A ruling by Germany’s highest civil court – the Bundesgerichtshof (BGH) – from March 22, 2023, illustrates the potential for unintended consequences from renouncing an inheritance (case ref.: IV ZB 12/22). Crucially, these consequences could have been avoided by preparing a will.
Testators should plan carefully for the transfer of their assets and not relinquish this responsibility to the rules of intestate succession. Drafting a will or a testamentary contract can ensure that the estate is distributed to the heirs in accordance with the testator’s wishes. Doing so can also spare family members a lot of a trouble, notes commercial law firm MTR Legal Rechtsanwälte.
The testator in the case in question did not prepare a will. As a result, his estate was inherited by his wife and their children as the legal heirs under the rules of intestate succession. Fortunately, this outcome did not lead to discord among the heirs. On the contrary, the children agreed that the mother ought to be the sole owner of the home, and they therefore decided to renounce their inheritance on the assumption that this would result in the mother becoming the sole heir.
But despite their good intentions, the children’s decision backfired. Rather than leading to the mother becoming the sole heir, renouncing their inheritance meant that the testator’s siblings became heirs instead of the children, as per the rules of intestate succession.
One of the sons tried to correct this error by challenging his repudiation of the inheritance. He reasoned that his decision had been informed by the mistaken belief that his actions would lead to his mother becoming the sole heir. However, his legal action was ultimately unsuccessful.
The BGH held that it was not possible to contest the repudiation of the inheritance on the basis of this error, as the error needed to be about the meaning or effect of the renunciation. The Court noted that this would have been the case here if the heir had been mistaken about the legal consequences of his decision to renounce the inheritance, when, in fact, it had the intended effect of him losing his status as heir. Indeed, he had only been mistaken about the indirect consequence of who would take his place as heir. These were deemed by the BGH to be insufficient grounds to mount a challenge on the basis of an error as to meaning or effect.
MTR Legal ’s team of experts advises both domestic and international clients on a wide range of issues relating to inheritance, including wills and testamentary contracts.