If a property forms part of an estate, those entitled to a compulsory share are often told: „The money isn’t there; it’s tied up in the house.“ Whilst this explanation may be well-intentioned and often accurate in practice, it does not alter the legal situation. The statutory share arises upon the opening of the succession (Section 2317(1) of the German Civil Code (BGB)) and is due from that moment onwards (Section 271(1) BGB). Whether the assets are tied up in a property, a business or a call money account is a matter for the heir. If necessary, they must raise the money themselves, for example through a mortgage or a loan. They may only request a deferral in very limited exceptional cases, particularly if immediate payment would force them to give up the family home in which they live or to sell the business that forms the basis of their family’s livelihood. Nor can they order such a deferral themselves; this is decided by a court (Section 2331a of the German Civil Code (BGB)).
In practice, that sentence changes everything anyway. Whoever says it is sitting on a fortune and can afford to wait. Whoever hears it has a claim on paper and, in order to even be able to put a figure on it, must first pay out of their own pocket: the solicitor’s fees, the valuation report, the advance on court costs. A strong claim thus becomes a weak negotiating position, and both sides realise this quickly.
This is where litigation funding comes in. A third party covers the costs of enforcement and is only paid if money is ultimately recovered.
Key points at a glance
- It is not you as a person who is assessed, but your case. Your income, assets and creditworthiness are irrelevant, as litigation funding is not a loan and does not need to be repaid.
- The financier covers the costs of solicitors, court proceedings and expert reports, and, in the event of a loss, also any sums to be reimbursed to the other party. Financially, you will have no outstanding liabilities for the duration of the contract.
- The success fee is quantified before the contract is concluded and becomes payable when payment is actually made, including in the event of an out-of-court settlement.
- We only take on cases with clear prospects of success and a valid claim. A minimum claim amount is standard; for most providers, this is in the six-figure range.
- Your solicitor remains your solicitor. However, as a rule, you will no longer be able to decide on a settlement on your own, as the relevant contracts include a clause requiring your consent.
- If a quick settlement is worth more than the maximum amount, the claim may also be sold, as it is transferable (Section 2317(2) of the German Civil Code (BGB)).
The cost of waiting
Lawyers and courts base their fees on the value in dispute, i.e. the amount of the claim. As cases involving compulsory shares usually involve property, the values in dispute are high, and so are the fees, regardless of how straightforward the case may be.
For a claim of 100,000 euros, the lawyer’s letter of claim alone costs around 2,740 euros under the statutory fee schedule. If the matter proceeds to court, the court requires the court fees to be paid in advance – in this case, around 3,600 euros – and will generally only serve the claim once this advance payment has been received (Section 12 of the German Court Fees Act (GKG)). If the case goes to judgement, each side will incur legal fees of just over 5,200 euros. The losing party bears not only its own costs but also those of the opposing party (Section 91 of the Code of Civil Procedure). The risk in the first instance therefore amounts to around 14,000 euros; for a value in dispute of 200,000 euros, this rises to around 20,000 euros. If the proceedings end in a settlement, the court fee is reduced from three to one, and the costs are usually shared. Nevertheless, you must still factor in the full risk, as whether a settlement is reached is also decided by the other party.
Added to this is an item that may come as a surprise to many. Out of court, you can require the heir to determine the value of individual items in the estate, for example by obtaining a valuation report for the property. The costs are borne by the estate (Section 2314 of the German Civil Code (BGB)), which is advantageous for you, but not free of charge, as a smaller estate also means a smaller statutory share. In court proceedings, the situation is reversed. In such cases, the party who bears the burden of proof must pay the advance for the court valuation. Given the value of the estate, this is often you. If the advance payment is not made, the valuation will not take place (Section 379 in conjunction with Section 402 of the Code of Civil Procedure (ZPO)), and a claim that is otherwise justified will fail due to a lack of payment.
