A community of heirs can pose both complex legal challenges and emotional burdens. In this article, you will learn everything you need to know about communities of heirs, from the legal basics to the division and administration of the estate to possible conflicts and how to resolve them.
Table of contents
- Community of heirs: What is it?
- Legal basis and laws on community of heirs
- Establishment of a community of heirs
- Administration and representation of the community of heirs
- Liability and protection of co-heirs
- Divisional auction and settlement
- Sale of inheritance shares
- Conflicts and disputes within the community of heirs
- Mediation and arbitration of the community of heirs
- Conclusion and important advice on the community of heirs
Community of heirs: What is it?
A community of heirs is a legal form of inheritance that arises when several people jointly inherit an estate. The heirs form a community for the administration and settlement of the estate. The community of heirs is not a legal entity, but a community of joint owners. This means that the heirs can dispose of the estate only jointly and each heir has an ideal share in the total estate.
The community of heirs ends with the division of the estate or the disclaimer of the inheritance by all heirs. In the following, we will highlight various aspects of the community of heirs in order to provide a rough overview of this matter:
Rights of co-heirs: Co-heirs have certain rights in a community of heirs that arise from the law. These include, in particular, the right to information about the estate (§ 2027 BGB), the right to co-administration of the estate (§ 2038 BGB) and the right to a share in the fruits of the estate (§ 2039 BGB).
Duties of co-heirs: Co-heirs also have duties towards the community of heirs and the other co-heirs. These include the duty to properly administer the estate (§ 2038 BGB), the duty to bear burdens (§ 2046 BGB), and the duty to render accounts (§ 2028 BGB).
Example: In a community of heirs consisting of three siblings A, B and C, A inherits 50%, B 30% and C 20% of the estate. The co-heirs have the right to decide jointly on the administration of the estate and must bear the costs of maintaining and administering the estate in proportion to their shares of the inheritance.
Legal regulations: The community of heirs is subject to the regulations of the German Civil Code (BGB). Sections 2032 to 2046 of the BGB contain the basic regulations concerning the rights, obligations and administration of the community of heirs.
Court rulings: Over time, case law has made numerous rulings on communities of heirs that deepen and concretize the understanding of the statutory provisions.
For example, in a ruling dated October 24, 2018 (Case No. IV ZR 97/17), the German Federal Supreme Court (BGH) ruled that a co-heir who enters into a contract for the sale of a property belonging to the estate without the consent of the other co-heirs may be liable to the other co-heirs for damages.
Practical challenges: A community of heirs often presents practical challenges. These include identifying and valuing estate assets, distributing estate liabilities, resolving ownership issues and enforcing claims against third parties.
Example: A community of heirs consists of four siblings who jointly inherit an apartment building. In order to ensure an equitable division of the assets, they must determine the value of the house, take into account current expenses and potential liabilities, and reach an agreement on the future use or sale of the property. In the process, disagreements and conflicts can arise, making it difficult to reach an amicable solution.
Approaches to resolving conflicts: In a community of heirs, different interests of the co-heirs can lead to conflicts. Various legal instruments are available to resolve these, such as the division of the community of heirs (§ 2042 BGB), the partition auction (§§ 180 ff. ZVG) or the judicial determination of claims (§ 256 ZPO).
Example: In a community of heirs, two co-heirs may plead for the sale of a property belonging to the estate, while the third co-heir would like to keep the property. In order to find a solution to this conflict, the community of heirs may resort to the division of the community of heirs, the partition auction or a judicial determination.
Advice and representation by a lawyer: Due to the complexity of inheritance law and the community of heirs, it is advisable to seek the advice of an experienced lawyer for inheritance law in case of questions and uncertainties. An attorney can protect the interests of the co-heirs, minimize legal risks and help find a fair and amicable solution.
