Inheritance of a joint account

108 posts in this topic

9 hours ago, Yessica said:

But I will ask the German Consulate whether German or Canadian inheritance rules apply to my husband's death for our joint-assets in Germany. I've bookmarked Panda's website and will contact her soon.

 

Don't do that (posted evidence on this forum is that consulates do not necessarily know the relevant laws).

 

Heed the above words of PandaM.

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I agree, the consulate probably will not know and may give wrong advice.  It would be better to consult with a lawyer specializing in matters of inheritance.  You might want to talk to a Canadian lawyer too.  Get them to work together.  There is a dual taxation agreement between Canada and Germany.  You can find it here:  https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/germany-agreement-1981.html

I don't see anything in it about inheritance though.

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2 hours ago, LeonG said:

 It would be better to consult with a lawyer specializing in matters of inheritance. 

 

Don't you believe what Panda wrote?

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1 hour ago, HEM said:

 

Don't you believe what Panda wrote?

 

This issue with all questions and answers posted on internet forums is that the OP often only reveals certain information.  So any answer, even from people like Panda who many on here know and trust because of her excellent advice, is only based on the provided information which might not be complete and might not include some seemingly obscure piece of information which is highly relevant.

 

A lawyer, accountant, or anybody hired professionally will dig deeper to find all the information and to find any obscure details, potential problems, loop holes, etc., and can therefore advise based on the full information.

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3 minutes ago, dj_jay_smith said:

A lawyer, accountant, or anybody hired professionally will dig deeper to find all the information and to find any obscure details, potential problems, loop holes, etc., and can therefore advise based on the full information.

I agree totally.  TT is a great place for getting some information and ideas about how to proceed, and recommendations for professionals, but not for final decision making.  I found this out in my own health insurance situation.  And I am learning that I will need further private professional advice about taxes and inheritance and wills and dying wishes details, etc. now that I have chosen to reside here.  That being said, I greatly appreciate the knowledge that's often imparted here.

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1 hour ago, HEM said:

 

Don't you believe what Panda wrote?

 

Sure but like dj_jay said above, hiring someone means that person is going to ask the right questions, figure out all the details and give her the advice she needs.

 

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20 hours ago, Yessica said:

 

The money is stored both in Canada and Germany, all in joint accounts with me and him.

 

I think I have a handle on the Canadian side, so my question is specifically about the German rules and accounts.

 

My husband died in Canada and we were resident in Canada the last 2 years, in case that makes a difference.

 

Please accept my condolences on your loss.

 

With regard to whether German or "Canadian" law applies, you need to be cognizant of two separate and distinct issues:

 

1.  Which law(s) apply with respect to inheritance/estate taxes (i.e. authority to tax)

 

2.  Which laws(s) apply with respect to succession to your husband's assets (i.e. who owns what and who gets what.)

 

On the issue of taxes you can take @PandaMunich 's advice to the bank.  Germany retains the right to enforce its succession tax on decedents who were either tax residents of Germany at death or citizens of Germany who left Germany less than 5 years ago.  Moreover, since at least some of the assets are in Germany, Germany can effectively enforce its rights - if the assets are still there when the bank learns of your husband's death.

 

But, because German inheritance taxes depend in large part upon the answers to the question of "who got how much?", that question has to be answered first.

 

On the issue of which law applies to the issue of who owns what and who gets what you need to be aware at the outset that this is not an issue of German vs. Canadian law but rather, German vs. the Canadian province of (fill in the blank) law.  In other words, there is no national Canadian law of inheritance but rather, only Canadian provincial law.  You did not say in which Province your husband was resident or died.  However, here is what appears to be an accurate of summary of the provincial intestate succession laws of Canada:  

 

https://en.wikipedia.org/wiki/Inheritance_law_in_Canada

 

As you can see, in the absence of children, the general rule is that a surviving spouse succeeds to the entirety of a deceased Canadian domiciled spouse's assets.

 

In addition, a provincial court will generally have jurisdiction to appoint you as the administrator of your husband's estate simply by virtue of the fact of his death there.

 

But the mere fact that a provincial court takes jurisdiction of administration does not necessarily mean that provincial law will govern the disposition of your husband's assets.  I cannot speak with authority on Canadian provincial rules governing choice of law (in Germany:  internationales Privatrecht) but my understanding is that all Canadian provinces and/or territories (other than, of course, Québec) are so-called common law jurisdictions like the 49 US states (other than Louisiana), England, Australia, etc.

 

The general choice of law rule in common law jurisdictions is that the law of the decedent's domicile at death governs the distribution of his personal property. (Personal property or "personalty" is generally anything other than real property or "realty", i.e. land.) 

 

The common law term "Domicile" is a term that is not easy to define and is often poorly understood. Worse, it can vary slightly from common law jurisdiction to jurisdiction.  In general it is defined as that place where a person is physically present when he simultaneously formulates an intent to reside in that place permanently/indefinitely and to return after any temporary absence.

