Inheritance Law in Denmark

and German-Danish successions

 Which law is applicable?

Which law is applicable given a case of succession affects both Germany and Denmark? For lack of a genuine „international inheritance law“, the applicable law is determined by the affected states themselves.

Denmark:

Under the terms of Danish customary law the “principle of domicile” engages. Consequently, the estate of a deceased person is administered in that country in which the person concerned was a resident at the time of death. A person is apprehended as a resident of that country in which he or she or the household of the person concerned has their permanent home; namely where the possessions are normally situated.

A similar result arises from the European Legislation. To facilitate cross-border-successions within the European Union, the European Parliament and the Council passed the Regulation of Successions (Regulation No 650/12), applicable to persons deceased on or after 17th, of August 2015.

Nevertheless, Denmark- as well as Ireland and England – does not participate in the European Regulation of Successions; all succession procedures handled by the authorities of Denmark will continue to be governed by national rules.

According to the EU Regulation, only one single criterion remains for determining the jurisdiction and the law applicable to cross-border successions, namely the last “habitual residence” of the deceased. Comparing the “habitual residence” with the Danish “domicile Principle” minor differences arise, especially with regard to the Choice of Law granted by the EU Regulation. The Danish Legislation does not provide a choice of Law.

Caution! The new law also applies to nationals of Denmark residing in any of the other member states of the Regulation of Succession (“Loi uniforme”, Art. 20). For example, if a Danish citizen resides in Germany, the Regulation will be applied.

Germany:

Regarding deaths before August 16th, 2015 according to German international Inheritance law, the law applied is that of the nationality of the deceased at the moment of his/her death.

Since Germany is a Member State of the European Regulation of Successions, concerning all deaths on and after August 17th 2015 according to the European Regulation of Successions, the law applicable to the successions is the law of the habitual residence at the time of death.

Thus, the application of the European Regulation of Successions led to an alignment of German and Danish international Inheritance law as the following examples may show:

1st Case: A Danish citizen deceased in Berlin; where he resided for the last fifteen years.

Due to Danish law (“domicile principle”) and German law (“habitual residence”) the estate of the deceased is administered in Germany under the German rule of law. Furthermore, the determined applicable law will govern the succession comprehensively.

2nd Case: A German citizen deceased in Copenhagen, where she lived for the last ten years.

Again according to Danish and German regulations, the estate is administered in Denmark (“domicile”/habitual residence). Subsequently, Danish Succession is applied.

3rd Case: A German citizen domiciled and deceased in Flensburg left real estate property in Esbjerg.

According to Danish law (“domicile principle”) as well as German law (habitual residence) the estate is administered in Germany, German Succession Law is applied.

Matrimonial Property Regime:

The matrimonial property regime, depending on the respective legal order, exercises a significant influence on the economic outcome regarding the distribution of the estate.

The statutory matrimonial property regime in Denmark is the “deferred joint property”.

Contrary to the German statutory matrimonial property regime (“Zugewinngemeinschaft”), which corresponds to a separation of assets, under Danish legal provisions the property owned by the spouses at the time they get married or acquire later on, merges into their joint property. These matrimonial property regulations may also have economic effects in favor of the surviving spouse (see below: “Interstate Succession”).

According to Danish international family law, the property relations between spouses are governed by the law of the country of the couples´ habitual residence at the time they get married. According to German international family law, the law of the spouses´ citizenship alternatively the law of the spouses´ habitual residence shall prevail.

 

Deviations from German Succession Legislation:

The Danish Succession Act (= Arvelov, hereinafter: ARL) differs from the German Succession Regulations as follows:

Intestate successions:

The Danish intestate succession regulations are – as well as the German regulations- determined by classes of beneficiaries (Ordnungen). Successors to the intestate property are the surviving spouse and the blood relatives. The relatives are classified in three classes according to the priority in which they take inheritance.

Concerning further details, I will be glad to provide comprehensive assistance.

Especially the right of Inheritance in favor of the surviving spouse differs from German regulations. The surviving spouse inherits half of the deceased´s property alongside the descendants of the deceased (Successions before 2008: one-third of the deceased´s property).

In case the spouses lived under the matrimonial property regime of “deferred joint property”, the rules on the division of joint property are also applicable if one of the spouses deceases. Before the Estate is distributed, the surviving spouse receives his/her share of the joint property.

Moreover, the surviving spouse may take an amount from the estate, when added to the surviving spouses´ succession and separate property.

In contrast to German regulations, the Danish Laws grant a stronger position in favor the surviving spouse.

Will and Succession Contract:

Comparable to the German regulations the Danish Succession laws entitle the testator to dispose of his estate by establishing a last will or alternatively a Succession Contract. Nevertheless, contracts concerning the transfer of an expected succession are invalid. A joint testament can be established by spouses, as well as couples living in a comparable situation.

A common testament solely derives a mutually binding effect, if a mutual binding effect is established by the parties.

Forced Heirship:

According to §§ 25, 26 ARL the deceased is not entitled to dispose of the compulsory portion by will.

In case, that testamentary provisions infringe the regulations concerning the compulsory portion, the Danish law does not require contest of the will, as such provisions are automatically invalid. Unlike the German legislation, the compulsory portion under Danish Legislation is formed as an obligatory portion. Subsequently, the beneficiaries hold a legal position as legal heirs.

In contrast to the German regulations solely, the spouse and the direct descendants are entitled to a compulsory portion of one-quarter of the intestate share, parents are not entitled as forced heirs.

In 2008, the amount of the compulsory share has been reduced to one-quarter of the intestate share. Furthermore, by will the forced share in the benefit of children under the age of 25 can be additionally reduced.

Succession Taxation:

Succession tax (boafgift) is payable where the estate is subject to probate in Denmark. In addition of the Succession tax an independent Estate tax may arise. Due to Danish Tax legislation the estate is a separate legal entity and thus, subject to taxation on income (including capital gains) from the estate assets. A tax of 50 % has to be paid on the deceased´s estate above a defined value (e.g. the profitable sale of a company belonging to the estate).

Do you need help? Please do not hesitate to contact me

Rechtsanwalt Torben Swane
German Probate & Wills Lawyer, Specialist in International Probate and Estate Planning

Kyffhäuserstraße 11
10781 Berlin-Schöneberg
Fax: + 49 (0) 30 26 47 47 – 10

Phone: + 49 (0) 30 26 47 47 – 0 / Email: info@erbrecht-berlin.eu

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