Legal basis and laws on community of heirs
The community of heirs is regulated in detail in the German Civil Code (BGB). In the following, the most important legal provisions and case law are explained in detail in order to provide a comprehensive understanding of the legal basis of the community of heirs:
1. statutory regulations: The most important statutory regulations for the community of heirs are found in Sections 2032 to 2046 of the German Civil Code. Here, the rights and duties of the co-heirs as well as the administration and representation of the community of heirs are regulated. Further regulations relevant to the community of heirs can be found in the area of inheritance law (§§ 1922 ff. BGB) and in the law on forced sale and forced administration (ZVG).
2. consent requirements: In a community of heirs, all co-heirs must in principle act unanimously (Section 2038 (1) BGB). This means that decisions can only be made with the consent of all co-heirs. Exceptions apply to measures of proper administration, where a majority decision is sufficient (§ 2040 BGB).
Example: In a community of heirs consisting of three co-heirs, two co-heirs wish to sell a property belonging to the estate. The third co-heir is opposed to this. In this case, the sale of the property cannot take place without the consent of the third co-heir.
3. division of the community of heirs: the division of the community of heirs is regulated in §§ 2042 to 2045 BGB. This is the process of dividing the joint estate among the co-heirs. The division can take place in various ways, e.g. by agreement, partition auction or court decision.
4. liability of co-heirs: The liability of the co-heirs for estate liabilities is governed by Section 2058 of the Civil Code. In principle, the co-heirs are jointly and severally liable for the estate’s liabilities. This means that each co-heir is liable for the entire liabilities, but only to the extent of his or her share of the inheritance.
Example: A community of heirs consists of three co-heirs who each inherit 50%, 30% and 20% of the estate. The estate contains debts amounting to 100,000 euros. The co-heirs are liable for these debts in the amount of their inheritance shares, i.e. 50,000 euros, 30,000 euros and 20,000 euros.
Establishment of a community of heirs
As a rule, a community of heirs is created by the death of the testator if several persons are appointed as legal or voluntary heirs. The formation of a community of heirs is subject to various conditions. The following explanations are intended to show the various paths that can lead to a community of heirs and to explain the associated legal principles:
Legal succession
If the testator does not leave a will or a contract of inheritance, the legal succession according to §§ 1924 ff. BGB (GERMAN CIVIL CODE). The legal heirs are divided into different orders. Relatives of the first order (children and grandchildren) inherit before relatives of the second order (parents and siblings) and so on.
Depending on the constellation, the surviving spouse or registered partner also has a claim to inheritance in addition to the relatives. A community of heirs arises if there are several legal heirs.
Example: Mr. Müller dies without a will. He leaves behind his wife and three children. In this case, the wife and the three children inherit jointly in accordance with the statutory succession and form a community of heirs.
Involuntary succession
The testator can determine who is to inherit his or her property by means of a will or a contract of inheritance. If the testator appoints several persons as heirs, a community of heirs is created. This can be done expressly or by implication, in that the testator specifies inheritance quotas or does not specify any inheritance quotas, from which the inheritance quotas result proportionately (Section 2091 of the Civil Code).
Example: In her will, Mrs. Schmidt names her two nieces and her nephew as her heirs in equal shares. In this case, a community of heirs is created consisting of the two nieces and the nephew.
Accrual of inheritances to several persons
If a person acquires several inheritances at the same time, this can also lead to a community of heirs. This is the case, for example, if a spouse inherits successively from two testators and the inheritances have to be administered jointly with the children.
Execution of wills
In some cases, the testator orders the execution of a will in his or her will (Section 2197 of the German Civil Code). This involves appointing a person (the executor) to administer and distribute the estate in accordance with the testator’s wishes. The execution of the will can also affect a community of heirs, for example, by taking over the administration of the estate for a certain period of time, during which time the co-heirs are restricted in their rights.
Court rulings
In the area of communities of heirs, there are numerous court decisions that specify the formation and legal consequences of communities of heirs. One example is the ruling of the Federal Court of Justice (BGH) of June 29, 2016 (Case No. IV ZR 474/15), which dealt with the question of whether a community of heirs created by a joint will can be regarded as the testator of another inheritance.
