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Inheritance issue - how does it work across borders?

(54 Posts)
WidowWadman Thu 20-Dec-12 19:38:34

Just looking on pointers were to ask. My aunt has died this week and it turns out that me and my brother and I are her beneficiaries.

We don't know yet how much there is (if anything), and there's complicating (I think) matters.

My aunt, my brother and I are all German nationals. My aunt lived in the Netherlands, where she had a flat, but she had also some bank accounts in Germany.

I'm a UK resident, and whilst I have a German bank account, there's precious little in there, and all my income is UK based and I pay UK taxes.

So how does the inheritance work tax wise? How do I best get it transferred to a UK account. How do I decide what type of account to open to park the money (depending how much it is)?

If it turns out that the inheritance isn't assets but only debts, how do I get out of it?

What questions do I need to ask when it comes to discuss the whole thing with the executor?

I will not be able to attend the first meeting in person, so will send my dad in my place which makes it more difficult. I know my dad has my best interests at heart, but I don't know whether he really knows how this whole shebang works either, so I'd rather give him a list of points to work through.

TalkinPeace2 Thu 20-Dec-12 19:59:19

You cannot inherit debts
The executor will settle the estate according to Netherlands tax law, liaising with the Germans.
At the end of the process you receive a cheque which you pay into your UK bank account.
It could be more than a year.

Why do you need to go to any meetings?
Only the executor needs to do that.
Beneficiaries don't.

MoreBeta Thu 20-Dec-12 20:05:13

Sounds like you have nothing to worry about. There will be nothing left after debts are paid so it is really just a formality.

You cannot inherit debts as Talkin says.

WidowWadman Thu 20-Dec-12 20:11:57

Apologies if I ask stupid questions, I've never been in the situation before and what my parents tell me is a bit confusing.

Will it be Dutch tax law even if the testament has been made in Germany, by German nationals (she was only resident in the Netherlands, and owned the flat).

The actual will was made when my uncle was still alive - he determined me and my brother to be beneficiaries, but that the estate would first go to his wife in the case of his death and then passed to us when she dies. According to what I've heard she actually denied that a will existed only a few days before her death.

We only know about it, because a copy was sent to us when my uncle died directly from the court where it was registered (sorry I don't know the right English words)
How can we be sure the executor gets it right when we're not there?

WidowWadman Thu 20-Dec-12 20:17:36

(The meeting question came up, because my dad suggested that I give him formal authorisation to attend in my place when the executor (another uncle) goes to speak to the notary (is that the right word? Argh I need to learn more legalese) about the will.

If this something beneficiaries normally don't do, then I guess I won't have to do that authorisation thing, do I?

TalkinPeace2 Thu 20-Dec-12 20:20:21

Who is the executor?

I do not know the difference between German and Dutch testacy law but I suspect its minimal.
If your aunt did not do a new will after your uncle's death then she was technically right in that it may be invalid.

Your best bet is to call and then email the executor (everything in writing)
and see what they say.
The only bit that has to be rushed is the death certificate.
Sorting the will, probate, all of that can take ages (and get very expensive if the lawyers get their way).

But firstly, you need to speak to the executor in the morning and find out what they think is happening.
Until that happens there is little or nothing you can do.

TalkinPeace2 Thu 20-Dec-12 20:22:50

Crosspost

OK Executor is your uncle.
That makes life a LOT simpler.
Get on the email. CC in all of the family all of the time until you know that the executor has a valid will to work from and then leave him to it.

Beneficiaries are not generally involved AT ALL
I was beneficiary of my Grandad's will and the first I knew was an unexpected cheque!
US family wills have involved cheques arriving from lawyers up to a year later.

WidowWadman Thu 20-Dec-12 20:29:48

The executor is another uncle.Which I don't think makes things any easier.

I don't have a copy of the will at hand, but will see it on sunday, when I go to my parents for Christmas.

The will was made in a way - from what I remember - that she could not change it as it was basically my uncle's - the German term is that we are "Nacherben", and she "Vorerbe", but I don't know whether there are corresponding terms in English? Googling suggest something like "reversionary inheritance"?

WidowWadman Thu 20-Dec-12 20:32:56

One worry I have is (but that may have been mistranslated by my mum) that he was talking about relinquishing the inheritance on our behalf. Would he be able to do that?

Email is not an option, they don't do email, don't think he has a computer in the first place.

