Katja Habermann: “Bequeathing properly is an act of financial self-determination”

Although inheritance law regulates many things, inheritances often lead to disputes. It is estimated that around 10 000 families are affected in Switzerland. Almost one in five inheritance cases in Germany ends in dispute according to an Allensbach survey, and one in three in France. Why is this?
There have always been disputes over inheritance. And social change is making this issue even more complicated. Family ties are weakening, and family members are more often scattered across several countries. In addition to this, family structures have become more diverse – multiple marriages and patchwork arrangements are leading to a larger number of potential heirs. At the same time, we are growing increasingly older, which also entails more complex situations regarding estates. But the main reason for inheritance disputes is quite straightforward: Many people don’t want to think about estate planning. In Germany, for example, only 35% of the population have written a will according to a recent study.

Why is estate planning so important? Most of it is clearly regulated by inheritance law.
If you are married, only have children together, everyone gets along well, and your assets are modest, then you can do without a will. However, if your life differs even slightly – if you have already been married or have no children, for example – it is advisable to draw up a will.

A childless married couple has no direct heirs. So why would they need a will?
A common mistake made by childless couples is thinking that “There’s only the two of us, who else would inherit?” But this is often not the case. If there are no children, part of the estate will go to the deceased’s family. In Germany, the person’s partner usually receives only three-quarters of the inheritance, while the rest goes to their own relatives. If the couple owns a property, nephews and nieces can thus suddenly become co-owners. A will is therefore particularly important not only for childless couples, but also for single people who wish to designate beneficiaries outside the family.

Why do people have such a hard time with wills?
Because we would rather keep a sense of immortality than confront our own mortality. We shy away from discussing intra-family conflicts, which may well be necessary for estate planning. Moreover, our failure to do so will not have any personal consequences. After all, we won’t be there to see the damage. That will be for the heirs to deal with.

So it’s a case of the bigger the inheritance, the more arguments?
Where there is more to be gained, people tend to take their arguments to court – it’s more worthwhile, after all, as such proceedings are costly. But disputes can be found everywhere, even over very small things. A client of mine once filed a costly lawsuit regarding an old, worn-out tea service worth no more than 20 euros. This demonstrates that inheritance disputes are often not about money at all.

So what are they about?
In almost every argument I hear the phrase “It’s not about the money – it’s the principle.” Among siblings especially, it often concerns old, sometimes subliminal conflicts such as a feeling of being disadvantaged or less loved by their parents. An inheritance dispute is the last chance to resolve these conflicts.

How can these situations be avoided?
Everyone should decide for themselves what will happen to their estate. Ideally with a will. It should also be usual to draw up a power of attorney and an advance healthcare directive.

When is the right time to make a will? At 40?
Unfortunately, some people also die earlier. I would therefore advise people to make a will when they have children or assets at the latest. Ideally, however, as soon as they come of age. The earlier, the better.

Why should a childless person in their mid-twenties think about their estate?
That’s what a lot of young clients ask me. My answer to this is: Assume you are an only child and die together with your parents in a road accident. Without a will, your inheritance would go to distant relatives – people you may hardly know or even like. Instead, you can use a will to specify that, for example, your partner or best friend should benefit. Bequeathing properly is ultimately an act of financial self-determination.

Do I need to see a lawyer or notary?
No, a simple note is sufficient. It doesn’t even have to say “will”. What matters is that it is clear that this is your last will. For example: “My last will is for my daughter to be my sole heir.” Sign and date it – and it is a valid will. But beware: The will must be written entirely by hand. A signed printout or even a text that someone else has written for you is formally invalid.

And how do you write a good will?
I always recommend a test death.

Pardon?
You sit down either alone or with your partner and think about the following: What does this will mean if this or that person dies first? And what if it’s in a different order? You should consider all the conceivable scenarios and deaths to ensure that your own will is clearly defined in all cases. And you should look at your will again every five years and check whether it is still appropriate. There are always new aspects that you have not yet thought about.

Should you discuss the will with the heirs?
Yes. This allows you to explain your decisions, for example, why one heir will receive more than another. It also gives the heirs an opportunity to ask questions. This is no longer possible after the will has been opened. The problem then shifts to the next generation, and the inheritance can become a poisoned chalice.

Where should you keep your will?
The safest way is to store it with the probate court. It may not be found at home because it’s been so well hidden. Or it may get lost when moving to a retirement home, for example. Or a close relative who is not a beneficiary may even make it disappear.

Do you see a lot of this kind of thing within families?
More often than you might think. In one case, a nephew had moved in with his sick uncle shortly before his death. The uncle had kept his will at home. When the will was opened, it turned out that this nephew had been designated as the sole heir, although he had several nieces and nephews. That left a bitter aftertaste.

How often do you see parents wanting to disinherit their children?
Not very often, but it does happen. For example, because they are no longer in contact. Or because of disappointments that outsiders would find hard to understand. For example, who has not visited whom, when, and why.

Then you can state in your will that a child is to get nothing?
No, it’s nowhere near that easy. You can’t get rid of the statutory share. Many people therefore try to give away as much of their assets as possible during their lifetime, so that in the end there is hardly anything left for the child they don’t want to leave anything to. But you have to start doing this in good time – well over ten years before you die, otherwise the gift will be at least partially re-credited. However, there are some European countries that do not have a statutory share, such as the UK. If you move there, you may actually be able to make sure that a child goes away completely empty-handed.

Apart from the statutory share, what other major differences are there in Europe?
Inheritance taxes vary greatly. In France they can be up to 45%, while in Germany inheritances of up to 400 000 euros for children and 500 000 euros for spouses are tax-free. Switzerland, on the other hand, does not have any inheritance tax for direct descendants and spouses, but you pay wealth tax here every year. Then there are also national differences. For example, an Italian widow will inherit less if she has given birth to more than one child – clearly benefiting the descendants’ generation.

When do you need a contract of inheritance?
Unlike a will, a contract of inheritance is a binding agreement between several people. It is particularly necessary when there are more complex family situations, such as patchwork families. However, a contract of inheritance also makes sense for unmarried couples. the partner would otherwise receive nothing because they are considered to be “third parties” under inheritance law. Contracts of inheritance must be notarised, and can only be amended jointly by all the parties involved.

When was the last time you considered your own will?
Just recently. I have two children, and the younger one was originally not supposed to have access to his share until he turned 25. I wanted to make sure he was covered long enough to be able to stand on his own two feet. However, he is now at a point where I trust him to treat his inheritance responsibly at an earlier age.

Doesn’t it bother you to keep thinking about your own death?
No. Each time it feels like clearing out my mind. It’s like getting rid of old clutter. Afterwards, everything is clearer.