Legacies

With a legacy, it is possible to give a specific item from your assets – e.g. jewelry, a property – to a specific person in a will or inheritance contract. But the donation of money or rights (e.g. copyrights for use or the entire digital estate) is also possible in a legacy.

For testators, heirs, a community of heirs, but also legatees, a legacy can become a challenge in which legal support is often necessary and useful.

Legacy: claim against the heirs

Anyone who has been given a legacy by a person is not that person’s heir and is therefore not a member of the community of heirs. Anyone who is a legatee does not automatically acquire ownership of the bequeathed item or become the owner of the bequeathed right.

Rather, the legacy merely provides a contractual claim against the heir or the community of heirs or the other co-heirs, i.e. a right of claim. This claim is then aimed at transferring the assigned item or right to the heir(s).

Getting your legacy right

Anyone who wants to include legacies in a will or an inheritance contract should seek legal advice. Professional advice ensures that legacies are designed in such a way that there are no later ambiguities and disputes between heirs and legatees.

Important aspects include defining the due date of a legacy and/or determining replacement legatees.

Heirs as (advance) legatees

A legatee is not automatically an heir. However, a legatee can also be the heir of the deceased person. This can be the case, for example, if a child inherits a parent but is supposed to receive a specific item from the inheritance due to wording in the will or inheritance contract. The legal distinction between a so-called advance legacy and a division order is often difficult, but is crucial for the person’s legal position.

It is also important in this context: co-heirs can also be given an (advance) bequest. This can undermine the estate to such an extent that the remaining co-heirs may not even be entitled to their compulsory share.

This can mean that in individual cases it even makes sense to renounce the inheritance in order to be able to assert the full compulsory portion claim (so-called “tactical renunciation”). However, this is a complex and time-critical undertaking that should only be undertaken with legal assistance.

Legacy: Inheritance tax and reporting obligation

Even if a legatee is not necessarily an heir, he or she may still be obliged to pay inheritance tax. A legacy is also an acquisition upon death and is therefore generally subject to inheritance tax.  

This can be problematic: the obligation to pay inheritance tax does not arise until the claim from the legacy has been fulfilled by the heirs or the community of heirs. Inheritance tax liability arises when the person dies. The death of the person also determines the value of the legacy for inheritance tax purposes.

However, certain allowances also apply in connection with inheritance tax and legacies. Only if the value of the legacy exceeds the individual, existing inheritance tax allowance (e.g. more than 400,000 euros for children with one parent) will inheritance tax be due on this excess amount. If a legatee is also an heir, all acquisitions upon death (inheritance, advance bequest) must be added together. You can find an overview of the inheritance tax allowances in our text on inheritance tax.

In addition, legatees are also subject to the so-called reporting obligation in accordance with Section 30 of the Inheritance Tax Act (ErbStG). Therefore, legatees must also report this acquisition to the responsible tax office in order not to commit a criminal offense. You can find out more about this in our text on the obligation to report.

Enforcement of a legacy

Enforcing the claim from the legacy is often problematic. On the one hand, the personal relationship between legatees and heirs is often not particularly good. On the other hand, a legacy can place a significant financial burden on an inheritance as a whole. This also means that the satisfaction of the legacy claim often encounters resistance and resistance and thus leads to legal disputes.  

As a rule, the enforcement of a legacy claim begins with the assertion of corresponding information claims against the heir or the community of heirs. In this way, if necessary, you can obtain the necessary information in order to be able to assert the actual legacy claim.  

If the heirs are not willing to provide information, the right to information must be enforced in court. The same applies to the actual legacy claim: if the heirs or the community of heirs are not prepared to fulfill the legacy claim, it must be enforced in court. Compulsory enforcement is also possible in an emergency.

Example of a legacy

Widow W names her son S as her sole heir.

She bequeaths a sum of EUR 5,000.00 to the Munich animal shelter. Her silver service is to go to her best friend F. Her partner L is to have the right to continue living in her house rent-free for a period of three years after W’s death.

After the widow’s death, the animal shelter will turn to the son and demand EUR 5,000.00 in cash – just as the friend will demand the silver service. The partner will receive a temporary right of residence in the woman’s house, which the son must accept until the end of the three years after the mother’s death.