Social binding: What is it anyway?

For housing construction, social binding means that low-cost housing is subsidized by public funds. This means that there are low-interest loans or subsidies for investors in exchange for committing to affordable rents. The catch? Only people with a housing entitlement certificate are allowed to rent these apartments.

• Affordable housing through public funding
• Very good conditions for loans or grants
• Rent for persons with a certificate of eligibility for housing

Rebinding

Buyers are tied to social housing until the public loans have been repaid. However, due to the post-commitment period, one has to wait 10 more years after repayment until the social commitment ends.

• Commitment to social housing until loan is repaid

Limited rent

The cost rent slows down the maximum rental price of the apartments. The housing construction is therefore price-linked, which guarantees that only the cost rent can be demanded from the tenants. The rent may be increased in this period only every 3 years, according to the consumer price index.

• Maximum rental price limited by “cost rent

Social bond summarized

Here again everything you need to know about social binding!

• Affordable housing through public funding
• Very good conditions for loans or grants
• Obligation to rent to low-income persons
• Maximum rental price limited by “cost rent
• Post-commitment period ends only 10 years after full repayment of public loans

The next step: equity

Regardless of whether it is for personal use or as a capital investment, the first thing to think about for any type of real estate is the financing. Here, equity capital is an important topic, from the use of equity capital to the difference due to tax deductibility of the interest on the loan. The big question here is, how much equity do you need if you include all costs from the purchase price to the ancillary purchase costs? Here you will learn everything about financing and equity.

Hiring a tax advisor: 3 mistakes

In our great overview on the subject of tax advisors, the recommendations for many cities, for good tax advisors in the area, the tax advisor costs everything on the subject of starting a company and possible legal forms; taxes are so important for entrepreneurs that today we once again focus on the tax advisor choice. Because, especially the selection of the tax advisor is a central factor, for the success of your company. Before we look at the 3 mistakes in detail, here is an overview for you.

Assign risks to the tax advisor:

1. Intensive, regular cooperation; means commitment and time for tax consultant changes
2. Amount of monthly and additional costs; money missing for reinvestment
3. In the long term: lose money (pay too much tax, plus costs for tax advisor, lack of reinvestment) due to lack of qualitative / quantitative advice

Source: Lukinski.de, article tax consultant for enterprises

Let’s look at each of the commissioning risk factors.

Communication and bonding – risk number 1

First of all, a risk factor that is not directly related to the topic of “losing money” or “costs for the tax advisor”. It’s the regular, intensive relationship you have with your tax advisor. While most business relationships are relatively irregular, you’ll need to talk to your own tax advisor for many, recurring transactions in the. Whether it’s levies, consultations or queries.

If you don’t feel absolutely comfortable during the first meeting, or if you are not on the same wavelength, then you should refrain from working together. That is why it is so important to compare tax advisors, through recommendations from experienced entrepreneur friends or through initial discussions with different tax advisors. Also important so you have different quotes in front of you. How often you will communicate, you can already see by the weekly to annual meetings, even if only digitally.

Deadlines for submission of accounts, wages and annual financial statements

Regular communication includes, for example:

• Monthly submission of the accounts, by the 10th of the following month (deadline at the tax office)
• Wages and salaries, as of the 15th of the month
• …
• Financial statements

As an entrepreneurial person, you are in constant contact with the tax office. Therefore, you should also look for people with whom you, as described, are on the same wavelength. If it quickly comes to disagreements and disputes, the share of communication decreases and so you come to risk number 3: The lack of tax advice.

At the same time, you’re just as reluctant to make contact and won’t ask some questions you would have asked an accountant you trust.

So in addition to all the facts and figures, the personal level also plays a role.

Change of tax advisor: When mistakes add up

Already by the above points you have seen how in your company is connected with the tax adviser. Accordingly, a change is not possible overnight, it must be well prepared. You need to find a new firm that will take you on as a client. Especially good law firms check if they want to work with a client. The new tax advisor must then, as immediately start working for a smooth transition, for example, if you have a dispute with your old tax advisor.

