Sat, Aug. 14, 2004

Inheritance, Assets in Germany II

CK - Washington.   The initial assumptions and steps to recover assets in Germany in a probate proceeding involving an American decedent, discussed in Inheritance, Assets in Germany I, lead to the issues of the satisfaction of tax obligations and obtaining proper papers from the German probate court, such as a certificate of inheritance, Erbschein, or letters of administration, Testamentsvollstreckerzeugnis.

The same applies to German citizens who died in the United States after obtaining American residence status--which may be a permanent residence, as it is defined under immigration law, or resident status as defined under federal tax law or under state estate, inheritance, probate, family or tax law, or a mix of factors that take into account all of these aspects. Again, as stated before, this note does not advise you on what applies to your situation. You need to obtain the advice from your attorney.

With a German citizen who had acquired resident status in the United States, things get a bit more complicated because the applicable American probate law may subject the entire estate to American law while the German law subjects all of the estate to German law. Even more complicated could be cases where the decedent had dual citizenship from birth. Finally, the cases involving persons of German citizenship who acquired American citizenship and retained German citizenship raise complex conflicts of laws issues. They can be resolved, but heirs and administrators need to be aware of them from the beginning because important deadlines relate to each particular set of circumstances.

That is true also where the decedent had only American citizenship but acquired residence status in Germany. The person may have become a resident in Germany for probate purposes, often after moving there, dissolving the household in the United States and establishing all important societal relationships in Germany while losing or relinquishing them in the United States.

Then, there are Americans who die in Germany after establishing legal residence there, for instance by registration for the public records, Meldeamt, with the intent of living there only temporarily and whose connection with America remains strong. Those factors influence the decisions required to determine the appropriate tax compliance on both sides of the Atlantic as well as the type of probate proceedings needed to get hold of assets from abroad.

For instance, in some cases, the certificate of inheritance, Erbschein, or letters of administration, Testamentsvollstreckerzeugnis, needed under German law to recover funds from German bank accounts may be limited, gegenständlich beschränkt, to the German assets while the principal probate matter is handled before an American probate court.

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