It is common that ownership of real estate is to be transferred between spouses…
Under German law, married couples are allowed to make a joint will. This is well known, but a major exception compared to other national legal systems, which in turn is less well known. In the vast majority of countries, such a (handwritten) will by two persons, in which the succession of two persons is regulated, is not permissible.
As a rule, the determination of the heirs of the two spouses in such a will is identical. The spouses appoint each other as sole heirs and the children as so-called final heirs (not subsequent heirs – be careful with the choice of words!) of the longer living spouse, regardless of who this is. If necessary, there are also legacies, a penalty clause for a compulsory portion, a so-called super legacy (yes, that’s really what it’s called), division orders, possibly an execution of the will, as well as regulations on the consequences of a divorce, a remarriage and the binding of the longest-living spouse to the regulations made or his or her release from them. So far, so good.
However, it is often overlooked in the case of joint wills of married couples that things can or rather should go differently, for example if there are children from different relationships. If this is the case, there is often an (understandable) desire to structure the inheritance of the children differently and to make it dependent on who the children are from. For example, if the husband has two children from a previous relationship and, together with his current wife, has one child in common, and there is a good relationship with all three children, it is possible that (1) the husband and wife may wish to provide for each other and (2) the wife may wish to transfer as much of her estate as possible to the child in common upon her death.
One way to achieve these goals is through a pre- and post-heirship, in which the decedent inherits his or her assets twice (also inherits twice for tax purposes!), first to the pre-heir and, normally, to the post-heir(s) upon the pre-heir’s death. However, I do not consider the pre- and post-inheritance to be a suitable means for such cases. In addition to the tax disadvantages, this arrangement, which is complicated in theory and practice, has considerable disadvantages for the preheir, who is not permitted to do many things, and it presents extremely difficult legal problems when it comes to its subsequent (even partial) cancellation, even if the preheirs and the postheirs agree among themselves. In my own estate planning, I only use the predecessor and successor inheritance in conjunction with an execution of the will in the case of a will for the disabled and a will for the needy, where it is fully justified for other reasons.
In the cases described here, it makes more sense to work with different successions for the two spouses. It would be possible, for example, for the wife to appoint the joint child as her sole heir and – if the child is still younger – to appoint her husband as executor. At the same time, she bequeaths to her husband the household effects, the inventory, the personal effects and the possibility of using the joint property or, more precisely, her co-ownership share in it.
In return, the husband can proceed in a mirror image, but does not only appoint the joint child as his heir, but all three children. Whether further assets are also transferred to the other spouse via the bequests in favor of the other spouse, such as a certain amount of money or a bank account, depends on whether and to what extent the longer-living spouse can support himself or herself financially.
Author: Dr. Klaus Krebs