So the commitment is relatively long-term, until you notice mistakes (we’ll get to that in a moment) and find time to change tax advisors in addition to the day-to-day business of your company. But don’t worry, if you find someone who accepts you as a client, the change is made relatively quickly, from the first conversation to the start is maybe 7 to 14 days.

Thanks to digital accounting, the change of tax advisor is possible within 24 hours if the mandate is accepted by a law firm.

Monthly, too high cost burden – risk number 2

Of course, tax consultants don’t work for free. When you look at the costs of a tax consultant, you also look at two values.

Cost factors: 1) Regular and 2) Additional services

Cost factor 1: Regular services – The basics, i.e. your bookkeeping and financial accounting, are usually calculated according to the value in use. Value in use means that the monthly amount of the costs is based on the amount of your turnover. The more turnover you make, the more you pay. The fees are calculated according to an official scale of fees. In addition, tax consultants have a small margin, up and down.

This means you pay a fixed value depending on how much revenue you make. Nevertheless, offers from different tax advisors can differ, as they have a percentage margin.

Cost factor 2: Additional services – In addition to your monthly basic costs, there are also additional services, for example consulting, but also the annual financial statement is charged extra. Here lies the risk factor, how much consulting is good, how much is bad for you and your company? There is no general answer to this question. Because, depending on how much previous commercial knowledge and also interest you bring yourself, ideally only 1 or 2 hours a month. Consultation means already inquiries here. Just about every minute is billed. If your tax advisor talks to you on the phone for 10 minutes, then an employee has to be informed (5 minutes), another 20 minutes of documents are procured, a decision is made and a call is made back – already 1 hour of additional effort has arisen, for one question. At 120 euros / hour, quickly a relevant topic for young companies.

So you have two cost factors and especially the additional services can quickly add up. If you use a lot of consulting, which many founders do, then every minute is charged. If you take an hourly rate of 120 Euros as a basis and only 1 additional hour per week, 4 hours of additional consulting (one appointment or distributed) will cost you 600 Euros. As a large limited liability company, this may not be a problem, but especially at the beginning, in the start-up phase, this is a lot of money.

Example calculation: Extra costs due to consulting

Here again in quick and simple summary, the calculation of the additional costs, by consulting service.

• Hourly rate tax consultant: 120 Euro
• Additional effort / week: 1 hour
• Monthly extra costs: + 600 Euro
• Annual extra costs: + 7.200 Euro

If a GmbH was founded with 25,000 Euro starting capital, an item of 28.8% of the equity capital, in addition to the costs for regular accounting.

Advice is important, but pay attention to dotted questions and be prepared, for example by doing your own research, this saves time

Dubious tax consultants? Too much advice

If you have a less reputable tax advisor and regularly 10, 12 or even 15 hours extra per month, which at first doesn’t sound like much, over the whole month, the risk quickly becomes a danger. This brings us to risk 3, the consequence: losing money due to too much overhead and taxes.

Losing money through bad / no advice – Risk 3

Through lack of communication (risk 1), too high fees for too much advice (risk 2) or even lack of knowledge, you lose money to reinvest and further tax benefits.

Too much paid money, tax benefits, you can no longer claim afterwards / partly costly, that’s why it is so important to have a good advisor at his side.

The tax advisor training is relatively simple, it is not a long, state training or a study, the training to the tax advisor makes one in a course, with subsequent examination. By and large, it is about the administration of taxes, not about the design of taxes.

Full-time training lasts (only) 2 months

No one learns the intricacies in the tax system in 2 months, it’s more about filing monthly and yearly correctly.

Many tax consultants also pass on their work to employees who then show little interest in the individual clients, for example because these employees are overloaded with tasks. Accordingly, the work is processed, that is, managed again, not designed. If you hire a tax advisor who does not attach much importance to communication, especially in terms of tax advice, you will quickly lose a lot of money, starting with tax allowances and ending with tax structuring for different legal forms.

