Inheritance dispute

When can I demand the division of the estate among the heirs?

If several people inherit a deceased person, a community of heirs is created. The community of heirs is not intended to exist for a long period of time. Therefore, the main aim of the community of heirs is to dissolve itself. Pursuant to Section 2042 (1) BGB, each co-heir has the right to demand dissolution, unless otherwise stipulated in Sections 2043 to 2045.

The settlement of an inheritance presents a major challenge for many co-heirs. When several heirs jointly manage the estate of a deceased person, reaching an agreement on the division of assets is often difficult. Conflicts are particularly likely when real estate is part of the estate. As your competent partner in inheritance law, we support you in making the settlement of the inheritance as smooth as possible and in protecting your interests as an heir.

A key instrument for regulating the division of an estate is the distribution plan. This plan details which co-heir receives which share of the estate. If an amicable agreement among the heirs is not possible, the forced sale of real estate can be considered as a last resort. We will advise you comprehensively on the legal options and associated costs to find the best possible solution for you and secure your share of the inheritance.

The costs of settling an inheritance can vary significantly depending on the size and complexity of the estate. These costs include, among other things, legal fees, notary fees, and, if applicable, court fees for a partition sale. Transparent and proactive planning helps keep costs under control. We will inform you about all applicable fees from the outset and work with you to develop a strategy for dividing the estate fairly and economically for all co-heirs.

Can the testator permanently prohibit the division of the estate among the heirs? 

Pursuant to Section 2042 (1) BGB, each co-heir generally has the right to demand the settlement of the community of heirs. However, this right can be excluded, at least temporarily, by testamentary disposition in accordance with Section 2044 (1) sentence 1. However, Section 2044 para. 2 sentence 1 stipulates a maximum period of 30 years after the occurrence of the inheritance for the effectiveness of this disposition. Prior to the expiry of this period, the settlement of the community of heirs can only be demanded pursuant to Section 2044 para. 1 sentence 2 in conjunction with Section 749 para. 2 sentence 1 BGB if there is good cause.

In the context of interpreting the will, however, it must be determined in the specific case whether the disposition in question is a legally non-binding request or advice or a prohibition of division (Karlsruhe Higher Regional Court (11th Civil Senate), judgement of 09/02/2022 - 11 U 7/21, para.27).

In principle, the testator can limit the prohibition of division to individual items of the estate in accordance with Section 2044 (1) sentence 1 BGB (Karlsruhe Higher Regional Court (11th Civil Senate), judgement of 09/02/2022 - 11 U 7/21, para.27) . However, the maximum period of 30 years from the occurrence of the inheritance must also be observed for the validity of the disposition.

Can the co-heirs jointly disregard the testator's instructions?

Yes, the co-heirs can jointly disregard the testator's instructions.

It should be noted that the prohibition on partition is only a contractual and not a property-related restriction. If the heirs violate the contractual obligation to refrain from partition, the property-related effect of the disposition remains unaffected.Cottbus Regional Court, decision of 18 July 2022 - 7 T 128/21, BeckRS 2022, 30614, para. 17; KG, Decision of 25 May 2021 – 19 W 26/21, ErbR 2022, 149 (154)). This was originally established by the BGH in its judgement of 25.9.1963 (Ref. no.: V ZR 130/61).

The prohibition of division applies both to the assertion and fulfilment of the right to division in accordance with Section 2042 (1) BGB. If there is agreement among the co-heirs, they can dissolve the community of heirs without further ado due to the effect under the law of obligations and disregard the prohibition of division as well as a division order of the testator (OLG Munich, decision of 29 August 2018, 8 U 3464/17, para. 22). A different rule applies only if the testator has favored persons outside the community of heirs through a condition or a legacy, and for this reason there are persons entitled to enforce the prohibition of partition in their own interest.

When does a co-heir lose their right to inheritance due to a penalty clause in the will?

The penalty clause is to be classified as a so-called special forfeiture clause, which makes the demand for settlement by a co-heir a resolutory condition for his or her inheritance.

According to the BGH, a testator's instruction to make the validity of a testamentary bequest dependent on the fulfilment of a condition is not expressly regulated. However, it is generally recognised and follows from Sections 158 et seq. in conjunction with Sections 2074 et seq. BGB that such an arrangement is possible. The corresponding condition can be based on specific behaviour (Federal Court of Justice (BGH), Judgment of June 24, 2009 – IV ZR 202/07 (Higher Regional Court of Munich), Rn. 17).

How does the division of the estate proceed?

If the heirs mutually agree on a comprehensive solution, a settlement agreement is sufficient to dissolve the community of heirs. This agreement requires the signatures of all co-heirs and forms the basis for the distribution of cash and assets.

A key prerequisite for such an agreement is that the estate is ready for distribution. This is generally the case when the heirs have settled all liabilities of the estate and the remaining assets can be divided.

Various criteria must be met in order to be ready for division.

Determining the shares of the inheritance: First, it must be clarified who has become an heir.

List of all assets and liabilities: To keep an overview of all assets and liabilities, a list of all assets and liabilities should be created.

Settlement of all estate liabilities: Before the distribution can take place, the debts of the deceased must be settled.

Implementation of the testator's instructions: Specific instructions from the testator, such as claims to a compulsory share or legacies, must be fulfilled. Instructions regarding the division of the estate made by the testator can be unanimously overridden by the heirs.

