In case you haven't heard, Germans are dying in record numbers, with population projections saying there will be about 67 million of them in 2050, down from the current 81 million.
That's great news for heirs, with 3 or so trillion Euros worth of money and stuff coming down the pipeline. Okay, make that "for some heirs" because many Germans won't inherit anything, while others receive a lot. None of this is surprising in the European country with the greatest wealth disparity.
What was surprising to us, though, is the relentless avalanche of chain letters sent to people who stand to inherit nothing but debt.
We had a hard time believing a typical lower middle class inheritance story told by some of "our" Germans, starting with a small but critical aspect of inheriting. Unless you decline an inheritance within six weeks, you are deemed to have accepted the inheritance. This includes any debt the dear departed has piled on during his or her lifetime.
What if the inheritance consists of more debt than assets?
The debt is yours, too. And if there is more than one heir, each of them becomes liable for the full debt despite being entitled to only part of the assets.
That may sound scary but German law has provisions that allow heirs to avoid being saddled with debt. The problem with these, though, is that they are tied to filing deadlines and require legal expert help. Lawyers and notaries around here are expensive, so even if you manage to avoid paying off the debts of a distant relative, you will easily run up several thousand Euros in expenses to accomplish this after "acceptance".
Declining an inheritance turns out to be not trivial.
While the letter notifying you of the passing of, say, great grandaunt Marge is a standard unregistered letter, you have to send a notarized statement to the probate court to decline the honor.
The German family currently in the "loop of death" received a notification a few weeks ago and read the fine print, which told them they could decline by a certain deadline and get their statement notarized for a small fee at town hall. The notification was not a surprise because several relatives had received and declined the very inheritance before. The aunt in question had been living in a retirement home for the last twenty years and was poor to being with, which means the inheritance consists of the accumulated cost of care for at least a decade. They estimate it at about 60 000 Euros.
Living on a small disability retirement income, saving money is important to the family, so they got their letter notarized at town hall and sent it back. Two weeks later the court sent a letter informing them that their request to decline the inheritance had been denied because their statement was invalid.
They sought the assistance of a notary (not to be confused with an American notary, German notaries have wider powers and are fully trained lawyers).
Why did the probate court decline our rejection?, they asked. It was certified by town hall, there is the seal and the signature! The notary explained that the clerk of the town had used the wrong stamp.
Kafka anybody? Unless a specific stamp is used, you may own huge debts.
After a week of extra stress and for a couple of hundred Euros, the notary sent the correct letter to the probate court.
Are your children over 18, the notary asked.
Yes.
Your children are next in line, and the court will contact them. We need to do a separate rejection letter for each one of them and they need to come in an sign in person.
We asked the family to go through the list of known eligible distant relatives of the old lady, and they came up with a tally of about ten of so third degree relatives. Assuming that some town halls know how to do a correct certification, our estimate of the total cost of not taking on the debt of the departed is around 2000 Euros if everybody manages to avoid the default "acceptance" and subsequent court costs to fight a tricky fight.
The next three or four decades look bright for German notaries and lawyers.
To sum it up: when it comes to private inheritance, the defaults are stacked against individuals. You can even move to another country for a few years and find you owe debt upon return if the statute of limitations has not expired.
Conversely, when companies "die", assets are distributed and any remaining debts are wiped out.
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