Hiring a tax advisor: mistakes + 3 tips

Let’s summarize the four key risks again:

1. Intensive, regular cooperation; means commitment and time for tax consultant changes
2. Amount of monthly and additional costs; money missing for reinvestment
3. In the long term: lose money (pay too much tax, plus costs for tax advisor, lack of reinvestment) due to lack of qualitative / quantitative advice

Source: Lukinski.de, tax consultant for companies

This leads to the following question, how do you find a good tax accountant?

Find a tax advisor: 3 tips

Do I have to hire a tax consultant? What tasks does a tax consultant perform? How much does a tax consultant cost? Here you will find the answers to your questions and much more information on the subject of tax consultants in the area, finding tax consultants, costs, tasks, financial accounting, annual financial statements and taxes in general – but let’s start at the beginning.

• Find a tax advisor: 3 tips

Tax consultant in the vicinity

Nearby Tax Accountants – Find a good tax accountant near you? We have searched the internet for you for days to find the best recommendations for tax consultants in your area: Hamburg, Berlin, Cologne, Dusseldorf, Munich, Stuttgart & Co. for your private tax return or income tax return or more complex accounting for companies, from monthly financial accounting to annual financial statements. Including adresses, telephone numbers and website.

• Tax consultant in the vicinity

Tax return: tips and tricks to avoid mistakes

Here you’ll find everything you need to know about filing taxes in the most popular and helpful videos and publications. Whether it’s instructions or tips and tricks on how to save even more, we have a video to answer every question.

Tip! Overview Taxes XXL

Taxes are often a vexing topic, especially in Germany. Wage tax, value added tax, real estate transfer tax and much more: it is not easy to keep track of everything. But if you’re not interested in employing a tax consultant, who can be quite expensive, you need to get to grips with the subject of taxes. We want to help you with that! Here you will find an overview of guides as well as book and video tips on the subject of taxes. Whether we introduce you to individual types of German taxes or you watch a video on the subject of tax returns, all your questions about German taxes will be answered here.

• Book & Video Tips Overview: Taxes

Find a tax consultant: near you

Are you still looking for the right tax advisor in your area? Then take a look at our lists: We have compiled the best-rated tax consultants for you for almost every city in Germany, where you should always receive good advice. You can find more information about tax advisors in your area here.

Why do a tax return?

What is the difference between gross and net? Why does one do a tax return? Why is a dog more expensive in the city than in the country? What types of taxes are there? The next video will answer all these questions and more.

The income tax

Once a year, the income tax return is due for entrepreneurs. In this video, you’ll learn the best way to do this and how to prepare it correctly.
– What is the income tax return?
– What is the difference between income tax and payroll tax?
– What are the deadlines for income tax?
– What are the basic principles of income tax?
– What are deductible business expenses for business owners?
– How can you calculate the amount of income tax?
– What help is there for the income tax return?

Do your own tax return

You want to make a tax return, save yourself unnecessary effort and get tips for whom a tax return is worthwhile, what you should pay attention to, what deadlines there are and what documents you need at all? all this and more, you will learn in this – so good luck!

Complete one’s tax return

Is it really possible to do and complete a tax return in under 15 minutes? The following video shows you how easy it is to fill out a tax return.

Free contributions and lump sums

Saving taxes can sometimes be so easy if you know the right lump sums and tax allowances and that’s exactly why we show you the most important ones so that your tax return is a real success and you get as much as possible back from the tax office!

Tips and tricks

Not done your tax return yet? Then get going! We’ll show you how you can save up to 1,000 euros with simple tips. And don’t worry: the tips are very simple and can be implemented quickly.

6 completely legal tax tricks with practical examples

How can you legally deduct a lot of money from your taxes? It’s simple: watch the following video and follow the six legal tax tricks.

Tax return error

There are many things you can do wrong in a tax return and the bad thing is, usually each of these mistakes costs you money or you can even be held liable for it – which 8 mistakes are the most common and how to avoid them, we show in this video. Unfortunately, taxes and tax returns barely feature in our education system and this is despite the fact that they affect us all in some way. Because of this, there are many mistakes that are made over and over again. Some of these mistakes are common and that’s what we want to change.