The BGH ruled that this is possible if the further succession occurs after the death of the first testator but before the final settlement of the first community of heirs.
Legal consequences of the establishment of a community of heirs
The establishment of a community of heirs entails various legal consequences. These include joint administration of the estate (§ 2038 BGB), the unanimity requirement for dispositions (§ 2040 BGB) and the liability of the co-heirs for estate liabilities (§ 2058 BGB).
Administration and representation of the community of heirs
The administration of a community of heirs is often a challenge, as several co-heirs have to make joint decisions about the assets. The most important aspects of the administration of a community of heirs and the associated legal principles are explained in detail below:
Principles of administration: the co-heirs administer the estate jointly (§ 2038 BGB). This includes in particular the preservation of the estate, the satisfaction of the creditors of the estate and the implementation of measures for the proper administration of the assets. All disposals of estate items generally require the consent of all co-heirs (section 2040 of the Civil Code).
Disposal of estate items: The co-heirs can only dispose of the items in the estate jointly (section 2033 of the Civil Code). However, a disposal by a co-heir of his or her share of the estate (e.g. sale or gift) is permissible, provided it is made effective vis-à-vis the other co-heirs (Section 2033 (2) BGB).
Administration in case of disagreement: If differences of opinion arise in the administration of the estate, a co-heir may apply to the court for a decision (Section 2042 of the Civil Code). The court can then make a ruling on the disputed issue that is binding on all co-heirs.
Rights and duties of the co-heirs: The co-heirs have the right to dispose of the estate jointly and to benefit from its proceeds (Section 2039 of the Civil Code). However, they are also obliged to meet the estate’s liabilities and to pay for the costs of administering the estate (§§ 2058, 2062 BGB).
Removal of items from the estate: The removal of items from the estate by a co-heir is generally inadmissible unless it is carried out with the consent of the other co-heirs or serves the proper administration of the estate (section 2041 of the Civil Code).
Liability of the co-heirs for administrative acts: In principle, the co-heirs are jointly and severally liable for administrative acts (Section 2058 BGB). This means that each co-heir is liable for the entire liabilities arising from the administration of the estate, but only to the extent of his or her share of the inheritance.
Termination of joint administration: The joint administration of the estate ends when the community of heirs is dissolved by dissolution (§ 2046 BGB). The dissolution can take place in various ways, e.g. through a mutual agreement, a partition auction or a court decision.
In summary, the administration of a community of heirs is a complex task that requires the cooperation and agreement of all co-heirs. The legal basis and regulations concerning the administration of a community of heirs can be found in the German Civil Code (BGB) as well as in the relevant case law.
In order to grasp and appropriately handle the rights and obligations of the co-heirs in the administration of a community of heirs, a deep understanding of these regulations is necessary.
Liability and protection of co-heirs
The liability and protection of co-heirs within a community of heirs are crucial aspects that affect both the financial and legal interests of the parties involved. This section discusses the basic aspects of liability and protection of co-heirs in a community of heirs:
Liability for Estate Liabilities: Co-heirs are generally liable for liabilities incurred in connection with the estate (Section 2058 of the Civil Code). In this context, they are jointly and severally liable, which means that each co-heir is liable for the entire liabilities, but only to the extent of his or her share of the inheritance. This liability also extends to any estate liabilities that arose before the inheritance (§ 1967 BGB).
Toleration and estate liability: In principle, the co-heir has a duty of toleration towards the creditors of the estate (§ 2059 BGB). This means that the co-heir must tolerate the seizure of estate objects by the estate creditor.
In addition, co-heirs are also liable for estate liabilities with their own assets (so-called estate liability) (Section 2057 of the Civil Code), but only if the estate is insufficient to satisfy the creditors and the claim was made in good time.
