Administration of the estate within the community of heirs

1. Can I withdraw cash equal to my inheritance share? 

Under German law, an inheritance community arises automatically., A community of heirs is formed as soon as there is more than one heir – whether through intestate succession or a will. It arises immediately upon the death of the testator, that is, the moment a person dies. Neither a certificate of inheritance nor any other court decision is required. The individual co-heir does not even need to know that they are part of a community of heirs. If it is unclear whether there are other co-heirs or if they cannot initially be identified, the probate court may need to appoint a (partial) administrator for these "unknown heirs.". 

The community of heirs is a joint ownership community: The individual co-heir does not own shares in the real estate, bank balances, cars, securities, etc. belonging to the estate. Rather, the individual co-heir has a share in the estate as a whole as a separate asset. 

Example: 

The son, S, is an heir to a 1/5 share of the estate. He owed his father, the deceased, €5,000 from a purchase agreement. When the other co-heirs demanded payment of €5,000 from him before the settlement of the estate, S, considering his 1/5 share, only wanted to pay €4,000, arguing that he was entitled to €1,000 anyway.

The special assets of the estate and the personal assets of each individual co-heir are assets of different legal entities. Therefore, S still owes the community of heirs €5,000. 

In simple terms: Everything belongs to everyone. The co-heir can dispose of his share of the entire estate, but not of individual items of the estate or parts thereof. 

2. Can a co-heir be outvoted?

Cooperation within an inheritance community is strictly regulated. 

While the administration of the estate is generally the joint responsibility of the co-heirs (§ 2038 I 1), the proper administration is decided by a majority vote of the co-heirs (§§ 2038 II 1, 745). Dispositions, however, require the participation of all co-heirs according to § 2040 I.

Therefore, dispositions such as the transfer of ownership of real estate must be unanimously decided by all co-heirs. This applies not only to real estate but also to other assets of the estate, such as cars, bank account balances, etc. This gives even heirs with a very small share a significant legal position, as they can block dispositions for an extended period. For measures related to proper administration (for example, repairs to a heating system, renting out property within reasonable limits), however, a majority decision is sufficient. Every co-heir is obligated to participate in the proper administration of the estate (§ 2038 I 2).

The situation becomes particularly difficult in deadlock situations, for example, when two heirs each have a 50 share and cannot reach an agreement. In such cases, a stalemate can occur, which can often only be resolved by a lawsuit for consent. Unilateral action by an heir is only permissible in absolute emergencies, within the framework of so-called emergency administration, to protect the estate from imminent harm, pursuant to Section 2038 Paragraph 1 Sentence 2 of the German Civil Code (BGB).

3. Who manages the property and who decides on renting or renovation?

The rules of administration depend on the type of measure taken by the administration: 

For measures related to proper administration, such as necessary repairs or leasing to third parties, a majority decision of the heirs according to their inheritance shares may suffice. The decisive factor is generally the majority based on inheritance shares, not the number of heirs. 

However, if the co-heir wishes to make fundamental, extraordinary changes, such as the demolition of a building or an expensive, unnecessary renovation, all co-heirs must agree.

A special case is the so-called emergency management: If there is an imminent danger to the property, a co-heir may act alone to ensure its preservation. It is important to know that rental income initially flows into the joint assets of the community and is only distributed upon final settlement, while the ongoing costs must be borne by the heirs in proportion to their shares. 

4. Do I have to accept a complete renovation of the property?

The complete renovation of a dilapidated house is generally not considered proper management and therefore requires a unanimous decision by the heirs. If one co-heir takes action based on an invalid majority decision and enters into obligations with tradespeople, they may be acting without authority and could be liable for damages.

5. What can I do if a co-heir remains living in the house or blocks the sale?

In principle, each heir may use the property as long as they do not inconvenience the others. Under certain conditions, the other co-heirs can demand compensation for use (similar to rent) from the co-heir who uses the property. The specific use of the property usually requires an agreement among the co-heirs; this is considered part of proper management.

If a co-heir blocks the sale of the property, often the only remaining option is... Partition auction. Each co-heir can apply to the local court at any time to convert the indivisible house into divisible cash ("liquidation"). Sometimes, the mere threat of auction is enough to restart negotiations. It is not uncommon for the co-heirs to only reach an agreement after one of them has actually filed an application for auction. Such an application should be carefully prepared and only filed with legal representation. 

6. What happens if the co-heirs cannot reach an agreement?

In an estate, the co-heirs are generally obligated to participate in measures taken by the heirs. oto cooperate in the proper administration of the estate. This means that consent may not be refused without justification if a measure is, from the perspective of a reasonable person, beneficial to the estate. This duty to cooperate encompasses both joint decision-making and the actual implementation of the agreed-upon measures.

Should a co-heir refuse to cooperate in a necessary measure, this consent can also be enforced. A legally binding judgment then replaces the missing consent. 

7. If a pipe bursts in the inherited house, am I allowed to call a tradesperson immediately, even without the other owners?

Yes, the law provides for the right of emergency administration in such cases. Each co-heir is entitled to take measures necessary to preserve the estate on their own. However, this only applies if the measure is so urgent that the consent of the other heirs cannot be obtained in time.

This constitutes a genuine right of sole decision-making, which even grants the power to effectively bind the estate to third parties. Due to the fiduciary relationship existing between the heirs, this right even gives rise to a duty of emergency administration.