Late tax return: consequences and penalties

The 31.07. of a year is now the deadline for submitting the tax return for all those who are obliged to submit. But not always everything goes according to plan in life and villeicht still missing documents, the accounting is not ready or you just have not found the time for it – what consequences this can have and what you can do before, you learn in this video! The good news first…. Because the mentioned deadline is actually only valid for all those who have to file – those who belong to the larger group of people who file voluntarily even have four whole calendar years retroactively!

Doing your tax return correctly as a student

A tax return as a student? That can really pay off! Even if you don’t have a job yet. The video explains how it works and what all the stuff about “tax deductions”, loss carry-forward, income-related expenses or special expenses means.

Tax return student: tutorial

A tax return can be worthwhile for many people, but one group can get particularly high tax benefits, namely students. In the years of study, sometimes several thousand euros in expenses come together. But a large part of the costs are tax deductible and a student can in many cases get a decent amount refunded by the tax office in the context of his tax return.

Seminars for students on the subject of tax returns

I’m sure you’ve all seen them: those ads for tax courses that promise you that you can get a lot of money back from your studies. Keyword: Tax return for students. What is it all about? A quick search online has already revealed: Behind the courses is the financial service provider MLP. So why is a private company offering free courses on how to get your taxes back from your studies?

Tax return for self-employed and small businesses

A tax return is already a closed book for most employees … but for self-employed people in particular, there are a few more challenges and questions. Many small business owners and self-employed people rightly ask themselves things like:

• When do I have to file a tax return?
• What documents do I need for a tax return?
• What is the structure of a tax return for the self-employed ?
• Does it make sense to file a tax return as a small business owner?
• You can find the answers in the video: Introduction tax return self-employed and small business

Tax return: small business

Finally relief and more tax benefits for small business owners – this was the news at the beginning of 2020 – and as so often with changes in the law, this must first be proven in practice – in this video we explain to you how the small business regulation has improved this year and how you can benefit from it.

Tax return for pensioners

More and more pensioners in Germany have to file a tax return. There are some important points to consider, which are, you will learn in this video. Due to legal changes, the number of pensioners who have to file a tax return is growing – many are not even aware of this. In addition, more and more pensioners are also working part-time and earning money as a result, which means they may be paying tax, some of which they can reclaim. The two main points of tax for pensioners are: The basic allowance and the pension allowance. What these two allowances mean and how they affect the tax return as a pensioner is explained in this video.

Tax return pensioner: instructions

Especially for people who have not yet made a tax return during their working life and now have to dedicate themselves to this task for the first time as a pensioner, this is particularly difficult. But even experienced pensioners have to consider a few points when filing their tax return. With the right information, however, you can save yourself a lot of time – which is why we would like to provide this brief guide.

Tax return for young professionals

It pays to file a tax return. On average, employees get around 1,000 euros back when they file a tax return. Our video shows how easy it is for young professionals to get money back from the tax office with their first tax return.

Related Links about the topic Taxes & Financing

You haven’t learned enough yet? We have covered many areas around the topic of tax return and Co. for you with our video tips. For example, areas such as: Real Estate Financing, Renting Property, Finding the Right Realtor, Passive Income through Real Estate and much more. Take a look around and become a real estate professional!

Real estate financing explained

You want to buy a property but don’t know how to finance your dream? Terms like loan, interest, credit, repayment or building society contract only raise more questions for you? Here you will find all the important information on the subject of real estate financing: from financing with equity to financing without equity to applying for a loan, we cover all the important topics!

• Video tips on the subject of real estate financing
• Book recommendations on the subject of real estate financing

Buy property

With our book and video list on buying real estate, you can’t go wrong with your next real estate purchase. Our book tips cover all topics from the right inspection to the closing and the possible resale. What do you have to pay attention to? How do you finance your purchase? How do you evaluate a property? And how do you conclude the contract? You will find the answers here.