Representing oneself is only an option to a limited extent. Since January 2026, local courts have had jurisdiction over civil disputes up to 10,000 euros; disputes above this amount fall within the jurisdiction of regional courts, where legal representation is mandatory (Section 23(1) of the German Courts Act (GVG), Section 78 of the German Code of Civil Procedure (ZPO)). Most claims for a compulsory share are well above this limit.
And time is working against you. Cases that end with a contested judgement at the Regional Court took an average of just over 17 months in 2024. If the case goes to appeal, it takes considerably longer. In just under 16 per cent of these cases, more than four years elapsed between the filing of the claim at the Regional Court and the conclusion of the appeal proceedings. At the same time, the limitation period is running. The claim to a compulsory share generally becomes time-barred three years after the end of the year in which you became aware of the inheritance and of your disinheritance (Sections 195, 199 of the German Civil Code (BGB)). A letter in which you merely request information will not reliably meet this deadline. It is reliably upheld through serious negotiations and by bringing a claim (Sections 203, 204 of the German Civil Code (BGB)), which in compulsory portion law is usually a ‘staged claim’ combining a claim for information and a claim for payment in a single set of proceedings (Section 254 of the German Code of Civil Procedure (ZPO)). It is more cost-effective than it appears, as only the higher of the two linked claims counts towards the value in dispute (Section 44 of the German Court Costs Act (GKG)). The information stage therefore incurs no additional fees.
There is a way to prevent the heir from stalling, which you can use immediately and with no effort at all. As soon as you have demonstrably demanded payment from the heir, they are in default and owe default interest at a rate of five percentage points above the base rate – currently over six per cent per annum (Sections 286, 288(1) of the German Civil Code (BGB)). You do not need to specify the exact amount, as you will usually not even know it at that stage. The Federal Court of Justice clarified this early on (judgement of 6 May 1981, IVa ZR 170/80). Anyone who politely requests information and delays sending the demand for payment forfeits this interest month after month.
What litigation funding covers
A commercial litigation financier bears all the costs of enforcement – that is, lawyers’ fees, court costs and expert fees – and, in the event of defeat, also the costs to be reimbursed to the opposing party. If the case is successful, the financier receives a pre-agreed share of the amount awarded. If the case is unsuccessful, you will not be billed.
This isn’t a loan. There’s nothing to pay back – no interest, no instalments and no credit check. Unlike with legal aid, your income and assets are irrelevant. A good salary doesn’t exclude anyone, because the question isn’t whether you could come up with the 14,000 euros, but whether you want to put it towards family proceedings with an uncertain outcome.
Nor is it legal expenses insurance. The standard policies usually only cover inheritance disputes with a one-off consultation; specialised inheritance legal expenses cover is subject to a financial limit and has waiting periods of up to twelve months. Above all, however, a legal protection claim that has already arisen cannot be insured. A policy taken out only after the death has occurred will no longer cover that dispute.
And it is no substitute for a solicitor. The financier does not provide legal advice and does not conduct the proceedings. The retainer is between you and a solicitor – ideally one specialising in inheritance law. It would make sense for this solicitor to work on a contingency fee basis and to advance the costs. A contingency fee has in fact been permitted in individual cases since 2021, namely where you would be deterred from pursuing legal action without such an agreement (Section 4a(1), first sentence, No. 3 of the German Lawyers’ Fees Act (RVG)). Nevertheless, a solicitor is not permitted to cover your court costs, as professional regulations only allow them to do so in debt collection cases (Section 49b(2), second sentence, of the Federal Lawyers’ Act (BRAO)). You are therefore still responsible for the advance payment to the court. It is precisely this gap that a financier fills.
Which cases are funded
A financier does not accept every case, and that is part of the integrity of the model. They put their own money on the line and only get it back if the loan is repaid in the end.
Firstly, the prospects of success are key – in other words, whether your claim is clear-cut and the facts can be substantiated. Alongside this is the question of whether there is actually a substantial estate to back up the claim. And finally, the money must actually be recoverable. A large claim against someone from whom, in the end, nothing can be recovered will not be financed.
