Drafting a Will in Germany & the U.S.: Validity, Types & Taxes
1. The Importance of Drafting a Will
A will is one of the most important legal instruments to ensure that an estate is distributed in accordance with the wishes of the deceased. Without a will, German law provides for statutory succession, which frequently does not reflect the individual’s intentions. The same principle applies in the United States: in the absence of a will, the estate is distributed according to intestacy rules under state law.
A properly executed will allows:
Flexibility and Control: Determining who inherits, in what shares, and under what conditions.
Family Protection: Safeguarding spouses, children, or partners who might otherwise be disadvantaged.
Conflict Prevention: Clear provisions reduce the risk of lengthy disputes among heirs.
Tax Optimization: Strategic estate planning can reduce the burden of inheritance and estate taxes.
2. Validity of a Will in Germany
Under German law (Civil Code §§ 1937 et seq.), specific formal requirements must be met:
Holographic Will: Entirely handwritten, signed, and dated by the testator.
Notarial Will: Executed before a notary, offering the highest degree of legal certainty and evidentiary value.
Failure to comply with these requirements (e.g., a typed will without notarial certification) renders the will invalid. In the United States, requirements vary from state to state. Generally, two main forms are recognized:
Holographic wills (handwritten, in some states valid without witnesses).
Attested wills (signed in the presence of witnesses, usually two or more).
International cases require particular attention. The Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions facilitates recognition, but in practice, wills must be drafted to comply with both German and U.S. requirements.
3. Types of Wills in Germany
Individual Will: The most common form, drafted by a single person.
Joint Will or “Berlin Will”: Frequently used by spouses, where they appoint each other as sole heirs, with children inheriting after the death of the surviving spouse. While popular, this structure can lead to disadvantages in inheritance taxation.
Community Wills: Similar to the Berlin Will, available for spouses and registered partners.
Emergency Wills: Permitted in exceptional circumstances, such as imminent death, before three witnesses or the mayor.
In the United States, similar concepts exist, such as mutual wills or joint wills, but the approach is less formalistic. In addition, trusts are a common and highly flexible estate planning tool, often used to bypass probate proceedings and provide tax advantages.
4. The Role of a Will in Estate Administration
In Germany, the will directly determines succession. If no will exists, heirs usually must obtain a certificate of inheritance (Erbschein) from the probate court. A notarial will, however, can substitute for the certificate, saving time and costs.
In the U.S., the estate is generally handled through probate court. A clear will expedites the process and minimizes disputes. Without a will, the probate process follows statutory succession, which is both time-consuming and costly.
For individuals with assets in both Germany and the U.S., coordination is essential. A German will may require recognition in the U.S. and vice versa. This frequently involves additional legal proceedings in both jurisdictions.
5. Tax Considerations
Estate planning is not only about succession but also about minimizing tax burdens:
Germany: Inheritance tax (Erbschaftsteuer) depends on the relationship between testator and heir and the value of the inheritance. Spouses benefit from an exemption of €500,000, children from €400,000. Testamentary structuring—such as staggered inheritances—can optimize the use of allowances.
United States: The federal estate tax exemption for 2025 is over USD 12 million per person (subject to legislative changes reducing this threshold in the coming years). Several states also impose their own estate or inheritance taxes.
Cross-border cases: U.S. citizens inheriting in Germany or German citizens inheriting in the U.S. may face double taxation. The German-American tax treaty on inheritance and gift taxes mitigates double taxation, but careful structuring remains crucial to avoid disadvantages.
6. Conclusion
Drafting a will is a vital step in responsible estate planning. It ensures legal certainty, reduces conflict, and provides opportunities for tax optimization.
German law emphasizes strict formal requirements, whereas U.S. law provides greater flexibility, particularly through the use of trusts. For individuals with assets or family ties in both countries, dual compliance is essential. Only through coordinated planning can one ensure that the will is legally valid in both jurisdictions and that estate taxes are minimized.
Legal counsel is indispensable for cross-border estates, especially for U.S. citizens with property in Germany or Germans with heirs in the United States. A well-structured will protects assets, secures family interests, and ensures a smooth estate administration across borders.
Get timely, competent counsel to protect your inheritance and schedule a consultation.
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