• Video tips on buying real estate
• Book recommendations on the subject of buying real estate

Successful investing

Successful investing is a dream of many people. But unfortunately, it is not as easy as it seems. How can you start as a beginner in the investment industry? What do you have to consider and which mistakes should you try to avoid? What is worth investing in? And what does the term “investment” mean anyway? We present you the best books on the subject of investment!

• Video tips on the subject of investment
• Book recommendations on the subject of investment

Back to overview Taxes XXL: Tax return, tips & more

Here you can return to the overview of book and video recommendations on the subject of taxes in Germany. Tax forms, tax rates, tax returns and much more will be explained to you by experts and made understandable. In this XXL guide you will find information and articles on the most diverse questions on the subject of taxes.

• Book & Video Tips Overview: Taxes

The inheritance – will, inheritance tax and the compulsory portion

Without a will, the estate is distributed according to the rules of intestate succession. However, this is not always in the best interests of the testator. If a will exists, the assets can be distributed in a different way than the law provides for and persons not related by blood can also inherit. The creation of a will is therefore not only important to regulate the last will exactly, but also to avoid disputes in the family. Find out everything about wills and inheritance from the experts at IHV.

Bequeathing correctly during your lifetime – wills and the legal consequences

Without a will, the estate is distributed according to the rules of intestate succession. However, this is not always in the best interests of the testator. If a will exists, the assets can be distributed in a different way than the law provides for and persons not related by blood can also inherit. The creation of a will is therefore not only important to regulate the last will exactly, but also to avoid disputes in the family.

A will overrides intestate succession and can thus establish a new succession. Who is to inherit is determined by the testator. If more than one person is named, the assets are usually divided according to quotas. Writing a will also gives the testator the option of leaving individual things to certain people, for example a car, jewellery or property. However, these are not legally considered an inheritance, but a legacy. In order to avoid disputes about the estate, the estate can be distributed in a will in such a way that no disputes can arise.

If there is no will and a property is part of the estate, it becomes the property of the heirs. In most cases, a community of heirs is formed in which no one can dispose of the inheritance alone. When selling such a property, all heirs must agree. This fact can often lead to disputes within the community of heirs. In addition, the costs incurred for a notarial will are usually only half as low as the costs for a certificate of inheritance procedure that the heirs face if no will exists. In the will, the last will over the property can be regulated exactly and disputes and superfluous costs are saved for all involved.

Pre-heir and post-heir – tasks, duties and rights

The testator is free to determine the heirs and can therefore transfer his property to several persons in a temporal displacement. Accordingly, the subsequent heir receives his inheritance only after another person, in this case the previous heir, has inherited. The testator can, for example, choose an occasion or a time for the succession to occur, such as coming of age or passing the master’s examination.
The previous and subsequent heirs are both legal successors of the deceased, but do not form a community of heirs in which they would inherit at the same time, but rather inherit at staggered times due to the deceased’s instigation. The subsequent heir has an expectant right to the succession, and therefore, when the succession occurs, the inheritance of the previous heir is forfeited, the latter ceases to be an heir, and the inheritance accrues to the subsequent heir. In the event that the subsequent heir is already deceased at the time of the succession, the testator should take precautions and name further subsequent heirs.

The pre-heirs are also referred to as ‘temporary heirs’. Depending on the interpretation of the will, the pre-heirs only have certain powers of disposal over the estate and are therefore quite limited in what they can do. In addition, inheritance tax always falls on the pre-heirs at the beginning, as only they are legally named as heirs and thus bear the tax consequences.

Inheritance allowances – Inheritance taxes and gifts

In order to protect the heirs from a large financial burden, different tax rates and allowances apply depending on the degree of relationship. These allowances include various things that do not have to be taxed, so that the heirs do not have to pay the most as taxes, especially in the case of a large estate.
Pension allowances are payable if the partner or children were dependent on the financial support of the deceased. For spouses, the pension allowance is €256,000 provided the surviving spouse does not have a widow’s pension or occupational pension that is not subject to inheritance tax. For children, pension allowances apply which are staggered according to the age of the child at the time of death. Infants up to the age of 5 are entitled to a pension allowance of 52,000 euros. Starting from this point, the pension allowance decreases by approximately 10,000 euros every five years. Children aged 20 to 27 can therefore claim a pension allowance of 10,300 euros, but these allowances are only relevant if the children do not have their own pension payments, such as an orphan’s pension.