TalkinPeace2 Thu 20-Dec-12 20:37:47

How could he 'relinquish' on your behalf.
He cannot change the will without the permission of the probate court (or its German / Dutch equivalent) and you and your Brother would both have the right to contest that (a VERY expensive game BTW - not worth it for under £100,000)
I take it your aunt had no children of her own ....
Call your Uncle.
If your German is rusty, get your brother to.
Get a few straight answers ASAP to put your mind at rest before Christmas.

I feel for you because DH discovered he had been disinherited while we were on holiday this summer - probate links are still at the side of my screen!

BUT
speak to your brother and the two of you work together to get coherent answers.

WidowWadman Thu 20-Dec-12 21:27:20

The good thing is I'm actually going over there for Christmas -so I can talk to both my uncle and my brother in person.

Thanks for setting my head straight. A lot of my worries are based on not knowing how the whole thing works and (I suspect my family not knowing it either) a lot of stuff being talked without actually looking at how it's supposed to work and then giving me a synopsis over the phone.

They had no children of their own. My other uncle who is the executor neither, which I suspect is the reason why my uncle decided to have my brother and me as beneficiaries.

It's a bit of a pig that this overshadowing Christmas - I was looking forward to a few joyful days at home with my family, and now can look forward to those discussions.

digerd Thu 20-Dec-12 21:44:12

I lived in Germany and my german husband died. Under german inheritance law the Erbe is the heir, Nacherbe is the After Heir, who inherits after your Aunt, you, BUT you inherit debts too under german law ( surely we do here?)
But you can refuse the inheritance if you want. There will be a time limit to refuse it, but that I don't know. You should contact an english speaking german solicitor specialising in Erbrecht as soon as possible.

TalkinPeace2 Thu 20-Dec-12 21:47:23

digerd
if somebody leaves - say- a house worth £300k and bills worth £295k then the family only get £5k
if on the other hand the debts were £305k, the family would get nothing, but the creditors would take a haircut too.

certainly in the UK, the US and France, the "beneficiaries" do not have to cough up for the debts of the deceased.

digerd Thu 20-Dec-12 21:51:35

Talkinpeace
Is your DH german or british? German blood children cannot be disinherited by german law, unless they killed or attempted to kill the parent.

digerd Thu 20-Dec-12 21:54:02

In Germany you do.

TalkinPeace2 Thu 20-Dec-12 21:55:21

British - and surely people can do what they like in their will ....

In the mean time - OP - Google is your friend
www.schweizer.com.au/articles/German_Inheritance_Taxes_(SK00131316).pdf
www.barandt.com/e_new_german_inheritance_tax_law.html

digerd Thu 20-Dec-12 21:56:36

The debts are inherited by the heirs in Germany, but would be taken out of the estate, of course.

TalkinPeace2 Thu 20-Dec-12 22:02:10

digerd
but if the debts are greater than the assets, the net debt is not passed on - surely

digerd Thu 20-Dec-12 22:05:16

Not in Europe. In France the heirs can not even be the spouses, by law the heirs are the blood-line children. Same in Spain. My friend's parent's emmigrated to Spain and dad died. Mother could not inherit anything from the dad and my friend had to go over to Spain as the sole legal heir and accept the inheritance.
Slightly different in Germany - if no children, legal heirs are 75% for the surviving spouse and 25% for the parents and siblings. You are entiltled to make a joint Will leaving everything to eachother, which disinherits the siblings . but any surviving parents have an obligatory portion of half their legal portion, which they do not have to claim, but have the right to do so if they wish.

TalkinPeace2 Thu 20-Dec-12 22:12:30

In OP's case then the will sounds about right - as she and her brother are the only ones in the next generation so will inherit whatever there is

what about the net debts thing?

digerd Thu 20-Dec-12 22:15:13

That I do not know. But do know you that you can refuse/relinquish the inheritance. I have forgotten the german word for it. My husband told me to do it as he thought he was going to die sooner than he did, and he said I would inherit only debts and the burdon of his mother at the time. But he lived another 2 years and sorted his finances out before he died.

digerd Thu 20-Dec-12 22:17:46

If my husband had not managed to pay off the mortgage on our house, I would have had to pay all his debts off out of his estate.