Protection of co-heirs: However, the co-heirs can protect themselves from excessive claims by creditors of the estate in certain cases. This includes, for example, the right to an administration of the estate (§§ 1975 ff. BGB) or the establishment of an insolvency of the estate (§§ 1980 ff. BGB). These measures protect the co-heirs’ own assets from access by creditors.
Divisional auction and settlement
The partition auction and the settlement are important steps in the termination of a community of heirs. This chapter explains in detail the various ways of settling the estate, including the legal basis.
Settlement by mutual consent
As already mentioned, the easiest and quickest way to end a community of heirs is by amicable settlement. In this case, it is important that all co-heirs agree to the partition and conclude a corresponding partition agreement (§ 2042 BGB).
Partition auction
A partition auction (Section 180 (1) ZVG) is a possible way of achieving a settlement in the event of disagreement between the co-heirs on the division of the estate. In a partition auction, estate items, in particular real estate and land, are sold by public auction and the proceeds are divided among the co-heirs. The application for a partition auction can be filed by any co-heir.
Judicial settlement
If the co-heirs cannot agree on a settlement and a partition auction is out of the question, it is possible to apply for a court settlement (Section 2042 of the German Civil Code). The competent probate court will then make a decision that is binding for all co-heirs.
Equalization claims in the event of a settlement
Equalization claims may arise among the co-heirs during the settlement (section 2050 of the Civil Code). These claims serve to ensure a fair distribution of the estate and are particularly relevant if individual co-heirs have already received benefits from the testator before the settlement.
Statutory regulations
The settlement of a community of heirs is governed by various statutory provisions in the German Civil Code (Bürgerliches Gesetzbuch, BGB), in particular by sections 2042 to 2059 of the BGB. These provisions contain regulations on the amicable settlement, the partition auction, the judicial settlement and compensation claims.
Sale of inheritance shares
The sale of inheritance shares is a way for co-heirs to withdraw from a community of heirs and realize their share of the estate. In this section, the sale of inheritance shares is examined from a legal point of view, with reference to examples, laws and current court rulings:
1. alienation to third parties: a co-heir has, in principle, the right to sell his or her inheritance share to a third party (§ 2033 BGB). The buyer then enters into the legal position of the selling co-heir and becomes a member of the community of heirs. The sale of the inheritance share must be notarized to be effective (§ 2371 BGB).
2. right of first refusal of the co-heirs: The co-heirs have a statutory right of first refusal in the event of a sale of the inheritance share to a third party (§ 2034 BGB). This means that the co-heirs have the right to acquire the inherited share on the same terms as the third party. The right of first refusal must be exercised within a period of two months after knowledge of the contract of sale.
3. requirement of consent: in some cases, the sale of an inherited share may require the consent of the other co-heirs. This is particularly the case if the sale would result in a detrimental change to the estate or would disproportionately disadvantage the other co-heirs.
Statutory regulations
The sale of inheritance shares is governed by various statutory provisions in the German Civil Code (Bürgerliches Gesetzbuch, BGB), in particular by sections 2033 to 2035 BGB. These provisions contain regulations on the sale to third parties, the right of first refusal of the co-heirs and the requirement of consent.
Court rulings
Case law has dealt with the sale of inherited shares in many decisions and has clarified the statutory provisions.
One example of this is the ruling of the Federal Court of Justice (BGH) of October 16, 1998 (Case No. V ZR 244/97), in which the BGH ruled that the right of first refusal of the co-heirs also applies if the selling co-heir sells his inherited share to a company in which he himself holds an interest. This serves to protect the interests of the other co-heirs and prevents circumvention transactions.
The sale of inheritance shares can be a sensible option for both the selling co-heir and the other co-heirs in order to realize their individual interests within the community of heirs.
Conflicts and disputes within the community of heirs
Conflicts and disputes within a community of heirs are unfortunately common, as different interests and ideas clash. However, there are many solutions to prevent conflicts from escalating.