The other allowances, in addition to the pension allowances, are regulated according to the degree of relationship and are independent of existing survivors’ pensions or own assets. Accordingly, spouses and registered partners inherit an allowance of 500,000 euros. Children of the deceased or grandchildren of the deceased, if their parents die before the inheritance, can claim an allowance of 400,000 euros. Grandchildren whose parents are still alive can claim an allowance of 200,000 euros. Great-grandchildren or the deceased’s own parents are entitled to an allowance of 100,000 euros. All other heirs can claim tax allowances of 20,000 euros. To ensure that as little tax as possible has to be paid on inheritance, the testator can make important decisions long before death and specify them in the will.

Inheritance tax and gifts – all important information

Inheritance tax and gift tax are closely linked. Almost the same allowances apply as in the case of inheritance, however, the gift allowances may only be left tax-free once in ten years. Testators who wish to reduce the inheritance tax for their heirs must therefore start gifting their assets ten years before their death. In the case of patchwork families, this rule means that it can make sense to adopt the spouse’s children in order to bring the tax-free amounts into line with those of the biological children. The adoption does not affect the succession to the other biological parent.

In addition to tax-free allowances, there are also goods that are tax-free. For close relatives in tax class I, movable assets such as household effects or similar objects of daily use are tax-exempt if they do not exceed a value of 42,000 euros. For all other heirs, a value of 12,000 euros applies here. If works of art, archives or libraries are part of the estate, they are generally exempt from tax at a rate of 60 percent. If the estate includes a building in which one of the heirs lives, this can also be exempt from tax.

The compulsory part of the inheritance – disinheritance, will and inheritance contract

In principle, everyone is free to decide whom to appoint as heir and whom to disinherit. The testator does not have to justify in his will why he excludes a relative from the succession. However, an exclusion does not mean that the heir receives nothing, because every heir has a claim to a compulsory portion. This claim must be requested by the heir himself, because the certificate of inheritance does not record these compulsory portion claims. If a testator designates a person as sole heir, this means on the one hand that this person alone inherits the entire estate, but also that no one else should inherit who would actually be entitled to inherit.

Married couples can jointly disinherit close relatives in an inheritance contract or a Berlin will. In a classic form of the Berlin will, the spouses stipulate that the longer-living partner will be the sole heir and that the children will only inherit when both spouses have died. Thus, the parents disinherit their children until both are deceased. If someone is disinherited, the part of the inheritance that would have gone to this heir goes to the person who would have become the heir if the disinherited person had already died at the time of the inheritance.

Settling the inheritance – communities of heirs and intestate succession

Ideally, the heirs of a community of heirs would pay any debts swiftly from the estate and then dissolve the community of heirs by distributing the surplus according to shares. However, this is often not the reality. Disputes within the community of heirs often ensure that they remain unresolved for years after the inheritance. Each member of such a community of heirs has the right to demand dissolution at any time, even without good cause.
In order for a community of heirs to be dissolved without disputes, it is advisable to follow certain steps. From the correct valuation of the estate to inheritance taxes, there are important formalities to observe.

• Determine the estate

  Until the estate has been determined, a community of heirs cannot be divided. The heirs receive most of the information from the bank where the deceased had the accounts or deposits. In order to gain access to these, a certificate of inheritance or a will with a court opening protocol is required. However, debts are also part of the estate. In order to determine the estate completely, the debts and the assets should be compared and reconciled.

• Pay the debts of the estate

  The debts of the estate can be paid by the heirs of the community of heirs from the estate. It is not uncommon for items belonging to the estate to have to be sold for this purpose, such as real estate or land.

