German Inheritance Law: Avoiding Liability for Debts

Understanding the Inheritance of Debt in Germany

In Germany, when someone passes away, their estate — including assets and debts — is inherited by their heirs. However, heirs have the right to reject the inheritance within six weeks if they wish to avoid inheriting any liabilities.

Legal Framework and Limitations of Liability

The administration of estates and inheritance law in Germany is governed by the German Civil Code (BGB). According to the BGB, heirs are only liable for the debts of the deceased to the extent of the inherited assets. This means that heirs cannot be held personally responsible for debts that exceed the value of the inheritance.

Avoiding Inheritance of Debt

Heirs who wish to avoid inheriting debts can do so by rejecting the inheritance within six weeks of becoming aware of it. This can be done by filing a formal renunciation with the probate court.

Options for Limiting Liability

In some cases, it may not be possible or desirable to reject an inheritance entirely. In such situations, heirs have several options for limiting their liability:

• Inventory of Assets: An inventory of the deceased's assets and debts can help heirs determine the value of the inheritance and make an informed decision about whether or not to accept it.
• Limited Acceptance: Heirs can accept the inheritance with a limitation of liability, which means that they will only be liable for the debts of the deceased up to the value of the inherited assets.
• Insolvency Proceedings: In cases where the debts exceed the value of the inheritance, heirs may choose to initiate insolvency proceedings for the deceased's estate. This will discharge any remaining debts, but it may also affect the distribution of assets among creditors.

Conclusion

Understanding the laws surrounding inheritance of debt in Germany is crucial for heirs in order to make informed decisions that protect their financial interests. By knowing their rights and options, heirs can avoid inheriting excessive liabilities and navigate the probate process successfully.