Clarification of compensation claims among co-heirs: If a co-heir receives an asset that exceeds the value of their share of the inheritance, the other co-heirs can demand compensation. Compensation can also be demanded if a co-heir cared for the deceased before their death.

No prohibition on partition by the testator: The testator can prohibit partition for a period of 30 years. However, this provision can be unanimously overridden by the heirs.

No effective postponement of the division of the estate: According to Section 2045 of the German Civil Code (BGB), any heir can request a postponement of the division of the estate as long as a public notice procedure has not been completed. This procedure serves, in particular, to protect the community of heirs as long as there is uncertainty as to whether there are any further creditors. Should a co-heir fear that there are still claims against the estate, they can apply for the public notice procedure and thus postpone the division until the conclusion of the procedure. The application is filed with the local court and does not require a majority decision of the community of heirs; any one heir can file it individually. After the application is filed, the court sets a deadline within which creditors must register their claims.

Possibility of dividing the estate without loss of value: Dividing an estate without loss of value is only possible with divisible assets. This applies particularly to money or securities. It is more difficult with real estate and land. Here, either an agreement must be reached among the heirs, or the properties must be converted into cash through a partition auction. The resulting cash can then be distributed among the heirs.

Co-heirs who wish to realize their inheritance immediately or who are tired of the disputes within the community of heirs have the option of selling their share. The consent of the other co-heirs is not required. Potential buyers can be either the other co-heirs or external parties. It should be noted that the other co-heirs have a two-month right of first refusal. This allows them to prevent external parties from gaining influence within the community of heirs. After the contract is concluded, the co-heir receives the consideration agreed upon in the purchase agreement, which is not necessarily identical to the value of the inheritance share.

The term "separation" refers to the relinquishment of one co-heir's share of the inheritance in exchange for compensation from the other co-heirs. This results in the "increase" of the remaining shares of the inheritance. The amount of the compensation is determined by the agreements reached among the heirs.

Is there a right to only a partial settlement of the inheritance?

In principle, there is no entitlement to a partial settlement of the community of heirs. Co-heirs often mistakenly assume that they are entitled to payment of an account balance in proportion to their inheritance share. However, this is not the case. The claim for settlement is not directed at individual items of the estate, but only relates to the estate as a whole. However, if all heirs agree to initially limit the settlement to individual items of the estate, this is of course possible. This case occurs relatively frequently in practice. Jewellery, cash and accounts are usually divided up first. Immovable property such as real estate is then distributed.

Incidentally, case law is extremely restrictive with regard to partial settlement. In its ruling of 9 January 2013, the Higher Regional Court of Koblenz stated that a partial settlement can only be demanded by co-heirs in exceptional cases if this is justified by special reasons and the interests of the community of heirs and the other co-heirs are not impaired as a result (Ref.: 3 W 672/12).

Can a dispute among the heirs be forced?

If co-heirs object to the division of the community of heirs, individual or several co-heirs can attempt to enforce their division plan for the entire estate in court.

The prerequisites for the action for distribution of the estate include

A lawsuit to partition an estate is not possible if the testator has prohibited the dissolution of the community of heirs. Should the testator have made such a provision, all co-heirs must consent to the dissolution.

In addition, the estate must be ready for division. This is the case when all liabilities of the estate have been settled.

Furthermore, it must be determined who all belongs to the group of co-heirs.

The plaintiff co-heir must submit a division plan that takes into account all heirs with a corresponding share of the inheritance.

As a further requirement, the division plan must have been expressly rejected by a co-heir before the lawsuit is filed.

In addition, indivisible items of the estate must have been converted into a divisible amount of money through a partition auction.

What needs to be considered when there are minors in the community of heirs?

Due to a lack of legal capacity, underage heirs cannot participate independently in the transactions of the community of heirs. Instead, they are represented by their parents. However, if they are also part of the community of heirs, they cannot effectively represent the child, as otherwise a case of „self-dealing“ will occur, which is prohibited by law. In this case, a so-called supplementary guardian must be appointed.

Is there a deadline for the dispute?

No, there is no deadline for the settlement of the community of heirs.

It is up to the co-heirs alone to decide when the community of heirs should be dissolved. This results, among other things, from the wording of Section 2042 BGB, which states: „Each co-heir can demand the dissolution at any time“.

The claim pursuant to Section 2042 BGB for the settlement of the community of heirs is not time-barred. § Section 2042 (2) BGB refers to Section 758 BGB. This states that the claim for dissolution of the community is not subject to the statute of limitations.

Conclusion regarding the dispute among the heirs

When multiple heirs are involved, an estate community is formed, in which all co-heirs must jointly decide on the inheritance. Settling an inheritance is often fraught with conflict, especially when real estate or a house is part of the estate. Without an agreement, the division can fail, making a forced sale by auction a last resort. This legal process not only incurs additional costs but also frequently leads to financial disadvantages, as the winning bid does not always reflect the actual market value.

To avoid escalation, a structured division plan should be drawn up early on, taking into account each co-heir's respective share of the inheritance and enabling a fair distribution of the estate. An amicable solution is generally more economically sensible than a forced auction or lengthy legal disputes. Nevertheless, it is possible to enforce the division of the inheritance through legal action if individual co-heirs obstruct progress.

It is therefore crucial for every heir to be fully aware of their rights and options. Whether selling their share of the inheritance, partitioning the estate, holding a forced sale, or pursuing legal action – the right strategy always depends on the specific estate and the other heirs involved. Seeking legal advice early on helps avoid unnecessary costs and find a suitable solution for dividing the estate.