 

A person is said to have a "domicile of origin" that is identical to that of his parents when he is born.  Once they reach the age of majority a person - perhaps like your husband - can acquire a different "domicile of choice", e.g. by standing with his feet on Canadian/Provincial soil and simultaneously formulating the intent to remain indefinitely/permanently and to return to Canada/Province following any temporary absence, eg. to Germany to visit, tend to sick relations, etc. In other words to acquire Canadian domicile of choice he must also simultaneously abandon his German domicile of origin.

 

Unlike "residence", under the common law a person can have one and only one domicile.

 

Because of the "intent" element, proof of domicile can get very complicated. Factors that will be considered include the length and duration of physical presence, official declarations, location of family, business, assets, social relationships, etc.

 

You did not mention owning any real estate in Germany so we don't need to discuss the fact that common law conflicts of law principles apply the succession law of the location (situs) of real estate to that item of a decedent's property.  Germany and other civil law jurisdictions (Québec??) generally do not apply what they refer to as "Rechtsspaltung" (split law). Fortuntely, this added level of complexity will not apply to your case.

 

The most obvious next question is "How do I settle all this?"

 

Since a local Canadian court appears to have jurisdiction and that's where you live it is the best place to begin even if, under Canadian law, your Canadian assets were owned by you and your husband "jointly with right of survivorship" or "jointly by the entireties" in which case you succeed to them by "right of survivorship" and may not need anything more than a death certificate to obtain sole and exclusive right to them.

 

You will, however, need something more than that to get your hands on your husband's half of your jointly owned ("Oderkonten") in Germany or anything else he may have owned there.  (Joint ownership with right of survivorship is unknown to German law. Rather, they apply a presumption of what common law lawyers would call a 50-50 "tenancy in common".)

 

You can attempt this without first going through Canadian "probate" administration by immediately filing an Application for a Certificate of Inheritance (Antrag auf Erbschein) using the services of the German consulate. (They'll help you fill it out and forward it to the correct German court.)  However, without a preliminary invocation of Canadian administrative jurisdiction and a subsequent judicial determination that your husband was a Canadian domiciliary at death, you run the risk that when your application for an Erbschein reaches the German Amts- Nachlassgericht of competent jurisdiction they will make their own determination of domicile.  If they decide it's still Germany then your husband's parents will be entitled to assert their forced share claim "Pflichtteilanspruch" against you.  And be aware:  the German court will notify your husband's parents of your application for an Erbschein and offer them an opportunity to contest it.  This will be true even if you already have a Canadian court's determination that your husband was a Canadian domiciliary and they arrived at that decision without first giving your husband's parents the right to be heard on the issue. (In other words, if you want to maximize the chance that a German court will recognize a favorable Canadian ruling, you must ensure that your husband's parents are given notice and an opportunity to be heard.

 

And remember, the German banks (if they have learned of your husband's death) will not let you - or anyone else - have the money until they receive 1) an inheritance tax clearance statement (Unbedenklichkeitbescheinigung) and 2) an Erbschein showing that the person seeking possession of the account is entitled to it by order of a German court.

 

Assuming you eventually satisfy the Canadians and the Germans that you are your husband's sole heir under Canadian law, then you can then wrestle with German inheritance taxes.  Because, as I noted at the outset, once you settle who gets what you then have to settle with the Finanzamt concerning the amount - if any - succession taxes will be owed and by whom.

 

I understand all too well the emotional turmoil that you must be going through and I am well aware of how unintelligible much of what I have written may seem to you.  For that reason, I urge you to start with qualified local (Provincial Canadian counsel) and then take it from there: Provincial court, German Consulate, German Court, German Counsel (if Erbschein disputed), Finanzamt (Steuerberater), Bank(s).

 

 

 

 

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I guess, from a practical point of view, since the bank doesn't know one account holder has died, if your husband was still alive, what would stop you from transferring  all the funds to another bank?  I suppose you could have set up your current account as "Jack And Jill" or "Jack Or Jill".  If it's the latter, I'd simply transfer my money.   

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14 minutes ago, catjones said:

I guess, from a practical point of view, since the bank doesn't know one account holder has died, if your husband was still alive, what would stop you from transferring  all the funds to another bank?  I suppose you could have set up your current account as "Jack And Jill" or "Jack Or Jill".  If it's the latter, I'd simply transfer my money.   

 

That's fine for accessing the money.  But doesn't mean that you don't still have to pay inheritance tax on it. 

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1 hour ago, dj_jay_smith said:

 

That's fine for accessing the money.  But doesn't mean that you don't still have to pay inheritance tax on it. 

 

Also doesn't mean that his relatives won't make a stink about his parents not getting a share.

