.

Think carefully before knocking out

Before carelessly turning down an inheritance, you should consider other options. If you have a larger, rather confusing estate, you should seek legal advice. You can read about how to find the right expert in our guide to legal fees.

Dr. Britta Beate Schön

Dr. Britta Beate Schön

Britta Beate Schön is responsible for all legal issues at Finanztip. The doctor of law and attorney was head of the legal department at financial service providers such as Telis Finanz AG and Interhyp. Before that, she taught and researched in Japan as a DAAD junior professor for German and European law. She completed her studies in Münster, Geneva, Regensburg and Leipzig. You can reach the author at [email protected]

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