Help! I'm part of a community of heirs!

If several people become heirs, they initially jointly own the entire estate. All heirs form what is known as a community of heirs. The handling and settlement of communities of heirs often raises questions. Notaries provide support and advice in advance on how to prevent communities of heirs from becoming dysfunctional.

Inheriting without doing anything

When someone dies, their relatives rarely think about the legal consequences: under German law, the entire estate of the deceased—the inheritance—passes to the heirs named in the will, inheritance contract, or statutory succession. This happens automatically; the heirs do not need to take any action. However, they can renounce the inheritance within the renunciation period (usually six weeks).[1]

All heirs must cooperate

Several heirs hold the entire estate together as a community of heirs. The most important consequence of this is that they can only dispose of estate assets jointly. „If a car or real estate is to be sold, all heirs must be involved,“ explains Dr. Markus Baschnagel, managing director of the Baden-Württemberg Chamber of Notaries. This can lead to practical difficulties because not all co-heirs are always able or willing to participate in the administration or distribution of the estate. „There are many reasons for this. For example, individual co-heirs may live abroad, may not have full legal capacity, or there may simply be differences of opinion. The community of heirs is therefore usually not suitable for holding the estate assets in the long term,“ concludes Baschnagel. However, precautions can be taken to prevent such non-functional communities of heirs: Notaries provide advice on this matter when drafting wills and inheritance contracts.

Confrontation – even without conflict

Communities of heirs can be dissolved in various ways:

• The heirs can agree on the distribution of the estate and regulate this in a contract, known as the distribution of the estate. If the estate includes real estate or shares in a limited liability company, notarization is required. Compensation payments can also be agreed upon in this context. The advantage: „If real estate belonging to the estate is transferred to a co-heir, no real estate transfer tax is payable,“ says Baschnagel.
• An heir may transfer their share in the community of heirs to a co-heir or to a third party. If an heir wishes to sell their share of the inheritance to a third party, the other co-heirs have a right of first refusal. If one person acquires all shares of the inheritance, they are entitled to the entire estate. Transfers of inheritance shares also require notarization.
• Things can become more complicated if no agreement can be reached on the distribution of the estate. It is possible to apply for estate mediation proceedings before a notary. „However, such proceedings involve a great deal of effort and are rarely successful,“ reports Baschnagel. More often than not, the co-heirs therefore resort to the sharpest sword and apply for a partition auction, in which the estate assets, especially real estate, are auctioned off by the court. „However, this is usually the worst solution, as a better price can often be achieved through a private sale,“ explains Baschnagel..

Notarial assistance with the transaction

Notaries explain legal pitfalls, ensure legally secure arrangements, and thus make it easier for heirs to settle their community of heirs. Notarial advice not only helps to dissolve existing communities of heirs, but can also prevent conflicts. „Those who draw up a will or inheritance contract at an early stage can specifically prevent the formation of a dysfunctional community of heirs,“ explains Baschnagel. „Those who make provisions often spare their relatives complicated and emotional disputes,“ concludes Baschnagel.

[1]     The topic of renunciation of inheritance is covered in our press release from September 2024, available at:
https://medienverbund-notarkammern.de/wp-content/uploads/2024/10/Pressemitteilung-2024-9-Karras.pdf