Community of heirs

A community of heirs is automatically created when several people inherit together. What initially sounds like solidarity often leads to conflicts – from the administration of the estate to its fair distribution. Find out what rights and obligations apply to co-heirs, what options there are for dissolution and how fair solutions can be found.

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Community of heirs: rights, obligations and tips for heirs

An inheritance is often a double-edged sword: on the one hand, there is the joy of the material or non-material value of the inheritance; on the other hand, legal and interpersonal challenges can arise. It becomes particularly tricky when not just one person inherits, but several heirs together – in this case we speak of a community of heirs. It arises automatically as soon as several people become co-heirs, for example siblings, children or distant relatives.

From this moment on, the entire estate belongs to everyone jointly and important decisions must be made by mutual agreement. This applies regardless of whether it concerns real estate, bank balances, securities, company shares or personal items. It is precisely this obligation to make joint decisions that makes the community of heirs a particular challenge. Differing interests, financial needs or emotional ties to certain estate items can quickly lead to tensions. What at first glance appears to be a fair model – everyone inherits an equal share – can prove complicated in practice if there is no clear communication and a certain degree of willingness to compromise.

What is a community of heirs?

A community of heirs is created automatically as soon as several people are appointed as joint heirs, whether by will, inheritance contract or statutory succession. At this point, all co-heirs become joint owners of the entire estate. The special feature:

  • No one is the sole owner of a particular object.
  • Everyone owns a non-material share of the entire estate.
  • Important decisions usually have to be made jointly.

Example: If a deceased person leaves behind a house, cash and jewelry, everything initially belongs to the community of heirs. No co-heir can simply sell the house or keep jewelry without the consent of the others.

Rights of co-heirs in a community of heirs

German inheritance law grants all co-heirs certain rights in order to ensure fair administration of the estate:

  1. Right of co-determination:
    Each co-heir has an equal right to vote on decisions concerning the estate. For ordinary administrative acts (e.g. repairs, letting), a majority decision according to inheritance quotas is sufficient (Sections 2038, 745 BGB). Extraordinary measures (e.g. sale of a house, termination of a rental agreement), on the other hand, require unanimity of all co-heirs.

  2. Right to information and inspection:
    Every co-heir is entitled to comprehensive information and inspection of all estate documents, e.g. account statements, contracts or inventory lists.

  3. Right of use:
    Each co-heir has the right to use the items of the estate, provided that the joint use of the others is not impaired. However, no co-heir may dispose of or exclusively use estate items without the consent of the others.

  4. Entitlement to settlement:
     Every co-heir can demand settlement (division of the estate) at any time (Section 2042 BGB), unless it has been temporarily excluded by will or inheritance contract.

  5. Settlement by payment:
    A co-heir can sell his or her share of the inheritance to other co-heirs or sell it to third parties (Section 2033 BGB). The other co-heirs have a right of first refusal.

Obligations of the co-heirs

Those who inherit jointly not only take over the estate, but are also responsible for its administration and obligations.

  • Duty of administration: All co-heirs must administer the estate jointly, maintain it and act in the interests of all (Section 2038 BGB).

  • Cost sharing: Each co-heir must bear the costs of administration, maintenance and legal disputes in proportion to his or her share of the inheritance.

  • Liability for debts: Heirs also assume the debts of the deceased (Section 2058 BGB) and are liable for them as joint and several debtors; however, in the internal relationship in accordance with their inheritance share.

  • Duty of loyalty: Co-heirs are obliged to be considerate and loyal and may not make any unauthorized dispositions or take any unilateral advantage of the estate.

Why communities of heirs often lead to disputes

Communities of heirs are considered to be real hotbeds of conflict, as they often bring very different ideas and interests to the table. It is not without reason that they are also referred to as “temporary communities of necessity”. Disputes over real estate are particularly common: while one co-heir wants to sell the inherited house quickly in order to receive the proceeds, another may be planning to move in or rent it out long-term. In addition, there are often disparities in value – an old wardrobe may be a priceless memento for one person, but for another it may be just a bulky object of no great use.