MousyMouse Thu 20-Dec-12 22:21:08

in germany you would have to actively refuse to inherit if you don't want to be stuck with any debts (for example for care home costs). but I don't know how it works with the netherlands.
I guess you need a good accountant (because of the possible tax implications) and possibly a solicitor specialised in international inheritance (maybe the toytown germany or dil forums could help you find someone)

digerd Thu 20-Dec-12 22:21:50

I was also told that under german law all property in other countries will come under the german law of the deceased estate. But not 100% sure about that. This was 16 years ago, but not much has changed in Germany

MousyMouse Thu 20-Dec-12 22:24:26

the word is 'erbausschlagung' and means walking away with nothing, no heirlooms or anything.

WidowWadman Thu 20-Dec-12 22:27:13

Thanks for reminding me of DIL - there might be some people in the know there.

Would I get a notification along the lines of "your inheritance is xyz or minus xyz" and then I can make a decision based on facts, or is it a gamble and I have to take a guess?

I don't really exactly have spare cash to pay an accountant and/or lawyer, especially when it turns out that there is nothing to be inherited. sad

digerd Thu 20-Dec-12 22:27:47

Now inheritance tax was also different. So much for the spouse allowed and all legal heirs - children- non-legal heirs the Tax free inheritance was then only 10,000DM. But as heirs live in UK, not sure about how that would work. And as the deceased had no legal heirs - blood line children- not sure how niece's and nephews are catagorised.

TalkinPeace2 Thu 20-Dec-12 22:28:16

digerd I fully get paying debts out of the estate - that is standard everywhere.
My question (and OP's question) was : what happens if debts exceed assets
you implied that the beneficiaries would become liable for those debts
which I genuinely find unlikely.

Mousy "solicitors specialising in international inheritance" is a sure fire way to lose the balance of the estate.... if all the assets were in Germany and the Netherlands and mainly property, bank and shares its no great shakes to crystallise the estate....

TalkinPeace2 Thu 20-Dec-12 22:30:15

widow
YOU do not pay the bills. The estate pays the bills and you get the net amount.
Read through those links I posted.
As a beneficiary you just have to sit and wait.

and the tax free allowances are now in line with those elsewhere in the Schengen zone and the UK

digerd Thu 20-Dec-12 22:31:50

Just a warning that you should not fall foul of the german laws, their punishments are harsh.
I knew all about my husbands finances and as I was his wife with everything in our joint names, I had no problem. Except with MIL who sued me for her bit.

digerd Thu 20-Dec-12 22:32:46

ps
it was a 3-year nightmare

TalkinPeace2 Thu 20-Dec-12 22:35:26

Oh digerd, that is awful
the UK tax system keeps me in beer, but at least who stuff is left to is up to the individual.

digerd Thu 20-Dec-12 22:37:16

I know that debts will be inherited, but not the details, as I had none, thankfully, due my dear sick husband settling things for me. But he did warn me to refuse it 2 years before, as I would only inherit debt.

Pantofino Thu 20-Dec-12 22:37:53

Talkinpeace - that is standard in Belgium too - if the estate has debts, you can refuse to inherit if you choose.

TalkinPeace2 Thu 20-Dec-12 22:41:58

Aha, I understand (I think)
so the net debt would technically be passed on, but as the heirs can choose to reject, effectively the debt has to be written off

in the UK and US version, if the estate drops to zero, thats that and the beneficiaries are given no option.

digerd Thu 20-Dec-12 22:42:33

There was a thread regarding inheritance in Uk and a girl in France posted that she had no right to inherit anything from her DH and she was aghast. If french people have no children together, they have to make 2 wills leaving their estate to their blood line, whether children or siblings/parents. But they are obliged in law to be responsible for blood line parents financially/care.

digerd Fri 21-Dec-12 08:50:34

I once contacted a german solicitor based in London and asked for a translation of a certain law regarding my case, and for 3 pages I was charged £433 - 13 years ago.

digerd Fri 21-Dec-12 09:15:44

You can get free basic info from the Amtsgericht re. inheritance, but what the time limit is to formally reject the inhertance, don't know if they can answer that question. I also contacted the Testament Eroefnungs Abteilung, and they give me the correct info that my own solicitor got wrong.!! All for free

digerd Fri 21-Dec-12 13:48:31

Just read on a website about the new inheritance tax laws in Germany which were changed in 2009,10 and 11.
As a niece and nephew you are both in class 2 and the tax free allowance is only EURO 20,000 for each of you, under german tax laws.
There was also a paragraph about german citizens domicile in and outside Germany but rather complicated and brain went haywire by then.

digerd Fri 21-Dec-12 13:50:17

ps
Not sure if it was for each of you or both together.

CinnabarRed Fri 21-Dec-12 13:54:27

Just want to say that swathes of legal stuff talked about on here isn't tax law - it's the law of intestacy.

