Depending on the type and extent of your own assets and family relations, there are different weighted interests in the shaping of asset succession to the next generation.
An interest in shaping the future follows on from a desire to preserve assets that you have created by yourself or those that have been held in the family for generations. There is the desire to preserve assets even in the event of illness or death, and to distribute them fairly to future generations, often taking into account tax optimisation.
The possibilities of the design of the asset succession are manifold and include transfer contracts for the regulation of lifetime transfers of individual items, anticipated succession, simple so-called “Berlin” wills between spouses, general and provisional powers of attorney for the avoidance of third-party care and protracted inheritance certificate proceedings. There also exist contracts of inheritance and foundation transactions and complex transfer contracts alongside company restructuring and adjustments to the articles of association.
On the one hand, the demands placed on the content of succession planning and its formal implementation are shaped by individual family circumstances, which themselves increasingly reflect social changes in family patterns. More and more frequently, succession arrangements also have to take special configurations into account, such as blended families or a person’s foreign earnings and their assets.
In addition, there exist legal interests that serve to protect and preserve assets. These may seek to avoid or reduce access such as third-party reclamation, including those based on social law norms or statutory compulsory partial and compulsory supplementary claims. Another interest in the shaping of asset succession may exist in the wish to restrict heirs’ access to assets. Frequently, for example, this occurs when assets include companies or company shares whose liquidity and continued existence should not be endangered by the heirs’ influence.
If, in addition to the interest in succession planning in the form of wills or contracts of inheritance, there are also company interests that belong to the testator’s assets to take account of, then the comprehensive design of asset succession requires not only knowledge of inheritance law, but also of company law. In some cases, certain configurations can only be regulated at company law level, or it may be more appropriate to do so, meaning that there is no further need to settle wills or contracts of inheritance. On the other hand, company law itself sometimes sets limits to the provisions of inheritance law in articles of association, such that, if necessary, corresponding provisions in wills or inheritance contracts become necessary, and possibly even supplemented by powers of attorney for relatives and/or co-entrepreneurs. It is therefore often necessary to harmonise company law agreements and inheritance law regulations in keeping with the needs of companies and entrepreneurs.
It is not uncommon for provisions in matrimonial law – on top of provisions in inheritance law – to be taken into account in the design of succession arrangements. The choice of the matrimonial property regime made can significantly affect inheritance issues, including tax issues. In giving comprehensive advice on succession arrangements, agreements on matrimonial property regimes through prenuptial agreements, which, in turn, also require notarisation, must also be considered.
In addition to the classic instruments provided by the German Civil Code and German company and corporate law for the structuring of asset succession through gifts, wills, contracts of inheritance and foundations, as well as the regulation of articles of association (which are dependent on the configurations of each individual case), provisions at the European level or international private law must also be observed in cases of an actual or even putative foreign aspect.
Our lawyers and notaries at LEONHARDT RATTUNDE also advise private individuals on the regulation of asset provision and succession, and have the necessary expertise to satisfy the special features of each individual case in structuring, if necessary in cooperation with clients’ tax advisors.
Succession arrangements often transcend aspects of inheritance law and can therefore also require in-depth knowledge of company law.