Pursuant to Section 1922 (1) of the German Civil Code (BGB), the estate is transferred in its entirety to one or more persons upon inheritance. The distribution and allocation of the estate assets usually takes place as part of the division of the estate. However, the testator can also make a division order within the meaning of Section 2048 sentence 1 BGB.
What is a division order?
In order to prevent later disputes between the co-heirs, the testator can stipulate a division order in their will in accordance with Section 2048 sentence 1 BGB. In particular, the testator can use a division order to allocate a specific item of the estate to a co-heir.
The execution of the division order requires the transfer of the object of the estate by the community of heirs to the individual heir designated in the will. The participation values and inheritance shares remain unchanged by the division order. However, the co-heir must allow the value of the object allocated to him/her to be offset against his/her inheritance share.
What is the difference between a division order and an advance legacy?
It is important to be able to differentiate whether the testator wishes to make a division order or an advance bequest, as these two orders can hardly be distinguished from the wording.
In contrast to a division order, the bequeathed object is not offset against the co-heir's inheritance share in the case of an advance legacy. Instead, the heir receives the object in advance. This means that the co-heir is in a better position than the other co-heirs with the same inheritance share.
Example:
Testator E leaves behind 90,000 euros in cash and jewellery worth 30,000 euros. He draws up a will with the following content: „My daughter T and my son S each inherit ½. Due to S's devoted care in recent years, he is to receive my jewellery.
If the testator had made a division order in this case, S would inherit the jewellery and cash in the amount of EUR 15,000 when the estate is divided. In this case, T would receive 45,000 euros.
If this arrangement constituted an advance legacy, S would have a claim against the community of heirs for the transfer of ownership of the jewellery. In addition, S is entitled to half of the cash assets.
The will of the testator to be determined in the individual case is decisive for the differentiation. In the example case, an advance bequest would have to be assumed due to the justification of years of care.
Can I also prevent or even prohibit the distribution of estate assets?
In principle, there is always the possibility that the community of heirs will be dissolved. However, the testator has the option of controlling the fate of the community of heirs through a prohibition on the division of the estate. In this way, the testator can prevent the estate or certain estate items from being divided as part of the dissolution of the community of heirs.
Pursuant to Section 2044 of the German Civil Code (BGB), the testator has the option to exclude or complicate the division in whole or in part by testamentary disposition.
The prohibition of division of the estate can be stipulated as an independent division order or in conjunction with such an order. Among other things, this can also be limited to certain items only.
It is generally recognised that the death of a co-heir cancels the validity of a prohibition of division. In addition, a prohibition of division ends after 30 years at the latest in accordance with the statutory provisions.