• The gifts and donations take into account

  If an heir has received gifts or donations from the deceased during his or her lifetime, these may be subject to equalisation. The gifts that are subject to equalisation increase the estate arithmetically and are deducted from the inheritance quota of the donee. Each heir can request information from the others about such gifts so that they are correctly taken into account.

• Sell the indivisible items

  If a true division is not possible for certain items, such as a property in the community of heirs, the heirs may have to sell this item or have it foreclosed. In order to do this, a realistic sales price must first be determined. If no agreement can be reached here, a partition auction can be initiated by one of the heirs.

• Distribute the divisible objects

  The inheritance is to be divided in the first place in nature by the heirs. Each heir can therefore take items for himself from the estate in agreement with the other heirs. Money and securities can be divided by the community of heirs according to their respective shares.

• The care services take into account

  If a child has cared for the deceased parent without consideration during his or her lifetime, compensation may be claimed for this. This must be appropriate to the duration, scope and value of the estate.

• The notary helps

  If an agreement cannot be reached, a notary can be called in by the community of heirs. This mediates between the heirs in order to reach an agreement as quickly as possible. However, it should be borne in mind that such assistance is associated with some costs.

• Consider the tax office

  Inheritance tax is always payable on an inheritance. However, some things from the estate can be deducted from the tax, such as the costs of the funeral or fees for the opening of the will.

The legal succession – this is how you inherit according to law

Legal succession regulates both the order of heirs and the individual amounts that are inherited. First the closest relatives, such as children and grandchildren, inherit and then the more distant relatives, such as nephews and nieces. Closer relatives generally exclude the more distant relatives from inheritance. The proportion to which the individual heirs inherit is documented in the certificate of inheritance. The legal succession is based on the Parantel – or order system. It divides the relatives into different orders. Accordingly, children and grandchildren of the deceased belong to the first order. Parents, siblings, nieces and nephews of the testator are assigned to the second order. The third order includes grandparents, uncles and aunts as well as cousins of the deceased. Spouses and registered partners are not considered relatives, but have the right of inheritance as spouses. This gives them a special status and limits the right of relatives to inherit. Relatives of the preceding order always exclude relatives of a subsequent order from the succession.

Learn more about intestate succession!

The partition auction in communities of heirs – the costs and the procedure

Objects such as real estate or land often give rise to disputes in communities of heirs. The ideas of how to proceed with the common property are too different and the participants cannot agree. Every heir has the right to demand a partition of the community of heirs at any time and thus to force its dissolution. In such a case, a partition auction can be the last resort to settle the disputes and dissolve the community of heirs.

Heirs without a will – depending on the degree of relationship

Although the spouse or registered partner is not considered a relative in the legal succession, he or she has a special position. If the deceased leaves both a spouse and children, the spouse inherits half of the estate and the children the other half. However, if there are more than three children, the spouse receives only one-fourth and the children divide the remainder among themselves. If there are only second-order relatives or grandparents, the spouse receives half of the estate and the second- and third-order relatives share the other half. If there are no relatives of the first, second or third order, the spouse inherits everything.

Heirs of the first order – children and grandchildren

The first order includes the children and grandchildren of the deceased. Non-marital children born after 1 July 1949 are also entitled to inherit. If a child of the deceased and the spouse are living at the time of death, both inherit half. If several children are living, the inheritance is divided between them and the spouse. If children of the deceased are already deceased, the grandchildren inherit.
Explained by example: If the deceased leaves his mother, his spouse, 2 children with two grandchildren each and a deceased child with one grandchild, the following succession results. The mother is not entitled to inherit because she belongs to the second order and there are heirs of the first order. The spouse and the two living children inherit in equal shares. The grandchild of the deceased child takes the place of the parent in the succession and thus inherits in equal shares with the two living children and the spouse. The grandchildren of the living children also do not inherit.

