Under German law heirs inherit both, decedent’s assets and debts - unless they timely disclaim the inheritance.
German estate and inheritance law provides that decedent’s property and assets, as well as decedent’s debts and obligations, are transferred directly to the heir(s) by operation of law at the time of death. This is why you should consider disclaiming an inheritance if the estate in Germany is indebted.
German law assumes acceptance of an inheritance unless it is properly and timely disclaimed. You will not be asked if you would like to accept the inheritance and you are not required to accept the inheritance explicitly. It is your responsibility to find out whether an inheritance is worth accepting it.
Please note that you may accept an inheritance in Germany unintentionally. Certain acts such as disposing of decedent’s assets or accounts may imply acceptance. Once an inheritance is accepted you can no longer disclaim it.
Under German law an inheritance may only be accepted or disclaimed in its entirety. You are not allowed to accept an inheritance in part and disclaim the remainder.
In most cases no executor or administrator will be appointed if someone dies in Germany. It will be your own responsibility to determine whether the estate is indebted and to timely disclaim the inheritance.
Strict rules apply to disclaimers of inheritance in Germany:
· Under German law an inheritance must be disclaimed explicitly in writing
· Disclaimers of an inheritance in Germany must be notarized, your signature alone will not suffice.
· If you are in the United States and want to disclaim an inheritance in Germany you have to do so at a German Consulate.
· Acknowledgement of your signature by a US notary public is not sufficient. In Germany a notary (“Notar") is a government appointed lawyer, not just a professional witness.
· If you are not domiciled in Germany, or if you are abroad at the time of death, the inheritance can be disclaimed within six months.
· The six month period starts once you have knowledge of both the death and being an heir.
· It is your responsibility to file the disclaimer with the proper Probate Court in Germany within this period.
If you fail to timely disclaim the inheritance in Germany decedent's creditors may sue you and hold you personally liable for decedents debts. German money judgments are enforceable in the United States (which requires prior recognition by a court in the U.S.).
Since it will take time to find out whether decedent's estate in Germany is indebted, it is critical to act immediately once you have notice of being an heir in Germany.
If you effectively disclaim the inheritance you will be considered predeceased for purposes of settling the estate at issue. If you have children they automatically replace you in the line of succession.
Please note: The consequence will be that your children will inherit the debt unless they timely disclaim the inheritance as well. If you have minor children you (or both parents in case of joint custody) have to disclaim the inheritance on the children's behalf.