The most common reason why a case turns out to be larger than it initially appears is transfers made during the testator’s lifetime. If the house was transferred years ago, it has disappeared from the estate but may be partially included again via the claim for a supplementary compulsory portion (Section 2325 of the German Civil Code (BGB)). Conversely, some cases turn out to be smaller upon review because encumbrances or a reserved right of residence reduce the value. This question is therefore an essential part of a reliable assessment.
In addition, there is a minimum threshold, as the costs of assessing and covering small claims are not cost-effective. For most providers, this is in the six-figure range, though some set it significantly lower. The exact level of this threshold varies considerably. It is worth enquiring about this before you make any extensive preparations.
This selection process has a side effect that is often overlooked. A commitment also serves as an independent second opinion, as someone is staking their own capital on the assessment that your claim is enforceable. Conversely, a rejection does not mean that you have no case; rather, it highlights where the weaknesses lie. It makes more sense to ask about these than to invest your own money in a case without knowing its weaknesses.
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What you end up with
The success fee is agreed on a case-by-case basis and is determined by the amount of the claim, the level of risk and the expected workload. It is standard practice in the market to apply a degressive scale, meaning that the percentage decreases as the amount recovered increases. It becomes payable when funds are received. Upfront fees and ongoing costs are not part of a reputable offer.
However, two factors – which are rarely mentioned in promotional material – have a far greater impact on the final sum than the percentage figure alone. The first is the basis of calculation. Is the share calculated on the full amount won in court, or on what remains after costs have been deducted? The second concerns the costs that the opposing party must reimburse you if you are successful. As a general rule, these are paid back to the financier, as they were advanced by them, and do not reduce your share of the proceeds. Both of these points should be included in the contract and not left to verbal agreement.
What the tax office takes
Inheritance tax on the compulsory share does not become payable upon death, but only once you have made a serious claim for it against the heir (Section 9(1)(1)(b) of the Inheritance Tax Act). A mere request for information is not sufficient for this purpose; a demand for payment is, however, sufficient, and you do not need to specify the amount.
Whether tax is payable at all depends on the personal allowance. For children, this stands at 400,000 euros, and for spouses and registered civil partners at 500,000 euros. Grandchildren who take the place of a predeceased parent are also entitled to 400,000 euros (Section 16 of the Inheritance Tax Act). Gifts made to the same person during the preceding ten years are taken into account (Section 14 of the Inheritance Tax Act). The costs you incur solely in enforcing the claim – i.e. solicitors’ fees, expert reports and court costs – reduce the taxable acquisition value, provided appropriate evidence is supplied (Section 10(5)(3) of the Inheritance Tax Act). Neither case law nor the tax authorities have yet clarified whether a success fee is also included in this calculation. For larger sums, this issue should therefore be discussed with a tax adviser before signing any documents.
Who decides when a settlement is on the table?
Most cases involving the compulsory share do not end in a judgement, but rather in a settlement. In 2024, around one in four cases before the Regional Court was settled out of court; the proportion is even higher for out-of-court settlements. A settlement is therefore not the exception but the norm, and it is also the point at which your interests and those of the financier may diverge. You may wish to settle the matter and be left in peace. They may still see room for manoeuvre and wish to continue negotiations. Or vice versa.
That is why financing agreements almost always contain a consent clause. You may only enter into a settlement with the financier’s consent. The opposite scenario is also common. If you reject a settlement recommended by the financier, they may terminate the contract and demand to be placed in the same financial position as if the settlement had gone ahead. This is not unfair, as they bear the risk. However, you should be aware of this before signing the agreement, rather than only when an offer from the other party is on the table.
Other clauses fall into the same category. Lenders regularly reserve the right to terminate the agreement if the prospects of success in the proceedings take a turn for the worse, for example following an unfavourable expert report. The costs incurred up to that point are then usually borne by them, whilst all further costs would be at your expense. Another common practice is a security assignment. Legally, the claim is transferred to the financier, but economically it remains yours. They may only use it for the purpose specified in the contract, and if the security ceases to apply, they must transfer it back to you.
