If you live, own property, or hold assets in Germany, the rules deciding who inherits and how much tax is paid can feel unfamiliar. With a little planning, most foreigners can shape these outcomes clearly and avoid surprises for the people they leave behind.
How German succession law affects foreigners
German inheritance law differs from the common-law systems many expats grew up with. Two features tend to surprise newcomers.
The first is universal succession: when someone dies, their estate passes as a whole to the heirs, who step into the deceased's legal position, including any debts. There is usually no separate executor administering the estate the way there often is in England or the United States.
The second is forced heirship, known as the compulsory portion (Pflichtteil). Close family members, typically children, a spouse, and in some cases parents, are generally entitled to a minimum share of the estate even if a will tries to exclude them. As a rule you cannot simply disinherit close family completely under German law. This makes it important to understand which law applies to your estate before assuming your home-country expectations carry over.
The EU Succession Regulation and which law applies
For deaths from August 2015 onward, the EU Succession Regulation (often called Brussels IV, Regulation 650/2012) governs which country's law applies to a cross-border estate across most of the EU. Germany takes part in it.
The general default rule is that succession is governed by the law of the country where the deceased had their habitual residence at the time of death. So an expat living in Germany would, by default, have German succession law applied to their worldwide estate, rather than the law of their original home country.
The Regulation also allows a choice of law. You can usually elect, in your will, for the law of a country whose nationality you hold to govern your succession instead. For example, a British or Irish national habitually resident in Germany may be able to choose their national law.
Some important limits
- The Regulation covers which succession law applies; it does not harmonise inheritance tax. Tax is dealt with separately, so German tax may still apply even where another country's succession law governs the estate.
- Ireland and Denmark are not bound by the Regulation, and the United Kingdom never opted in, which can add complexity for nationals of those countries.
- Whether and how a choice of law works in your situation depends on your nationality and the facts. These rules are technical and can change over time, so confirm the current position with a lawyer.
German inheritance tax in general terms
Germany levies an inheritance and gift tax (Erbschaft- und Schenkungsteuer). Importantly, the tax can attach if either the deceased or the heir is resident in Germany, or where German-situated assets such as real estate are involved, even for non-residents.
The system works through tax classes and personal allowances based on the relationship between the deceased and the heir. As a general pattern:
- Spouses and registered partners tend to receive the most generous tax-free allowance and the lowest rates.
- Children and stepchildren generally receive a substantial allowance.
- More distant relatives and unrelated heirs, such as friends or unmarried partners, usually receive much smaller allowances and face higher rates.
Rates rise progressively with the value inherited and are higher for distant or unrelated heirs. There are also specific reliefs, for example for the family home and certain business assets, subject to conditions.
Exact allowance figures and rate bands change over time and depend heavily on your circumstances. Treat any numbers you read online as approximate, and confirm current thresholds with a qualified adviser before relying on them.
Watch for double taxation
If you or your heirs have ties to more than one country, the same inheritance could be taxed in two places. Germany has only a limited number of inheritance-tax treaties, though domestic credit rules may reduce double taxation in some cases. Cross-border estates deserve specific advice on this point.
Wills covering German assets
Making a clear will is the single most useful step for most foreigners with a connection to Germany.
German law recognises certain will formats, including a fully handwritten will (entirely written and signed by hand) and a notarial will made before a German notary. A notarial will costs more but can reduce formal-validity risks and simplify later administration.
Key points to consider:
- One will or two? If you hold assets in several countries, decide carefully whether to use a single worldwide will or separate wills per country. Poorly coordinated wills can accidentally revoke one another.
- Choice of law. If you want your national law to apply rather than German law, that election generally needs to be expressed in the will itself.
- Compulsory portion. Plan around the Pflichtteil rather than assuming you can freely disinherit close family.
- Practical access. Think about language, where the will is stored, and whether the German central register of wills should be used so the document is actually found.
Couples should also be aware that the joint "Berlin will" is popular in Germany but carries its own tax and flexibility trade-offs, which are worth discussing before adopting it.
A few words before you act
Cross-border inheritance brings together succession law, tax, and the formalities of more than one country, and the details shift as laws and figures are updated. This guide is general information, not advice for your particular situation. Before making or changing a will, choosing the law to govern your estate, or planning around German inheritance tax, it is well worth speaking with a qualified local lawyer, ideally one experienced in cross-border estates, who can confirm the current rules and tailor them to your circumstances.