Inheritance of a joint account

108 posts in this topic

3 minutes ago, LeonG said:

 

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.

 

Thanks for clarifying LeonG! At least that is somewhat comforting. :)

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7 minutes ago, Yessica said:

 

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. 

 

Can anyone clarify if there are legal repercussions for this?   @PandaMunich Can one just remove everything from Germany like this from a joint account when one account holder dies?  No way to do this in the UK. 

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2 minutes ago, snowingagain said:

 

Can anyone clarify if there are legal repercussions for this?   @PandaMunich Can one just remove everything from Germany like this from a joint account when one account holder dies?  No way to do this in the UK. 

 

I assume his parents could sue me and have a strong case. But that's only if I won't give them an inheritance, which I will if they want it.

 

Me having the money in Canada will probably be a better situation for everyone because I'll have access it, so we won't need to wait for the banks to unfreeze everything to get things done.

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I've transferred out 35K EUR from our joint accounts before, twice, without any problems from the bank. So I'll continue doing it this way until the account balance is 0. Fingers crossed it works.

 

Germany does not know he has passed away yet. His family leaves that up to me to report because they don't want to freeze my accounts without me being ready.

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There shouldn't be a problem if nobody complains. Even if somebody did complain it's not like you are stealing the money because it's your account so highly unlikely there would be any consequences.

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1 hour ago, snowingagain said:

Can one just remove everything from Germany like this from a joint account when one account holder dies?

 

Yes, since this is an ODER-Konto, i.e. either of the account holders can dispose of the money, so she can move all the money out of Germany: 

 

Only if the account had been only in his name would the account have been frozen as soon as the bank got to know about his death:

and Yessica would have needed a confirmation from the Finanzamt ("steuerliche Unbedenklichkeitsbescheinigung") as proof that she doesn't owe any German inheritance tax before she would be allowed to transfer the money out of Germany:

 

 

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@PandaMunichCould she avoid German Abgeltungssteuer if she didn´t sell the stocks in the brokerage account, deregistered from Germany and had the stocks transferred to Canada thereafter? Given that she has already sold some stocks she might have enough cash to be able to wait for the process to be finalised even if the account will be frozen initially.

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17 minutes ago, jeba said:

Could she avoid German Abgeltungssteuer if she didn´t sell the stocks in the brokerage account, deregistered from Germany and had the stocks transferred to Canada thereafter?

 

Yes.

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2 hours ago, Yessica said:

 

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. 

 

Just to be clear, a trust is a legality that has no limits in size or age.  Your portfolio account can be in a trust as can your home, both of which can be funded.  I urge you, or anyone, to investigate and understand before excluding.

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1 minute ago, catjones said:

 

Just to be clear, a trust is a legality that has no limits in size or age.  Your portfolio account can be in a trust as can your home, both of which can be funded.  I urge you, or anyone, to investigate and understand before excluding.

Exactly - We have a trust (for a special situation) with nothing in it, or perhaps $1, simply so it's in place if/when needed

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7 hours ago, catjones said:

 

Just to be clear, a trust is a legality that has no limits in size or age.  Your portfolio account can be in a trust as can your home, both of which can be funded.  I urge you, or anyone, to investigate and understand before excluding.

What are the implications of establishing a trust? Can you own it? Can you dissolve it as you please? What does it cost? Will it be recognised as part of your assets if you need to prove that you have any (e. g. when you apply for a mortgage or a residence permit which may only be granted by some countries if you can prove a solid financial background)? Will it have to pay tax on income derived from investments if you´re neither a US resident nor citizen?

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On 1/14/2020, 11:25:54, BethAnnBitt said:

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.

 

All of my U.S. retirement and brokerage accounts have designated beneficiary statements on file.  The beneficiary statement bypasses probate and is not affected by a will.  It is a good idea to review the beneficiary statements from time to time to make sure the distribution of funds is still valid.

 

There was a man in my organization who joined the same day I did.  The U.S. Government has beneficiary designation forms for unpaid salary, unused annual leave, accrued retirement pay, life insurance, and the Thrift Savings Plan.  These are mandatory forms and must be completed during the initial hiring action.  They can be modified at any time, but the HR folks won't let anyone leave for the day without completing the forms.

 

He specifically named his wife as the sole beneficiary on each of these forms, as I did for my wife on my forms.  An acceptable option would have been to not name her, but instead check the block "By Law".  The distribution of funds would still be outside probate and immune from any contrary statements in a will, but would have followed the legal succession for the next of kin.  Several years later, he and his wife had a nasty divorce, but he remarried about five years later.  Fast forward another 20 or 21 years, and he was killed in a car accident. 

 

Unfortunately for his current wife and children, he never updated the beneficiary forms for his federal benefits after his divorce or subsequent marriage to his current wife.  His ex-wife received all of his TSP account, his unpaid federal salary for the current pay period, the converted cash value of his accrued annual leave, the retirement deposit, and the value of his life insurance policy.  I don't know how much his TSP account was worth, but he maxed out his contributions every year, so with the maximum agency matching, he likely left an impressive chunk of inheritance.  Based on our own financial situation, some of us in the office estimated his ex-wife received about $900K in total.

 

Only he knows why he didn't update these important documents.  The ex-wife kept everything and the current wife couldn't challenge the beneficiary documents.  This was not a fun time in our office, but it caused everyone to review their documents.

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1 hour ago, JG52 said:

his ex-wife received about $900K in total.

as per his legal wishes

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6 hours ago, JG52 said:

Several years later, he and his wife had a nasty divorce, but he remarried about five years later.  Fast forward another 20 or 21 years, and he was killed in a car accident. 

I know of this case too!  However it was not a a nasty divorce, and he and the ex-wife had no children together.  And the ex-wife was wealthy in her own right.  The current wife, my friend, was raising 3 young children.  She searched and found the ex-wife who was in another state and explained the situation to her.  The ex-wife said "there must be some mistake.  He obviously meant that money to be for you and the kids."  And she sent a check for the amount.  My friend would have been up shit creek without that $500K for life insurance, nearly 25 years ago.  She used it to pay off the house so so she could afford to keep working 1/2 time while raising the kids alone.  WOW! to these stories.  Gotta be careful.

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On 1/15/2020, 12:22:53, Smaug said:

@catjones @BethAnnBitt Re trusts, in which country/countries? My understanding is that Germany doesn't offer or recognize trusts. Can a trust own German real estate for example?

I was interested and looked this up.  I think the trusts don't help in Germany and may make things worse.  In the US they are quite standard.  There's so much to be aware of and hopefully this discussion will help people individually take cae of things we would all rather avoid.

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5 hours ago, catjones said:

as per his legal wishes

Sounds like he just forgot to update.  That can happen easily.  My husband's former employer, a university, annually sent notices out to encourage updates to avoid this situation.

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12 minutes ago, BethAnnBitt said:

She searched and found the ex-wife who was in another state and explained the situation to her.  The ex-wife said "there must be some mistake.  He obviously meant that money to be for you and the kids."  And she sent a check for the amount.

 

That is beautiful. What a great lady.

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