One point is regularly overlooked in this regard. As far as the court and the other party are concerned, you remain liable for the costs, even if a financier is paying in the background. They release you from liability internally, but do not take your place. That is why, ultimately, it is not only what is written in the contract that counts, but also who is behind it and whether this promise can still be honoured in four years’ time.
None of this affects your legal representation. The solicitor is bound to act in your best interests, not those of the lender. You should, however, be on your guard if the lender and the law firm are linked through staff or company law. A financing agreement in such a scenario has already been deemed invalid because it circumvents the prohibition on lawyers’ contingency fees (Higher Regional Court of Munich, judgement of 10 May 2012, 23 U 4635/11).
What must be included in the contract
There are four points you can check in a matter of minutes before signing, and they matter more than the percentage figure on the first page.
- How decisions are made regarding settlement offers, and what happens if you reject them.
- The conditions under which the contract may be terminated and who is responsible for the costs incurred up to that point.
- What applies in the event of a partial success, i.e. where only part of the claim is upheld.
- That the payment of the opposing party’s costs in the event of an unfavourable judgement is expressly provided for and has not merely been promised.
In the case of providers who purchase claims and collect them themselves, there is a fifth point to consider. Depending on the nature of the arrangement, this activity constitutes a debt collection service and therefore requires registration (Section 10 of the Debt Collection Services Act). You can check free of charge whether a provider is registered in the Legal Services Register maintained by the Federal Office of Justice.
If the payment is blocked or delayed
Normally, the statutory share is claimed from and paid out to the heirs in the usual way. Things become difficult if the information provided is incomplete, the value is set too low, or the matter drags on for years and every further step requires an advance payment. This is precisely when Erbfinanz can help. We can bear the cost risk of enforcement, so that you do not have to pay for solicitors, expert reports and court costs up front. Legal representation is always provided by a specialist solicitor. The fee is agreed on a case-by-case basis in advance and is only payable if the case is successful.
Your no-obligation enquiry is free of charge, confidential and takes just a few minutes to complete.
Finance or sell
Both approaches solve the same problem, but they trade one thing for another.
Financing relieves you of the financial risk whilst allowing you to retain your claim. It aims to achieve the best possible outcome and requires patience, as funds are only released once the heirs have paid. You will continue to manage the proceedings, produce documents, make decisions and, from now on, sit at the table with a second party whose consent you will need at one of the most crucial stages. That is the price you pay for someone else bearing the risk.
The sale reverses the order of events. You assign the claim, receive a fixed sum promptly, and that’s it. What happens to the claim afterwards is no longer your concern. The price is below the face value, as the buyer assumes not only the claim but also its duration, costs and risk. In return, there is no further correspondence, no expert assessment appointments and no legal proceedings.
| Standing up for yourself | Arrange financing | Sell a claim | |
|---|---|---|---|
| What you pay up front | Solicitor, legal costs advance, expert report | nothing | nothing |
| What you’ll pay if you fail | own and opponent’s costs | nothing, whilst the contract is in force | Not applicable |
| When money changes hands | following a settlement or judgement | following a settlement or judgement | shortly after the contract was concluded |
| What you need to hand in | unreimbursed expenses | a share of the profit | a discount on the nominal value |
| Who is leading the dispute | You and your solicitor | You and your solicitor | the buyer |
Which approach is right depends less on the outcome than on how much of the legal process you are prepared to put up with. A dispute over a compulsory share is not merely a matter of figures. It demands your attention for months on end, requires you to provide information about your own family, and keeps you in contact with people with whom many beneficiaries have long since cut ties. Those who can cope with this and have the time to spare will generally get a better deal by financing the process. Where speed or peace of mind are more important, selling is not a stopgap solution, but a practical decision based on careful consideration.
There is just one thing that is unfavourable in almost every situation. As the limitation period draws to a close, offers drop significantly, and a claim that has become time-barred can neither be enforced nor sold.