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19 minutes ago, LeonG said:

Also doesn't mean that his relatives won't make a stink about his parents not getting a share.

But it can save a lot of hassle. I wish I had done that after my mom passed away. It took me almost a year to finally have the funds released. Once the bank knows that the account holder has passed away the account administration will be moved to the "Nachlassabteilung" and those guys can make you jump over a lot of hurdles. I had to deal with Consorsbank and sometimes I had to wait up to 9 weeks before I even got a reply other than "please be patient".

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2 hours ago, jeba said:

But it can save a lot of hassle. I wish I had done that after my mom passed away. 

 

When my dad died, I swooped in with his online banking and transferred all his money to mom's account. It was good to pay for the funeral and wake. I'm not sure how long it would have taken to get the funds released.

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Wow, I'm so grateful for all this advice.

 

It helps a lot to learn a bit more about what I need to do, what I should look out for, being careful of the Consulate, etc...

 

Yes I do plan on hiring a Canadian and German lawyer and/or accountant, as all of this is far too much for me to deal with during this grieving period.
 

Our net worth is held mainly in 2 joint brokerage accounts. One in Germany, one in Canada. So it's not easy to transfer over to my own individual account, because we are almost 100% invested in stocks. I guess I could sell everything off and have cash on hand, and then transfer the cash out. But that will trigger a massive tax withholding and I'd like to keep these assets invested in stocks for the long term. This is my retirement fund as I am freelance and am not able to work for a LONG time while I grieve.

 

I do not believe his parents will ask me for money. I know they could, but I hope they will not. Also they likely have much more than what my husband and I have as they are in their 60's and we are in our 30's. 

 

I have an appointment with the German Consulate soon to register his death. I'm thinking I should cancel this appointment if it's going trigger a massive problem with my finances. I haven't really organized myself yet and need to have some money to use in case I get blacked out. Does this sound good?

 

Also, I've never hired a lawyer before and have no lawyer friends! Are all these issues dealt with by lawyers? Like talking to my bank in Germany, helping me gain access to a possible widowers pension, dealing with the government? 

 

Thank you all again!!!!!

 

 

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Gahh I'm starting to think that placing everything in joint accounts wasn't as protective as I thought it would be.

 

When my husband and I first started these accounts years ago, we thought we were simplifying things and protecting each other because of the joint nature of our assets. What was mine was his and his was mine. Now, upon his death, it seems to have opened me up to possible liabilities. :( 

 

 

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6 minutes ago, fraufruit said:

Aha! Brokerage accounts and not bank accounts. Wish you would have said that in the beginning.

I thought I said it in my main post. It's held in joint Giro and Depotkontos. (Depotkonto being brokerage is my understanding).

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Sorry I missed that.

 

As far as I can see, your joint German investment account only requires that you pay 25% of your profits to the tax amt and it comes off automatically. At least Himself's does. The difference in Germany is that you can't claim any losses like you can in the U.S. Don't know about Canada. 

 

If you can, just sell everything here, cut your losses and start over.  You are in your 30's so plenty of time to earn when you are ready and if necessary. 

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21 hours ago, LeonG said:
1 minute ago, Yessica said:

Gahh I'm starting to think that placing everything in joint accounts wasn't as protective as I thought it would be.

 

When my husband and I first started these accounts years ago, we thought we were simplifying things and protecting each other because of the joint nature of our assets. What was mine was his and his was mine. Now, upon his death, it seems to have opened me up to possible liabilities. :( 

 

Your reasons were logical but the system you are dealing with is not unfortunately.  In the US we are advised to have joint accounts so that upon death, will or not, the surviving spouse has immediate access.  And it was the same when I was the guardian for my elderly father. Made it much simpler. 

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5 minutes ago, fraufruit said:

Sorry I missed that.

 

As far as I can see, your joint German investment account only requires that you pay 25% of your profits to the tax amt and it comes off automatically. At least Himself's does. The difference in Germany is that you can't claim any losses like you can in the U.S. Don't know about Canada. 

 

If you can, just sell everything here, cut your losses and start over.  You are in your 30's so plenty of time to earn when you are ready and if necessary. 

 

Yes the 25% is taken off the top. If I sell everything now that it's high, I won't have any capital losses but it does pain me to pay so much tax. 

 

You really think this is a good way to deal with this? Just sell everything in Germany and transfer it over to Canada? This never crossed my mind as an option until now. 

 

Ideally I had wanted to keep it in Germany and leave it there for the long haul. 

 

My brokerage in Canada does not accept in-kind transfers from Europe.

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Just now, Yessica said:

 If I sell everything now that it's high, I won't have any capital losses but it does pain me to pay so much tax.

 

Better than selling at a low...

 

Quote

Ideally I had wanted to keep it in Germany and leave it there for the long haul.

 

I would only consider that if you think you have a reasonable chance of returning to Germany to live.

 

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