Heirs of the second order – parents and siblings

If there are no children or grandchildren, the heirs of the second order. The second order includes parents, siblings, nephews and nieces. If both parents of the deceased are alive at the time of death, the estate is divided in half. However, if one parent is already deceased, the descendants of this parent, i.e. siblings or nieces and nephews of the deceased, take their place.
Explained by example: The testator leaves his mother, a sister with two children, a nephew of the deceased brother and a half-sister from the father’s second marriage. The inheritance is therefore distributed as follows: One half of the estate goes to the mother’s line and the other to the father’s line. Since the mother is still alive, she receives half of the inheritance. Since the father is already deceased, his inheritance falls to his children. In this case, to the sister, the deceased brother and thus to the nephew of the deceased and to the half-sister from the second marriage. These three divide the other half of the inheritance. The children of the still living sister do not inherit.

Heirs third order – grandparents and aunts / uncles

If the deceased leaves only heirs of the third order, the inheritance is divided as follows. The inheritance of the deceased falls to the grandparents and their descendants. If a grandparent has already died, the inheritance also falls to the aunts, uncles, cousins of the deceased.
Explained by example: If the testator leaves only his grandmother and an aunt with two children, they inherit as follows. The grandmother receives half of the estate. Since the grandfather is already deceased, his descendants inherit his share. In this case, therefore, the aunt inherits the other half of the estate. However, the two children do not inherit.

Inherit debts – form and deadlines

To disclaim the inheritance requires some rules. Simply notifying the family or simply having no reaction to the inheritance is not enough. The form is very crucial. The heir must make a disclaimer to the probate court either in the form of a transcript or in a publicly notarized form. However, a simple letter is not sufficient. A personal appearance before the probate court is also possible. There, the heir explains his or her request and a judicial officer records it in writing. The local court in whose district the deceased had his or her last residence is responsible in each case. However, not only the form is very decisive for the success of the disclaimer, but also the content and the deadline of the declaration. This must clearly state why the inheritance does not want to be accepted. The reasons should be clearly listed. These may include, for example, that the estate consists mainly of debts.

The declaration is subject to a so-called six-week period. If the inheritance does not wish to be accepted, the relevant declaration must be submitted to the competent probate court within six weeks, otherwise the inheritance is deemed to have been accepted.
Generally speaking, the probate court does not have a duty to bring. The heirs are only notified of the inheritance if there is a will or if they succeed to the inheritance because, for example, someone else has already disclaimed the inheritance. In all other cases, the heirs are assumed to know whether or not they inherit anything from a deceased family member.

More on inheriting debt!

The inheritance – the deadlines, costs and most important information

The inheritance does not always hold only good things in store for the descendants. Even if many dream of riches and expensive jewellery, debts or dilapidated real estate can also be part of the estate. In such cases, it is possible to disclaim the inheritance within a certain period of time and in accordance with certain criteria.

To disclaim the inheritance requires some rules. Simply notifying the family or simply having no reaction to the inheritance is not enough. The form is very crucial. The heir must make a disclaimer to the probate court either in the form of a transcript or in a publicly notarized form. However, a simple letter is not sufficient. A personal appearance before the probate court is also possible. There, the heir explains his or her request and a judicial officer records it in writing. The local court in whose district the deceased had his or her last residence is responsible. If the deceased is German, but had his residence abroad, the Berlin-Schöneberg Local Court is responsible. In Baden-Württemberg there is a special regulation. In this federal state, the state notary’s office is your contact.

However, not only the form is very decisive for the success of the disclaimer, but also the content and the deadline of the declaration. This must have clearly listed why the inheritance does not want to be accepted. The reasons should be clearly listed. These may include, for example, that the estate consists mainly of debts. The declaration is subject to a so-called six-week period. If the heir does not wish to accept the inheritance, the relevant declaration must be submitted to the competent probate court within six weeks, otherwise the inheritance is deemed to have been accepted. The cut-off date is assumed to be the day on which you learned of the inheritance, which usually coincides with the day of death. The deadline is only extended in certain exceptional cases. For example, if the deceased or the heir himself is abroad at the time of death, the six-week deadline can be postponed.