Testamentary execution

Larger or more complex inheritances in particular often carry the risk of disputes between the heirs after the inheritance. In many cases, people who want to regulate their estate through a will are aware of this. It is not uncommon for people to then appoint an executor to take care of the administration and settlement of the estate.

But even if heirs are still minors or are adults but still young, it is right and sensible to place the execution of the will in the hands of an executor.

No will execution without a will

In order for an executor to be able to take care of the administration or settlement of the estate, the execution of the will must be ordered in a will or inheritance contract (see Section 2197 Paragraph 1 of the German Civil Code). Without an express order from the testator, no will execution takes place. This means that the execution of the will is not possible in the case of legal succession.

The execution of the will should not be confused with the administration of the estate. In this case, a third party is temporarily appointed by the probate court as the administrator of the estate if, for example, it is unclear who the heir is.

Situations for the execution of a will

The situations in which the execution of a will is appropriate or may become necessary are very different. It makes sense to appoint an executor in the following situations, among others:

• complicated assets (shareholdings in companies, assets abroad, etc.)
• lack of trust in the heirs or quarreling heirs
• complex composition of the community of heirs, for example in patchwork families
• provision of disabled children / grandchildren in the future
• minor heirs or young, inexperienced heirs in company constellations

Duties of an executor in the execution of a will

If execution of a will is ordered, an heir or heirs have no right to dispose of the estate. In the case of execution of a will, the executor’s original task is to manage or settle the estate – depending on what was ordered by the testator.

Immediately after the inheritance, the executor is entrusted with, among other things, securing the estate and reviewing relevant documents, etc. It is also his job to immediately create an inventory of the estate and make it available to the heirs. In addition, there are numerous organizational tasks such as terminating contracts, clearing out an apartment and submitting the inheritance tax return. In other cases, e.g. in the case of minor heirs, the (long-term) administration of the assets is also the task of an executor.

Last but not least, it is the executor’s responsibility to submit the inheritance tax return for the estate (Section 31, Paragraph 5 of the Inheritance Tax Act).

Settlement of the inheritance

The most important task of the executor is to carry out the settlement of the inheritance promptly if the testator has not ordered a longer administration. However, all debts and liabilities must be settled before the division.

When settling the inheritance, the executor must divide the estate in accordance with the testator’s instructions and the statutory rules for division. If the testator has not specified any instructions for dividing the estate, the executor will divide the estate at his own discretion. This can naturally lead to conflicts with or among the heirs. When it comes to how the settlement should be carried out, the heirs have no say. However, the heirs can mutually exclude the settlement of the inheritance, for example if the time for the settlement is unsuitable or not economically viable.

Division plan or division agreement

The basis for the division of the estate is then basically the so-called division plan, about which the executor must consult the heirs. Once the plan has been drawn up and declared binding, it can only be changed with the consent of all heirs. If an heir does not agree with the division plan, he can file a so-called inheritance settlement suit or division suit before the probate court and try to enforce his own division plan for the entire estate. In practice, however, this is a long road.

An alternative to the division plan is the division agreement, if all heirs can agree on the division of the estate. Here – unlike with the division plan – deviations from the testator’s instructions are also possible.

Professional testamentary execution makes sense

If you are thinking about appointing an executor, you should ideally choose a professional executor and not a “lay executor” from your circle of friends. The tasks of an executor are too important, too extensive and too complex.

For lay executors in particular, a lack of familiarity with the legal provisions and requirements often leads to delays and errors, which then give rise to disputes. It is not for nothing that inheritance disputes often arise in connection with the rights of the executor. You can prevent this to a certain extent in your own will by relying on the work of a professional executor.

Examples of testamentary execution

• Example 1: The married couple M and F have two children, A and B. A is a minor, B is in training. In the event of their joint deaths, they appoint an executor who is to manage the children’s estate until they turn 30 and ensure that the children receive their education.
• Example 2: Widow W suffers greatly from the bad relationship between her two sons A and B. After their deaths, she wants to avoid further arguments between the two and appoints her confidant V as executor of her estate. V is to settle the estate and settle it between A and B.
• Example 3: The married couple M and F have two sons, A and B. B is severely disabled. In order to ensure that B is provided for after their deaths, they draw up a so-called “disabled person’s will” and appoint A as executor. After the deaths of M and F, A manages B’s share of the estate and ensures that his brother is provided for.