Thu, Jul. 08, 2004

Inheritance, Assets in Germany I

CK - Washington.   Someone dies in the United States and has assets in Germany, perhaps with a bank. That could be the scenario that drives a few visitors via search engines to this site. The search engines tell web sites what terms visitors want, not who the visitors are or what motivates them, but I assume that if they came here, they found no help elsewhere. Although not a current event or novel issue, I will discuss the topic for these visitors. As always, you do not find legal advice on this site. See a lawyer for such advice.

In a common scenario, a person passes away here or in Germany, had set up a will under American law or had a last permanent residence in, or citizenship of, the United States, and left assets with a German bank, insurer, pension fund or brokerage. In most cases, the matter would begin with a probate proceeding in the United States and the resulting appointment of a representative for the estate, such as a personal representative, an executor and an administrator (or executrix, administratrix). That person is charged, among many things, with collecting assets, including accounts abroad, paying taxes abroad, and discharging debts related to the estate.

In Germany, the representative of the estate will need to obtain a special authorization before a bank would release funds to the estate. For purposes of simplified illustration, you can compare the German procedures to an ancillary administration for real estate located in state B when the probate case is handled in state A. The bank would normally require a certificate of inheritance. This certificate of inheritance is somewhat similar, in its purposes, to the letters of administration that a probate court would issue in the United States: Serve as evidence of a particular person to act on behalf of an estate, or - even more simplified - as a power of attorney. In German, this document is called Erbschein.

Now, mind you, the bank, like this website, is not in the business of providing legal advice. It may not inform you that German law offers additional avenues, for instance, a document with a properly long name called Testamentsvollstreckerzeugnis which in some ways is akin to the letters of administration that a probate court in America issues to the representative of the estate. Which of the avenues works best for you depends on numerous factual circumstances. There are also practical and cost considerations. Sometimes, the solution depends on what judges, notaries and attorneys are familiar with when it comes to international law.

Before you can apply for the appropriate document that satisfies the bank's requirements, usually you need to jump through a few hoops, among them the satisfaction of taxes. Those hoops will be the topic of a follow-up to this note.

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