Inheritance of a joint account

108 posts in this topic

11 hours ago, PandaMunich said:

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.

 

Of course that should say:

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

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Two points:

1. I don't get (my ignorance of german law) the entire "inheritance" discussion.  You are the spouse and you have a joint account.  Who is to say that the entire account was or was not funded by you?  In America, if your spouse dies (unless a legal contract to the contrary eg.  Prenuptial, separate wills)  the surviving spouse gets control of the funds and the liabilities.  The money in your account is yours.   

2.  From what you've said, I would do two things:

     a.  Contact a Canadian broker (fidelity.ca, vanguardcanada.ca) and ask them if your DL account can be transferred.  If so, do so.

     b.  If not, contact a DL broker and tell them you want to open an account and transfer.  If they place restrictions, then sell per panda.

In any case, I would not divulge the death of your husband to anyone and treat it like any other transfer or sale.  The same with contacting a consulate or any other governmental body.  To do so may trigger a whole series of events that you may live to regret.

 

 

 

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40 minutes ago, catjones said:

Two points:

1. I don't get (my ignorance of german law) the entire "inheritance" discussion.  You are the spouse and you have a joint account.  Who is to say that the entire account was or was not funded by you?  In America, if your spouse dies (unless a legal contract to the contrary eg.  Prenuptial, separate wills)  the surviving spouse gets control of the funds and the liabilities.  The money in your account is yours.   

 

Legally, there are a couple of issues here. One is whether the estate is split according to Canadian or German law or possibly both. Another is once you've established where the estate is split according to which country law, what does the law state about whose money it is.

 

According to German law you can dispute who owns the money in the shared account but the default is probably 50/50 unless you can prove otherwise. According to German law his parents stand to inherit so if the bank knew that one account holder has died they may freeze the money until inheritance issues are clear. So taking the money and running is definitely possible but may not be quite legal.

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13 hours ago, lisa13 said:

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?

 

I would have to hire a lawyer to help me navigate the inheritance rules and to help me unfreeze my account once the bank knows of my husband's death. And I wouldn't have to pay capital gains taxes because I wouldn't be selling anything.

 

In Canada I pay 0% capital gains tax because of how I set things up. Yes it is legal.

 

I agree it's not productive to fixate on the capital gains taxes in Germany as I'll have to pay them sometime when I do sell. Mine and my husband's investment strategy was to sell off what we needed, when we needed - not have a massive, tax triggered sell-off.

 

I haven't spoken to my in-laws about inheritance issues for 3 reasons. 1) is that I just learned about the inheritance rules since posting this thread yesterday, 2) is that they only speak German and my German is very basic and 3) my husband *just* died.

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2 hours ago, catjones said:

Two points:

1. I don't get (my ignorance of german law) the entire "inheritance" discussion.  You are the spouse and you have a joint account.  Who is to say that the entire account was or was not funded by you?  In America, if your spouse dies (unless a legal contract to the contrary eg.  Prenuptial, separate wills)  the surviving spouse gets control of the funds and the liabilities.  The money in your account is yours.   

2.  From what you've said, I would do two things:

     a.  Contact a Canadian broker (fidelity.ca, vanguardcanada.ca) and ask them if your DL account can be transferred.  If so, do so.

     b.  If not, contact a DL broker and tell them you want to open an account and transfer.  If they place restrictions, then sell per panda.

In any case, I would not divulge the death of your husband to anyone and treat it like any other transfer or sale.  The same with contacting a consulate or any other governmental body.  To do so may trigger a whole series of events that you may live to regret.

 

 

 

 

I don't get why his parents would be entitled to 50% of his world assets, even when everything is joint with me. But apparently those are the German inheritance rules if you outlive your parents. Luckily we didn't end up buying a house together!!! 

 

My broker in Canada already rejected doing any in-kind transfers from Europe. 

 

I have to think about it some more, but now I am leaning towards selling and moving everything to Canada first, before dealing with German inheritance.

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After my father died, I joined my mother on all her accounts.  When she passed, as per her wishes,  I sold all the equities and transferred half to myself and half to my brother.  Done.  She also had a will stating the same.  While there were no contests or claims, they would have been denied.  If either myself or my brother felt that someone should have been included, it would have been out of generosity on our part.

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30 minutes ago, catjones said:

After my father died, I joined my mother on all her accounts.  When she passed, as per her wishes,  I sold all the equities and transferred half to myself and half to my brother.  Done.  She also had a will stating the same.  While there were no contests or claims, they would have been denied.  If either myself or my brother felt that someone should have been included, it would have been out of generosity on our part.

 

Having a will is soooo important. My husband and I don't have one. He was in his mid-30's and we never in a million years thought his life would be so short. He was really healthy one minute and then started going downhill FAST from the cancer.

 

We also thought that we had protected ourselves and each other by having everything in joint accounts. Apparently it has not protected me due to German inheritance rules. 

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Yessica, a will would have helped but not completely as you are not allowed to completely disinherit legal heirs in Germany. They must get at least half of what they should have so if there had been a will, a quarter of his assets instead of half.

 

I suppose the idea behind parents inheriting would be that they are losing a child who could have supported them in their old age. Children have a duty to support their parents in Germany. If a parent ends up in a nursing home for example they can go after the children to pay for it. 

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20 hours ago, BethAnnBitt said:

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.  

