Anyone wishing to arrange their succession faces the choice between a will and an inheritance contract. The two instruments differ in essential respects -- particularly regarding binding effect and the possibility of amendments.
Fundamentals of Testamentary Succession
German inheritance law distinguishes between intestate succession and testamentary succession. Anyone wishing to deviate from intestate succession may do so by will or inheritance contract. Both are dispositions upon death within the meaning of the Bürgerliches Gesetzbuch.
The Will
A will is a unilateral disposition upon death. It can be drawn up as a handwritten will (§ 2247 BGB) or as a notarial will (§ 2232 BGB).
Handwritten Will
A handwritten will must be written entirely by hand and signed. It should include the place and date. A typewritten or digital version is not valid.
Advantages: No costs, can be drawn up at any time.
Disadvantages: Increased risk of formal errors, interpretation difficulties and loss. In the event of death, a certificate of inheritance is usually required, which entails additional costs and time.
Notarial Will
With a notarial will, the testator declares their last wishes to the notary, who then notarises them. The notary verifies legal capacity, advises on the legal consequences and ensures that the testator's wishes are clearly documented.
Advantages: Legal certainty, expert advice, official custody at the local court; in the event of death, a certificate of inheritance is often not required (the notarial will together with the opening protocol is accepted as proof).
Disadvantages: Notary fees are incurred pursuant to the GNotKG.
Joint Will
Spouses and registered civil partners may draw up a joint will (§ 2265 BGB). The best-known form is the so-called Berlin Will, in which the partners appoint each other as sole heirs and designate joint final heirs.
The Inheritance Contract
The inheritance contract (§ 2274 ff. BGB) is a contractual agreement between at least two persons, of whom at least one makes a disposition upon death. It must be notarised.
Key Features
- Binding effect: Contractual dispositions generally cannot be unilaterally revoked. This is the key difference from a will.
- Parties: Not only spouses but also unmarried partners, business partners or other persons may enter into an inheritance contract.
- Termination: Termination is only possible by notarised cancellation agreement, withdrawal (if reserved) or contestation.
Typical Use Cases
- Unmarried couples who cannot draw up a joint will
- Business succession with binding arrangements vis-a-vis the successor
- Agreements with caregivers (inheritance contract in return for care obligations)
- Arrangements between shareholders
Comparison: Will vs. Inheritance Contract
| Criterion | Will | Inheritance Contract |
|---|---|---|
| Form | Handwritten or notarial | Always notarial |
| Parties | Unilateral (or joint for spouses) | At least two persons |
| Binding effect | Generally freely revocable | Contractual dispositions are binding |
| Amendment | At any time by new will | Only by mutual agreement or withdrawal |
| Costs | Handwritten: none; Notarial: per GNotKG | Per GNotKG |
| Eligible persons | All (joint only for spouses/civil partners) | All |
Which Solution Is Appropriate?
The choice between a will and an inheritance contract depends on the individual situation. Those who wish to retain flexibility are often well advised to opt for a will. Those who need to make binding arrangements with other parties -- for example in the context of business succession -- will tend to choose an inheritance contract.
Costs
Notary fees for a will or inheritance contract are governed by the GNotKG and are based on the estate value. For an estate value of 500,000 euros, the costs for an individual will amount to approximately 935 euros (1.0 fee), and for an inheritance contract approximately 1,870 euros (2.0 fee) plus disbursements and VAT.
