Inheritance of a joint account

108 posts in this topic

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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8 minutes ago, HEM said:

 

Better than selling at a low...

 

 

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

 

 

I don't consider living in Germany again.

 

Hmmmm. Would selling everything now and then transferring it over to Canada still require me to deal with German inheritance laws (if my husband's parents don't contest)? I don't expect they will contest.

 

That would be a big bonus to move things over. We have 160K EUR in our German brokerage, so according to Panda, I won't have to pay the inheritance tax in Germany since it's less than 500K EUR.  

 

 

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Sell high. Buy low. That is the way it works with investments. Why wait?

 

BTW, I consider these same things all the time in case something would happen to my German husband. I would cash in and run to the U.S. to be with my family if I could afford health insurance there. Not possible now. You are young and you are in Canada where the health insurance is much better.

 

I can't imgagine being in your position right now and I wish you all the very best.

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Just now, Yessica said:

 

I don't consider living in Germany again.

 

Hmmmm. Would selling everything now and then transferring it over to Canada still require me to deal with German inheritance laws (if my husband's parents don't contest)?

 

That would be a big bonus to move things over. We 160K EUR in our German brokerage, so according to Panda, I won't have to pay the inheritance tax in Germany since it's less than 500K EUR. 

 

 

If you need an accountant to help you figure out how to work out the taxes, Panda is an accountant. 

 

Legally I assume you should tell the consulate and bank that he died and continue from there. However since it's a shared account if you just take the money and run you'll get the same result with a lot less hassle. Probably that is what I would do.

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1 hour ago, Yessica said:

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

 

Can't you find a brokerage that does? 

 

If you sell and take the money a taxable event occurs, whereas if you transfer in kind to a new broker any cap gains remain unrealized and there's nothing to worry about. 

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2 hours ago, Yessica said:

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 should have told your German banks and depots that you moved away from Germany.

 

As a Canadian resident, you have to tax all capital income (interest, dividends, profit from selling shares/funds/bonds, and so on) from Germany in Canada, not in Germany.

In fact, you have to tax your worldwide capital income in Canada.

 

This is laid down in articles 10, 11 and 13 (6) of the double taxation agreement on income tax (DTA) between Germany and Canada: https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/Internationales_Steuerrecht/Staatenbezogene_Informationen/Laender_A_Z/Kanada/2002-03-27-Kanada-Abkommen-DBA-Gesetz.pdf?__blob=publicationFile&v=3

 

So tell the German banks/brokers that you live in Germany, get the profits from the sale without any German income tax deducted and declare it in your Canadian incone tax return, like the DTA obliges you to.

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@Smaug I assume I can't just open a new account under my name only, and then be able to transfer everything in our joint German brokerage account without my husband's consent.

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12 minutes ago, PandaMunich said:

 

You should have told your German banks and depots that you moved away from Germany.

 

As a Canadian resident, you have to tax all capital income (interest, dividends, profit from selling shares/funds/bonds, and so on) from Germany in Canada, not in Germany.

In fact, you have to tax your worldwide capital income in Canada.

 

This is laid down in articles 10, 11 and 13 (6) of the double taxation agreement on income tax (DTA) between Germany and Canada: https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/Internationales_Steuerrecht/Staatenbezogene_Informationen/Laender_A_Z/Kanada/2002-03-27-Kanada-Abkommen-DBA-Gesetz.pdf?__blob=publicationFile&v=3

 

So tell the German banks/brokers that you live in Germany, get the profits from the sale without any German income tax deducted and declare it in your Canadian incone tax return, like the DTA obliges you to.

 

Admittedly we didn't tell our bank/broker that we live in Canada. We continue to use my in-laws' German address for German bank purposes.

 

We obviously aren't accountants (!), so we thought it was okay to pay German taxes on our German investments, and Canadian taxes on our Canadian investments. We just didn't think much about it, until now when I am forced to.

 

Thank you so much for your help and advice!!!!!!!!!!

 

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Okay everyone, I really really really appreciate all this advice and chatting about these issues. It is helping me a lot.

 

Though it makes me sad, I think I will take your advice and sell off my stock investments in Germany, then transfer the cash over to a EUR account in Canada. 

 

My husband and I have nearly 160K EUR invested in stocks in our German brokerage account. 

 

Any advice on how I should liquidate and transfer to Canada? e.g. should I do it in 10K or 20K or 50K chunks? 

 

Anyone know if I will trigger any bank concerns by having a 'huge' transfer? Since my husband cannot consent to this mass movement, I don't want to cause problems. But I do want to have access to these funds.

 

Please note I'm not trying to evade paying inheritance to his parents, if they want it. But since I don't know German language or rules well, it's easier for me to have full access to my account and then distribute from Canada if necessary. I need to do what's easiest for me first, as I grieve.

 

Thank you again!

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33 minutes ago, PandaMunich said:

 

You should have told your German banks and depots that you moved away from Germany.

 

As a Canadian resident, you have to tax all capital income (interest, dividends, profit from selling shares/funds/bonds, and so on) from Germany in Canada, not in Germany.

In fact, you have to tax your worldwide capital income in Canada.

 

This is laid down in articles 10, 11 and 13 (6) of the double taxation agreement on income tax (DTA) between Germany and Canada: https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/Internationales_Steuerrecht/Staatenbezogene_Informationen/Laender_A_Z/Kanada/2002-03-27-Kanada-Abkommen-DBA-Gesetz.pdf?__blob=publicationFile&v=3

 

So tell the German banks/brokers that you live in Germany, get the profits from the sale without any German income tax deducted and declare it in your Canadian incone tax return, like the DTA obliges you to.

