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The establishment of a will is as necessary as it is repeatedly postponed. Only 35% of Germans have a will, according to a study by Deutsche Bank (Deutsche Bank study on inheritance and bequests “Erben und Vererben 2024”). This is both regrettable and dangerous because the order of succession determined by will, i.e. the order written in a will and therefore the order personally desired, can be very different from the legal order of succession. Although unpopular or ungrateful relatives can only be excluded in exceptional cases, the timely regulation of who should receive what and how much can already be determined during your lifetime. Failure to do so might lead to disputes and resentment after one’s death.
The proverbial roaring stag above grandma’s couch often becomes a point of contention for everyone involved – not because everyone wants the picture, but because no one wants anyone else to have it.
Equally important as the will itself is appointing someone to oversee its execution, ensuring that the deceased’s last wishes are carried out as intended. This role guarantees that the directives in the will are implemented properly. There are no specific prerequisites for this position; it can be held by anyone. The individual who created the will has complete freedom in choosing the executor. This person does not need to be a lawyer or a relative; generally, it is someone who enjoys the trust of the deceased and, unfortunately, must possess a certain degree of assertiveness.
So, what activities are required if you are offered this position or are allowed to perform it? Typically, a will is opened ex officio, and someone must ensure that the last will is carried out. Let’s assume that the executor has been informed by a local court that they have been chosen to fulfil this role. The next official act is to formally declare to the local court that they accept the position. Generally, the heirs must also declare that they have no objections to the appointment.
If the executor is appointed at a very early stage, immediately following the death of the testator, they must handle the necessary matters related to the funeral and the subsequent liquidation of the home or household. This involves creating an inventory of the deceased’s estate, which typically accompanies the task of “clearing out” the household. The scenarios here can vary widely – from the “messy apartment” of a person with dementia to a well-equipped villa containing significant assets that may not be immediately apparent.
The range of assets can include works of art, valuable furniture, jewellery, or an extensive collection of gold coins. All these items should be listed in an inventory and, if possible, valued. Creating such a list, ideally with photos, is crucial for the subsequent tax return.
Additionally, there might be items tucked away in the garage, such as an old motorcycle or a 1956 Jaguar. Of course, there are also assets held at banks, including current account balances, fixed-term deposits, savings books, and securities accounts. In today’s digital age, virtual assets like Bitcoin and other cryptocurrencies may also be part of the estate. All of these must be meticulously catalogued, and any liabilities should also be noted. Of course, real estate and company investments (closed-end funds and alternative investments deserve special attention) should be included in the inventory.
Let’s consider the costs involved. A certificate of inheritance can be quite expensive and, while some banks may require it, it is not actually necessary. What is important, however, is obtaining an executor’s certificate, which clearly confirms the legitimacy of the executor. This certificate is invaluable as it literally opens doors and should be applied for at the local court as soon as possible. It helps avoid lengthy negotiations and explanations, particularly with authorities and banks.
Depending on the size of the assets and the scope of your activities, executing a will can also be financially rewarding. The fee typically amounts to a single-digit percentage of the “administered” assets, and additional charges may apply depending on the complexity and specific circumstances involved. This is assuming we are dealing with a “normal” will that pertains exclusively to domestic assets. The task becomes particularly interesting when there are assets located abroad or if the deceased passed away abroad. This raises the question of which legal norms are applicable. The deceased probably could have addressed this in the will, but this is a topic for another blog.
In any case, there are many pitfalls and mistakes to avoid when executing a will, especially when it involves assets in foreign countries. As always, it is helpful to obtain information on these topics early on and to familiarize yourself with the processes involved. Frankfurt School offers a comprehensive certificate course for executors of wills, covering everything important from the basics to digital inheritance.
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