Estate administration

If it is unclear whether the estate is over-indebted and you wish to accept the inheritance in principle, you should consider applying for an order of administration of the estate pursuant to § 1981 (1) BGB.

The administration of the estate legally separates the heir's own assets from the estate with retroactive effect on the inheritance. The estate is liable for liabilities of the estate, and the heir's own assets are liable for his own liabilities. The administration of the estate is quasi an administration of the estate for the purpose of satisfying the estate creditors. With the order of the administration of the estate, however, the heir loses the authority to administer and dispose of the estate according to § 1984 BGB. The authority to administer and dispose of the estate is now incumbent on the trustee of the estate. According to § 1985 BGB he has to determine the estate and the creditors of the estate. He may only satisfy creditors of the estate after his examination has shown that the estate is sufficient to meet all obligations. Only after satisfaction of the known liabilities of the estate may he leave the remaining estate to the heir. If the estate is overindebted, however, he must apply for composition insolvency proceedings.

According to § 1982 BGB, the application for an order of the administration of the estate can be rejected if the costs of the administration are not covered. In accordance with the provisions of §§ 26 (1) sentence 2, 207 (1) sentence 2 InsO, a dismissal for lack of assets is not made if a sufficient advance payment is made. If the application is dismissed for lack of assets, the heir has the possibility according to § 1990 BGB to refuse to satisfy a creditor of the estate to the extent that the estate is not sufficient.