 

I can understand where BethAnnBitt is coming from. Quite a few years ago when my mom was grieving (my dad died of cancer)  she made some purchases when she shouldn't have and didn't do some things she should have in the first year after his death. She (and family) thought she was in her right mind, but she wasn't. She even said this a few years later-not that the OP would have the same problem, but I'd also suggest checking out all the angles, information, etc., which it appears the OP is doing, and just do what is absolutely necessary right now.

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One of my sisters has a ton of money.  She told me last week that her stocks went up $600,000 in value in 2019. (She worked for Boeing for forty years.) She has a will now, but neither she nor her husband had wills ten years ago when he unexpectedly died in his sleep Christmas morning.  She had to go through probate in Texas and couldn't sell anything because everything was in both their names; it took two years to get everything straightened out. I couldn't believe it - I have nothing, but I do have a will.

 

If any of you haven't made a will yet, make one soon. Yessica's story is too common.

 

@Yessica, I'm sorry this has happened.  I hope at some point there's a happy ending for you.

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21 hours ago, BethAnnBitt said:

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

I would regard moving the funds from banks / brokers which are under German jurisdiction an urgent priority though. Before they learn that your husband has passed away. And they most probably will because authorities will check account balances to assess inheritance tax.

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20 minutes ago, katheliz said:

One of my sisters has a ton of money.  She told me last week that her stocks went up $600,000 in value in 2019. (She worked for Boeing for forty years.) She has a will now, but neither she nor her husband had wills ten years ago when he unexpectedly died in his sleep Christmas morning.  She had to go through probate in Texas and couldn't sell anything because everything was in both their names; it took two years to get everything straightened out. I couldn't believe it - I have nothing, but I do have a will.

 

If any of you haven't made a will yet, make one soon. Yessica's story is too common.

 

@Yessica, I'm sorry this has happened.  I hope at some point there's a happy ending for you.

 

The laws sometimes are scary!

This reminds me of some work colleagues a few years ago from the UK.    They lived together many years but were not married.  They were told by a lawyer that as they had no will then whoever died first would leave their entire estate to the other. 

So f they were both killed in the same accident that the first person to die would leave everything to the other person, and if they also died in the accident that their family would then inherit everything.  So the family of the first person to die would get nothing.  Even if the time of death only differed by a single second! 

 

And that if they could not determine who died first, they it would be assumed that the oldest person died first!

 

So then they made wills.

 

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39 minutes ago, dj_jay_smith said:

So f they were both killed in the same accident that the first person to die would leave everything to the other person, and if they also died in the accident that their family would then inherit everything.  So the family of the first person to die would get nothing.  Even if the time of death only differed by a single second! 

 

There was a case back home where the couple were not married but the woman was a beneficiary on the man's life insurance. They died in the same accident but he died first. Hence the life insurance went into her estate and was inherited by her 3 children from a former marriage. If she had died first it would have gone into his estate and been inherited by his son from a former marriage.  The kids were all minors so the parents of the man tried to get some justice for their grandson but tough luck, that was the law.

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Just as an addendum: all my assets are in trusts.  The trustees are also my beneficiaries.  Trusts trump Wills.  I don't know if trusts in DL operate the same as in U.S.

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And we have wills, but our retirement accounts (US) all have designated primary and secondary beneficiaries for the same reason catjones.  The lawyer said that makes it all totally smooth.

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In my case, my parents paid for mine and my husband's expenses for the last 6-months (if not a year) of his life. I was his 24/7 caregiver. All of us thought he would survive. 

 

Now that he's died, of course my parents do not have entitlement to his estate but his parents do. His parents were not around during his illness and did not help us financially. But now they are up to receive quite a bit of inheritance if they so choose.

 

It really sucks. My Mom is upset that the $120K she gave us to put towards a house, is now partially up for grabs, as well as all my other life savings that I earned before I was married. I only jointed my husband on ALL of my finances because I sponsored him over to Canada and it made for a stronger immigration case (since I don't have a stable job or earn much money).

 

While his parents won't necessarily want the money from his estate, it does really put me in a liability situation that also stresses me out. I feel a bit like being in survival mode these days. Not just financially, but emotionally.

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2 hours ago, catjones said:

Just as an addendum: all my assets are in trusts.  The trustees are also my beneficiaries.  Trusts trump Wills.  I don't know if trusts in DL operate the same as in U.S.

 

I would love to have a trust but my estate isn't large enough to warrant one. I don't know anyone who is middle class and in their 30's, who have trusts set up for their spouses or dependents. 

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2 minutes ago, Yessica said:

It really sucks. My Mom is upset that the $120K she gave us to put towards a house, is now partially up for grabs, as well as all my other life savings that I earned before I was married. I only jointed my husband on ALL of my finances because I sponsored him over to Canada and it made for a stronger immigration case (since I don't have a stable job or earn much money).

 

In Germany marital property is not necessarily 50/50. Things like assets you had before you were married as well as gifts or inheritance you received during the marriage is private property.

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13 hours ago, jeba said:

I would regard moving the funds from banks / brokers which are under German jurisdiction an urgent priority though. Before they learn that your husband has passed away. And they most probably will because authorities will check account balances to assess inheritance tax.

 

I'm with you jeba. I'm in the process of moving everything over now. Tomorrow during market open, I should have made my first sale and will clear 30K EUR, then will move that first chunk over to Canada. 

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