Managing the inheritance until division – a challenge (D/E/F)

• Inheritance Law
• Private Clients

There are various ways to encourage adequate management of the inheritance. The uncertain period between the death of the testator and the division of the inheritance must be taken into account in inheritance planning.

Upon the death of the testator, all rights and obligations are transferred to the heirs. However, the rights and obligations are not transferred directly to individual heirs, but to all heirs together; this is called a community of heirs. The community of heirs is dissolved either by the heirs by means of a partition agreement or by a court decision. Several months or even years can pass between the death of the testator and the dissolution of the community of heirs.

The community of heirs can only dispose of the inheritance jointly. A unanimous resolution is required for each act. Unanimity is also required if there are obvious conflicts of interest.

The requirements of exclusively joint action and the mandatory unanimity make the community of heirs cumbersome. If the heirs do not agree on the administration of the inheritance, there is even the threat of a blockade.

There are various ways of ensuring that the estate is administered so that the heirs are relieved in the difficult period following the death of the testator.

For example, the testator can ‘exclude’ from the community of heirs from the outset certain potential heirs who could place an excessive burden or even obstruct the administration. The excluded heirs are nevertheless entitled to their inheritance or at least their compulsory portions.

The testator can also appoint an executor. When choosing an executor, care must be taken to ensure that he or she can bring about a professional settlement. This requires both legal and business management knowledge. Ideally, the executor knows how to collect the heirs on a factual level and with human competence.

If no execution of the will has been ordered, all heirs together can grant someone power of attorney to act on behalf of the community of heirs. However, each heir can withdraw his consent at any time, which would render the power of attorney invalid. This procedure is therefore only possible if there is unanimity.

If the inheritance is blocked or the administration and preservation of the inheritance is not possible, each heir can apply to the Inheritance Office for the appointment of a so-called heir’s representative. The heir’s representative is authorised to act on behalf of the community of heirs. The community of heirs can no longer act if a representative has been appointed. The heir’s representative is not bound by instructions or wishes of the heirs and cannot be removed even by a unanimous resolution of all heirs. The appointment of a representative of heirs represents a deep cut in the rights of the heirs. It is an emergency measure in case no executor has been appointed by will and the community of heirs is blocked.

With regard to regulating the consequences of one’s own death, one should not only consider who is to inherit how much once. The period from death to the division of the inheritance must also be taken into account in planning the inheritance. It can take on traumatic characteristics for the parties involved.