It's quite clear from this thread that the laws vary enormously from country to country. My recommendation (as a tax lawyer!) is to get local legal representation.

TalkinPeace2 Fri 21-Dec-12 13:54:58

Looking at this
www.schweizer.com.au/articles/German_Inheritance_Taxes_(SK00131316).pdf
there is an additional allowance of E 12,000 for chattels
and as the main property was not in Germany, it may not come under the E 20,000 block - that will apply to the savings and any shares

all up OP, keep your uncle sweet and it should all be fine.
the 30% tax rate is lower than the UK's 40% !

TalkinPeace2 Fri 21-Dec-12 13:56:16

Cinnabar Absolutely - OP has her Uncle dealing with it, but wanted to get more info.
Poor digerd knows more about the system than anybody should have to.

digerd Fri 21-Dec-12 17:27:36

Talkin
Indeed, and you don't know the half of it - thanks for the sympathy, much appreciated.

I paid no inheritance tax as the spouse, which was at the time in 1997, DM 424.000 non-taxable allowance for me. Now I see it is Euro 500.000.
It was the claim from MIL that was a nightmare for me. She also had 10 other grown-up children and 25 adult grandchildren, so needed no money from me, but, the german law gave her the unconditional right as I had been unable to conceive with DH and he died childless.

WidowWadman Sat 22-Dec-12 07:40:32

Thanks for all the hints and links and comments.

WidowWadman Sun 30-Dec-12 20:19:52

cinnabar - "My recommendation (as a tax lawyer!) is to get local legal representation. "

Should I look for Dutch or German representation? I've done a lot of Googling, but all I find contradicts each other, as to whether German or Dutch law applies? She'd lived for about 15 years (if not longer) in the Netherlands, but as a German national. Some site suggests we would have to pay tax in both Germany and the Netherlands?

The will had been drawn up in Germany - and from my understanding from googling was 'fixed' (as in not changeable anymore) with the death of my uncle.

SolomanDaisy Sun 30-Dec-12 20:36:44

My understanding is if your aunt/uncle wanted German rather than Dutch law to apply they would have had to register that with a notary in the Netherlands. If they didn't do that Dutch law will apply. I think that would mean the will wasn't valid, as Dutch wills need to be lodged with the state. But if they did register their choice of German law with a notary, German law and taxation will apply.

WidowWadman Sun 30-Dec-12 20:40:27

They were already residents of the Netherlands when the will was drawn up in Germany. We had been sent a copy of the will by the German court it was registered at, after the death of my uncle.

suburbophobe Sun 30-Dec-12 21:21:57

You cannot inherit debts

Yes you can in NL.

Just like your inheritance automatically goes to your wife and children. (or barring that, other family). One of the reasons they were the first country to bring in gay marriage (inheritance rights to your spouse).

I also know there is something like a tax agreement in Europe between countries so you do not have to pay in each country.

Really OP, best to get legal advice for your particular situation, --rather than get confusing posts on a forum
on a very difficult subject--.

International tax lawyers is your best bet.

suburbophobe Sun 30-Dec-12 21:40:42

She'd lived for about 15 years (if not longer) in the Netherlands, but as a German national. Some site suggests we would have to pay tax in both Germany and the Netherlands.

The fact that she is German living in NL is neither here nor there (EU, remember). She would fall under Dutch tax law.

You need to get her SOFI nr. (SOcial FIscal) now known as Burger Service number, from there you can phone and ask at the Dutch tax office (--but they know shit all--)

http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/individuals/living_and_working/tax_treaties/tax_treaties_and_income_from_different_countries_sitegbied/tax_treaties_and_income_from_different_countries

suburbophobe Sun 30-Dec-12 21:45:48
WidowWadman Sun 30-Dec-12 21:58:50

Thanks for the (working!) link. The whole thing is stressing me out so much. sad

SolomanDaisy Mon 31-Dec-12 15:11:17

You really need to find out whether their wish to apply German law was registered with a notary in the Netherlands. Establishing whether the will is valid under Dutch law needs to come before worrying about tax.

GrumpySod Wed 02-Jan-13 14:28:20

On a different tack... when it comes to transferring any possible money to the UK, check what tax liability rules are. I don't know anything for certain. But after I transferred in a load of money from outside EU to my UK bank account (medium-size inheritance) I was told I should have paid hefty tax on it; there was some funny loophole trick to avoid tax.

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