When a swift conclusion is more important than the last euro
Sometimes, drawing a clear line under the matter is more valuable than achieving the best possible outcome after months or years. In this case, you can sell your claim to a compulsory share to Erbfinanz and receive payment promptly, without having to settle the dispute with the heirs yourself. What happens to the claim afterwards is our concern.
We’ll discuss whether this approach is right for your situation during a no-obligation enquiry.
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Frequently Asked Questions
How much will litigation funding cost me if I lose the case?
Nothing, whilst the contract is in force. The financier bears their own fees, the court deposit and any sums payable to the opposing party in the event of a loss. This is the key difference from legal aid, where the state pays for your lawyer and the court costs, but you remain liable for the opposing party’s legal costs (Section 123 of the Code of Civil Procedure). However, if the financier withdraws because the prospects of success in the proceedings have deteriorated, you will once again be responsible for the costs yourself from that point onwards.
Will my credit history be checked, and will this appear anywhere?
No. This form of financing is not a loan; there is no obligation to repay it and, therefore, no credit check is carried out and no record is made with a credit reference agency. It is the case that is assessed, not the individual. Your income and assets are not taken into account.
Is the success fee still payable if we reach an out-of-court settlement?
Yes, and that is usually the case. Most cases involving a compulsory share end without a judgement. The insurer bears the risk from the moment the contract is concluded, even if the heirs suddenly back down because they realise that delaying matters is no longer of any benefit. If you only wish to insure the legal proceedings themselves, you must negotiate this explicitly.
Will I remain in control of my case?
From a legal point of view, yes. The solicitor is yours; the retainer is between you and him, and he is solely bound by your interests. When it comes to settlements, the answer is more nuanced, because the relevant contracts usually require the consent of the lender. The exact wording of this clause is one of the most important questions to clarify before signing.
My entitlement is below the minimum threshold. What options do I have?
Between a few tens of thousands of euros and the threshold for the major providers, there are essentially two options. One is to pursue the claim at one’s own expense, in which case the cost risk can be objectively weighed against the amount claimed. The other is to sell the claim, which generally involves lower thresholds. For those on low incomes or with limited assets, legal advice assistance and legal aid may also be considered, although legal aid usually has to be repaid from the money recovered following a successful outcome.
How long does it take for a decision to be made on funding?
That depends on how strong a case you can present. For an initial assessment, the will or the notice from the probate court, details of the family circumstances and a rough outline of the estate are usually sufficient. You do not need to provide a full set of documents. The clearer the picture, the quicker the decision will be made, and the better the terms will be.
What matters
The statutory share protects close relatives from being completely excluded from the family estate. It does not protect them from the fact that enforcing these claims costs money before it yields any. This sequence of events has long meant that legitimate claims have been settled for less than their value or abandoned altogether, often by those who would have needed the money most.
Financing turns the situation around, but it is by no means a sure-fire success. It costs a share of the profits, it requires a solid business case, and it brings a second party to the table whose interests usually – though not always – align with yours. Anyone who reads the contract carefully, rather than just looking at the percentage, will know afterwards exactly what they’ve got themselves into.
Whatever the circumstances, simply waiting is not the answer. The limitation period runs regardless of whether you can afford the dispute; the picture regarding the estate becomes less clear with every passing year; and you will only be entitled to interest on arrears if you have previously demanded payment from the heirs. The saying about the money tied up in the house does not alter your claim. It merely determines who can afford to wait.
Note on the content of this guide
The articles in this guide are intended to provide general information on inheritance law matters. They do not constitute legal advice and are no substitute for advice in individual cases. Whether a claim exists, and if so, to what extent, always depends on the circumstances of the specific case. Only a solicitor can provide a definitive assessment; in matters of inheritance law, this is usually a specialist solicitor in inheritance law.
All content is carefully researched and regularly reviewed. However, legislation and case law are subject to change. We are therefore unable to guarantee that the content is accurate, complete or up to date.
Note on the use of artificial intelligence
The articles in this guide are produced with the help of artificial intelligence and are editorially reviewed and approved.