Financial interests also play a role: some want to create liquidity quickly, others prefer to hold assets for the long term. Old family conflicts that quickly resurface in the course of an inheritance should also not be underestimated. It becomes particularly critical if a co-heir acts on their own authority or blocks the sale, as this can lead to expensive and lengthy legal proceedings in the worst case scenario.

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Administration of the estate

A distinction is made between ordinary and extraordinary administration:

  • Ordinary administration includes all measures that are necessary for the maintenance and ongoing use of the estate and do not entail any particular risks, e.g. repairs, the payment of running costs or the letting of a property. A majority decision based on inheritance quotas is usually sufficient for such decisions.

  • Extraordinary administration, on the other hand, concerns measures of major importance that permanently change or burden the estate, e.g. the sale of a property, the taking out of major loans or the liquidation of company shares. Such decisions can only be made with the unanimous consent of all co-heirs.

Dissolution of the community of heirs

As a community of heirs is often perceived as impractical, many co-heirs would like to dissolve it if possible. Dissolution, legally known as “settlement”, serves to distribute the estate and end the community. It can be carried out in various ways:

  1. Amicable settlement:
    The co-heirs agree on a division of the estate, e.g. one co-heir receives the house while the others receive money or other assets in return.

  2. Sale and distribution of the proceeds:
    The sale is often the simplest solution, particularly in the case of real estate, if no amicable takeover can be arranged. The proceeds are then divided among the co-heirs.

  3. Auction (partition auction):
    If no agreement can be reached, each co-heir can apply to the court for a partition auction. The property is auctioned off publicly and the proceeds are distributed among the heirs, albeit often at a financial disadvantage, as auctions usually end below market value.

  4. Compensation for individual co-heirs:
    One or more co-heirs purchase the inheritance share of another co-heir and in return assume their rights and obligations to the estate.

Tips for dealing with the community of heirs

  • Communicate at an early stage: Open and honest discussions create transparency and prevent misunderstandings.
  • Stay objective: As difficult as it may be, emotions and old family conflicts should be kept out of it.
  • Obtain specialist advice: A notary or specialist lawyer for inheritance law can help to find solutions before legal disputes arise.
  • Make clear agreements: Set out in writing how the administration of the estate, costs and use of the estate items will be handled. This creates commitment and security for everyone involved.

In legal terms, a community of heirs is a temporary association that requires complex coordination. If you know your rights and obligations, communicate them and seek professional support when in doubt, you can avoid many conflicts and ensure that an inheritance does not turn into a permanent family dispute.

Do you have further questions about the community of heirs?

Here you will find the answers to the most relevant questions about the community of heirs.

A community of heirs must reckon with various costs that arise in the course of settling the estate. These include the fees for the certificate of inheritance or the opening of a will at the probate court. Depending on the amount of the inheritance and the degree of kinship, inheritance tax may also be due. The ongoing expenses for the estate, such as the administration or maintenance of a property, must also be taken into account. In the event of disagreement, legal and court costs often arise from disputes or partition auctions. Finally, realization costs are incurred when assets are sold, such as estate agent commissions or notary fees.

It is not possible to withdraw directly from a community of heirs, as it is created automatically with the inheritance. Each co-heir remains part of the community until it is dissolved by a settlement. However, a co-heir can sell or transfer their share of the inheritance, either to other co-heirs or to third parties. In this case, the other co-heirs have a right of first refusal. In this way, you can de facto leave the community of heirs, even if there is no provision for a formal “exit”.

The shares result from the statutory succession or from the provisions in the will. Each heir receives a percentage share of the entire estate, not of individual items. For example, children can inherit equal shares, while a spouse often receives a larger share. These quotas are legally defined and also determine the voting rights within the community of heirs. In this way, it is precisely regulated who is entitled to which share of the overall inheritance.

In a community of heirs, each person entitled to inherit is individually responsible for their own inheritance tax. The tax is not calculated jointly for the entire estate, but on a pro rata basis according to the respective inheritance share. The value of the inheritance share as well as the tax class and allowances of the individual heirs are decisive. The tax office therefore issues a separate tax assessment for each person. This means that no one is liable for the inheritance tax of the other members of the community of heirs.

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