 

I can't change to my Canadian address without my husband's consent. In order to do it without his consent, I would have to register his death with the Consulate first, and then present the certificate to our bank/broker. Trying to avoid that so I don't get frozen out of my account for a year!

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Sorry to spam here.

 

I just calculated that if I sell my investments off now, our capital gains will be approximately 47K EUR

 

So 47K * 25% tax = 11750 EUR tax that is taken automatically. This is A LOT to me!! :wacko:

 

My in-laws are entitled to around 40K EUR. (which I will have to pay anyway even if I move everything over to Canada).

 

I'm thinking that maybe it could be worth it to go through this process with the inheritance + freezing of my German account for 1+ year, where my in laws get an opportunity to seek their share. I don't need the money immediately, and at least it'll still be invested rather than sitting in a Canadian account with max 0.1% interest.

 

Anyone know if it's realistic to assume lawyer's fees would be less than the 11750 EUR capital gains tax? 

 

If my in-laws do want their inheritance, at least a portion of it isn't lost to capital gains tax. Then people who my husband loved could benefit from the money, rather than getting absorbed by the government.

 

I am not against my in-laws taking an inheritance of 40K EUR if they want it, but I wouldn't like them to take any of my Canadian assets (which I can better protect on my end). 

 

Though I can't know for sure, there's also a good chance they won't want this money from me. They are financially stable and in their 60's. They are kind and reasonable people, like my husband was.

 

But if they want it, I will give it freely. If I have to pay someone, I would rather pay them than taxes. As long as the legal fees won't cost too much to sort out.

 

Any thoughts are appreciated. 

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I'm confused about the lawyer fee vs tax question. I don't see how a lawyer can help you avoid paying capital gains taxes. You're going to pay here or in Canada. Unless the Canadian rate is significantly less (it appears to be 50% of 50% of the gains - what the heck is that if not 25%?) I am not seeing a net positive result, tax wise, from hiring a lawyer but maybe I'm missing something about your question?

 

In a broader sense, consider that the only way to legally pay less in capital gains is to lose some part of your gains. I don't think it's productive to fixate on this unless you are seeking a way to minimize your net loss against all sources, and you know what those sources are. For that you'd be better off hiring an accountant, by far

 

The wild card seems to be whether or not your in-laws want to claim some part of the inheritance. Have you discussed it with them and if not, can't you simply do that before making any major decisions?

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1 hour ago, lisa13 said:

can't you simply do that before making any major decisions?

Yessica - I have lived through a tragedy of similar proportions, and one thing I learned was to try not to make major decisions hastily.  I would suggest doing the bare minimum that must be done, whatever that may be, and then holding off a bit.  There's just so much to have to think about and the thinking is just so difficult when it's all fresh.  My 10th anniversary is in 4 days and I could not have imagined it.  I want to say again that my heart goes out to you.  You sound young, brave, and strong.  Peace to you on this journey.

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7 minutes ago, BethAnnBitt said:

 I would suggest doing the bare minimum that must be done, whatever that may be, and then holding off a bit.  

 

What sort of advice is this?

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2 minutes ago, RenegadeFurther said:

 

What sort of advice is this?

It's pretty standard out there in the psychology world, but I just learned the good old fashioned way unfortunately.  In any case, the OP is clearly very intelligent and insightful, and I am confident that she will grieve and solve these problems very well.

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14 minutes ago, BethAnnBitt said:

It's pretty standard out there in the psychology world, but I just learned the good old fashioned way unfortunately.  In any case, the OP is clearly very intelligent and insightful, and I am confident that she will grieve and solve these problems very well.

 

You know that if you don`t really have anything to contribute you don`t really need to post.

 

There is no Toytown rule which says that you need to post in every single thread.

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3 minutes ago, RenegadeFurther said:

 

You know that if you don`t really have anything to contribute you don`t really need to post.

 

There is no Toytown rule which says that you need to post in every single thread.

Nor one that says you need to be a jerk either.

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12 hours ago, Yessica said:

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

Nor would a mere "proper" brokerage account allow you do any transfers if the recipient isn´t identical to the sender. That´s one of the differences between a bank brokerage account and a proper broker account. Banks are allowed to do that though.

 

If you deregister from Germany there will be no 25% tax withheld anymore as your dividends and interest will no longer be subject to German income tax (unless it´s from from German companies). So that might not be as much a problem as you may think.

 

12 hours ago, fraufruit said:

The difference in Germany is that you can't claim any losses like you can in the U.S.

You can, but you have to jump through hoops (like establishing your own finance management company).

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8 hours ago, Yessica said:

Any thoughts are appreciated. 

Regarding the pension you could ask at a Rentenberatungsstelle (free translation: pension advice office): (https://www.deutsche-rentenversicherung.de/Westfalen/DE/Kontakt-und-Beratung/Beratung-vor-Ort/Beratung_vor_Ort.html). You´ll probably need to make an appointment though and bring along all your paperwork. For that you shouldn´t need a lawyer. A lawywers initial consultation would cost you about € 240.- . Might make sense to use a lawyer specialising in taxes. You´ll find them at the website of your local Rechtsanwaltskammer (Chamber of Lawyers). You could also try to ask at the "Rechtsantragsstelle" of your local court (if they have that in your state). They actually aren´t allowed to give legal advice - but if you ask nicely they may do it anyway.  - for free. At least they did it for me as they couldn´t resist my charm offensive :rolleyes:.

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