Possible causes of conflict
Various factors can lead to conflicts within a community of heirs, such as disagreements about the administration of the estate, different ideas about the dispute, disagreements about the valuation of estate items or even personal differences between the co-heirs. A common problem is:
- Claims of the co-heirs: Conflicts within a community of heirs can give rise to various claims by the co-heirs, for example, claims for information and accountability (Section 2027 of the German Civil Code), claims for consent to administrative measures (Section 2038 of the German Civil Code) or claims for damages in the event of breaches of duty (Section 2058 of the German Civil Code).
Settlement of disputes in court
If co-heirs are unable to resolve their conflicts amicably, it is possible to seek judicial assistance. This can involve both clarification of legal issues and enforcement of claims. As a rule, the local courts are responsible as probate courts.
Conflict prevention
In order to avoid or minimize conflicts within a community of heirs, the co-heirs should ensure open and transparent communication, reach joint agreements and seek legal advice at an early stage if necessary.
Execution of wills as a means of resolving conflicts
One way to avoid or end disputes in a community of heirs is to appoint an executor (Section 2197 of the German Civil Code). This person is responsible for the administration and distribution of the estate in accordance with the testator’s instructions and ensures that the interests of all parties are safeguarded. The co-heirs are generally excluded from the administration of the estate during the execution of the will.
Inheritance contract as a preventive measure
An inheritance contract (Sections 2274 et seq. of the German Civil Code) can also help to prevent conflicts within the community of heirs by providing clear rules on succession, settlement and administration of the estate. It can also contain provisions on dispute resolution, such as the appointment of a mediator or arbitrator.
Overall, it is clear that conflicts and disputes within a community of heirs are a complex issue in which legal aspects play a central role. In order to prevent possible disputes or resolve existing conflicts, the co-heirs should inform themselves comprehensively about their rights and obligations and, if necessary, seek legal support.
Mediation and arbitration of the community of heirs
Mediation and conciliation are alternative procedures for resolving conflicts within a community of heirs without having to go to court. In this section, the basics of mediation and conciliation and their application in the context of communities of heirs are explained in more detail:
- Mediation: mediation is a structured, voluntary process in which the parties to the conflict work out a mutually agreeable solution on their own responsibility under the guidance of a neutral mediator (§§ 1, 2 Mediation Act). The mediator has no decision-making authority in this process, but merely supports the parties in finding a joint solution.
- Conciliation: Conciliation is a procedure in which a neutral conciliator attempts to resolve a dispute between the parties through mediation and proposals for conflict resolution. In contrast to mediation, the conciliator can also make a binding decision in certain cases if the parties so agree (Section 317 of the German Civil Code).
Advantages of mediation and conciliation
Both procedures offer a number of advantages over court disputes, such as less escalation of the conflict, faster dispute resolution, cost savings and greater flexibility in shaping solutions. In addition, the parties remain capable of acting during the proceedings and can continue to make joint decisions.
Legal regulations
The legal basis for mediation is regulated in the Mediation Act, while conciliation is governed by §§ 317 ff. BGB as well as in special laws such as the Arbitration Act or the Conciliation Act.
- Practical example
In a specific case, three siblings who formed a community of heirs disputed the division of an extensive property. They agreed to conduct mediation in order to find an amicable solution. In the course of the mediation, the siblings were able to disclose their different interests and concerns and finally agreed on a division of the property that was acceptable to all parties.
- Court rulings
There are also examples in case law where mediation and conciliation have been used successfully with communities of heirs. For example, in a decision dated April 21, 2005 (Case No. III ZR 265/04), the Federal Court of Justice (BGH) deemed the use of mediation in inheritance disputes to be permissible and sensible.
Conclusion and important advice on the community of heirs
A community of heirs arises when several persons jointly inherit an estate. The heirs are then co-owners of the entire estate and can only dispose of the inheritance jointly. The community of heirs can be dissolved by a division of the estate, in which the heirs agree on the distribution of the estate or draw up a division plan.
It is advisable to find out about the rights and obligations as co-heirs at an early stage and to seek an amicable solution.