Settlement of the community of 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, so 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.
1. Who is responsible for settling the estate?
If the testator has not appointed an executor, the heirs are responsible for settling the community of heirs. However, if the testator has requested an executor, only the executor may dissolve the community of heirs in close cooperation with the heirs.
2. Can the testator permanently prohibit the settlement of the community of heirs?
No, the testator cannot permanently prohibit the settlement of the community of heirs.
Pursuant to Section 2042 (1) BGB, every co-heir has the fundamental 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 in accordance with Section 2044 para. 1 sentence 2 in conjunction with Section 749 para. 2 sentence 1 BGB if there is good cause.
As part of the interpretation of the will, however, it must be determined in the specific case whether the disposition in question is a purely legally non-binding request or advice or a prohibition of division (OLG Karlsruhe (11th Civil Senate), judgment of 09.02.2022 - 11 U 7/21, para.27).
3. Can the testator permanently prohibit the community from disputing certain estate items such as real estate?
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 (Higher Regional Court Karlsruhe (11th Civil Senate), judgment 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.
4. Can the co-heirs jointly override the testator's instructions?
Yes, the co-heirs can jointly disregard the testator's disposition.
It should be noted that the prohibition of division is only a restriction under the law of obligations and not a restriction in rem. However, if the heirs violate the obligation to refrain under the law of obligations, the effect in rem of the disposition transaction is not affected (Cottbus Regional Court, decision of 18.7.2022 - 7 T 128/21, BeckRS 2022, 30614, para. 17; KG, decision of 25.5.2021 - 19 W 26/21, ErbR 2022, 149 (154)). This was originally established by the BGH in its judgment of 25.9.1963 (Ref.: V ZR 130/61).
The prohibition of division applies to both the assertion and the fulfillment 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 29.8.2018, 8 U 3464/17, para. 22). Something else only applies if the testator has favored persons who are non-heirs through a condition or a legacy and for this reason there are authorized executors who want to enforce his will in their own interest.
5. How is a penalty clause in a will to be interpreted, according to which the testator instructs that the co-heir who, contrary to the testator's instructions, pursues the division of the estate loses his or her inheritance rights and only receives the compulsory portion?
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 the appointment of the inheritance.
In the opinion of the BGH, the instruction of a testator to make the validity of a testamentary gift dependent on the occurrence of a condition is not expressly regulated, but is generally recognized and arises from Sections 158 et seq. in conjunction with Sections 2074 et seq. BGB. A certain behavior can be used as a corresponding condition (BGH, judgment of June 24, 2009 - IV ZR 202/07 (OLG Munich),
6. What options are there for dividing the estate?
Probably the easiest way to divide the estate is to physically divide the estate items among the heirs, insofar as this is possible. In addition, the heirs or the executor of the will can sell the items of the estate if they cannot be divided and divide the proceeds of the sale among the co-heirs. In particular, if there is real estate in the estate, the sale appears to be a particularly suitable method of dividing the estate. If a co-heir has received a certain item of the estate, he or she can make a compensation payment to the other co-heirs.
If an amicable solution is in sight, the co-heirs can also conclude an inheritance distribution agreement. This agreement must be signed by all co-heirs and specifies how the money and valuables are to be distributed. However, the prerequisite for this is that the estate is ready for division. This means that all heirs and their respective inheritance quotas must have been determined and all liabilities must have been paid.
Furthermore, co-heirs can also sell their share of the estate without consent. However, it should be noted that co-heirs have a two-month right of first refusal to prevent third parties from entering the community of heirs and gaining influence. After the heir has concluded the purchase contract with the buyer, the co-heir receives the consideration agreed in the contract, which does not necessarily have to be identical to the value of the inherited share.
7. Is there a right to only partial settlement of the inheritance?
Only in a few exceptional cases can the community of heirs demand a partial settlement. Partial settlement is possible if all heirs agree on this. This case occurs relatively frequently in practice. Jewelry, cash and accounts are usually divided up first. Immovable property such as real estate is then distributed.
Incidentally, case law is extremely restrictive when it comes to partial distribution. For example, the Higher Regional Court of Koblenz stated in its ruling of 9.1.2013 that a partial division can only be demanded by co-heirs in exceptional cases if special reasons justify this and the interests of the community of heirs and the other co-heirs are not impaired as a result (Ref.: 3 W 672/12).
8. can I force the community of heirs to dissolve?
If co-heirs object to the division of the community of heirs, individual or several co-heirs can try to enforce their division plan for the entire estate in court by means of an action for the division of the estate.
The requirements for the action for division of the estate include
- It is important for the action for dissolution of an estate that the testator has not prohibited the dissolution of the community of heirs. If the testator has made such an arrangement, all co-heirs must agree to the dissolution, as described above.
- 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 claimant co-heir must submit a division plan that takes into account all heirs with a corresponding share of the estate.
- A further requirement is that the division plan must have been expressly rejected by a co-heir.
- In addition, indivisible items of the estate must have been converted into a divisible sum of money by means of a partition auction.
However, it should be noted that an action for partition is associated with considerable risks. If the inheritance has a high monetary value, the claimant(s) must advance the high legal fees and court costs incurred. In addition, proceedings can sometimes last for years. Furthermore, the court can only either accept or reject a claim and therefore cannot make any concrete proposals as to how the community of heirs should divide the estate.
It is therefore generally advisable to avoid an action for division of the estate if possible.
9. What should be considered if 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.
10. is there a deadline for the settlement?
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: "Any co-heir may demand the dissolution of the community of heirs at any time".
11. Is there a limitation period for the settlement?
The claim under Section 2042 BGB for 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.
12 Who bears the costs for the dissolution of the community of heirs?
As long as the cooperation with the co-heirs is peaceful and constructive, there are no costs. It is therefore advisable for the co-heirs to come to an agreement as peacefully as possible and find compromises that satisfy all parties involved.
If the parties involved decide to use third parties in the form of mediators, arbitrators, specialist lawyers, executors or other persons for the division of the community of heirs, corresponding fees may be incurred. If all parties involved agree to this, the costs incurred can be covered from the estate.
If the co-heirs have concluded an inheritance settlement agreement, the costs for the notary will be borne by the community of heirs.
If an heir decides to take legal action to settle the estate, the plaintiff initially bears the costs. If they fail with their action, they will not be reimbursed their costs. The only difference is if he is successful with his action, because the defendants then bear the costs.