In many families, things play out in a similar way. The parents transfer ownership of the house to one of their children whilst they are still alive, usually with the aim of clarifying the situation and avoiding disputes. The other children find out about it in passing, sometimes only after the funeral. And when it comes to settling the estate later on, there is hardly anything left. There are a few thousand euros in the bank account, plus the household contents. The actual assets have long since been moved elsewhere.
Anyone who finds themselves in this situation often assumes the matter is settled. As a rule, however, it is not. Inheritance law provides for a specific claim in precisely this situation, and this claim remains valid even if the transfer took place years ago. This page explains how it works, what its limitations are, and what the practical difficulties are.
Who is entitled to claim a compulsory share
Only the deceased’s children, their spouse or registered civil partner, and their parents are entitled to a compulsory share (Section 2303 of the German Civil Code (BGB), Section 10(6) of the Law on Registered Civil Partnerships (LPartG)). If a child has already died, their own children take their place. The parents are only entitled to a share if there are no descendants who can themselves claim a compulsory share or accept the inheritance left to them (Section 2309 of the German Civil Code (BGB)).
The deceased’s siblings are not included. When reference is made to siblings’ statutory share, this almost always refers to several children of the same parent. Their entitlement is based on the fact that they are children, not on the fact that they are siblings.
The classic scenario is where someone is excluded from the line of succession by a will or an inheritance contract. No explicit clause to this effect is required. Anyone who is simply not named in a will, even though they would have become a statutory heir had there been no will, is thereby already disinherited. Many of those affected believe they have not been disinherited because the word does not appear anywhere. In addition, there are situations where there is no exclusion at all. Anyone who has been appointed as an heir but with a share smaller than their compulsory portion may claim the difference (Section 2305 of the German Civil Code (BGB)). Anyone who has received only a bequest – that is, a specific item or a sum of money – without being an heir, has a choice of their own (§ 2307 BGB).
Everything else depends on the nature of this claim. The compulsory share is not a share in the estate, but a monetary claim against the heirs, and it amounts to half the value of the statutory share of the inheritance. Anyone who is only entitled to a compulsory share does not become a co-owner of the house and cannot have a say in what happens to it.
Transfer of ownership, gift and the Land Register
‘Transfer’ is an everyday term, not a legal concept. It refers to a situation where a person transfers their property to another person whilst still alive. The transfer agreement must be notarised (Section 311b(1) of the German Civil Code (BGB)). However, the recipient only becomes the owner once the transfer has been entered in the land register (Sections 873 and 925 of the German Civil Code (BGB)), and there may be a gap of several months between the two events. This will become important later on.
The vast majority of transfer agreements cover more than just the transfer of ownership. Often, the transferor reserves the right to live in the property or retains a right of usufruct. A right of usufruct means that they may continue to live in the house or let it out and keep the rent, even though it legally belongs to someone else. And often, in return, the recipient undertakes certain obligations, such as providing care, taking over the existing mortgage, or making a compensatory payment to their siblings. Both of these factors have implications later on, albeit in very different ways. Reserved rights of use determine whether a time limit begins to run. Considerations in return determine how much of the transfer is actually regarded as a gift.
Firstly, the basic principle applies. Anything that was transferred during the deceased’s lifetime no longer belongs to them at the time of death. The house is not part of the estate and is not included in the calculation of the standard compulsory share.
Supplement to the compulsory share: why the house that was given away still counts
If matters were left at that, the compulsory share could easily be circumvented. One would simply have to give away one’s assets in good time, and in the end there would be an empty estate from which no meaningful share could be calculated. This is countered by the claim to a supplementary compulsory portion (Section 2325 of the German Civil Code (BGB)).
For the purposes of the calculation, the value of the house that has been gifted is added back to the estate, as if it were still part of it. The statutory share is calculated on the basis of this increased amount, and whatever the beneficiary is already entitled to receive from the actual estate is deducted from it. What remains is the supplementary payment. This is paid in addition to the normal statutory share and does not replace it.
The ten-year period and the phase-out
This entitlement does not extend indefinitely backwards in time. For every full year that has elapsed since the transfer, ten percentage points are deducted (Section 2325(3) of the German Civil Code (BGB)).
- Not quite a full year has passed, 100 per cent
- a full year, 90 per cent
- two full years, 80 per cent
- five full years, 50 per cent
- nine full years, 10 per cent
- Ten full years; no further consideration
Everything therefore hinges on the question of when this period began to run. The law is not linked to the contract, but to the transfer of the gifted property. In the case of a property, this is, in principle, determined by the entry in the land register and not by the date of the appointment with the notary.
When the ten-year period does not commence
However, the entry in the land register alone is not sufficient to mark the start of the period. According to a landmark ruling by the Federal Court of Justice in 1994, the transferor must also cease to make substantial use of the house (Federal Court of Justice, judgement of 27 April 1994, IV ZR 132/93). Anyone who has not effectively severed their economic ties has not yet fulfilled their obligations under the law. Four categories of cases have emerged from this principle, which recur frequently in practice.
Usufruct over the entire house
If the transferor retains the usufruct of the entire house – that is, if they continue to live there or continue to receive rent from it – the ten-year period does not, as a rule, begin to run. The gift is then taken into account in full, even if it took place twenty or thirty years ago. Whether a transfer has actually been completed is therefore determined by the content of the transfer agreement and not by the date.
Right of residence in part of the house
Here, the situation is the reverse, and this is often misunderstood. A reserved right of residence does not automatically prevent the start of the time limit. The Federal Court of Justice only permits this in exceptional cases and requires an assessment of the individual case (Federal Court of Justice, judgement of 29 June 2016, IV ZR 474/15). What matters is what is stated in the contract, not who actually lived where. If the right of residence extends only to part of the house – for example, the ground-floor flat – whilst the recipient is free to use the rest, the time limit runs as normal. The situation may be different if the recipient is left with virtually no use of the property for themselves.
Transfer in return for a life annuity
If the house is transferred in return for ongoing payments to the transferor, this does not prevent the time limit from commencing. The Federal Court of Justice ruled on this in June 2026, thereby overturning the contrary view of the lower court. Nor does a real encumbrance – that is, a security interest registered in the land register to secure such payments – alter this (Federal Court of Justice, judgement of 24 June 2026, IV ZR 141/25). A claim for payment is simply not the same as continued use of the house. The situation is different only if the transferor has reserved the right to use the property in addition to the annuity.
Gifts between spouses
In the case of a gift to a spouse, the time limit does not begin until the marriage has been dissolved (Section 2325(3), third sentence, of the German Civil Code (BGB)). If the marriage continues until death, nothing is reduced, and the transfer counts in full. For children from a previous marriage, this is often the decisive factor. The fact that the transfer of a family home between spouses may be tax-advantaged is irrelevant in this context. Being tax-free and being protected against a compulsory share are two different matters.
What matters when it comes to a house’s value
A separate valuation rule applies to gifted items, and this often results in a lower value than those affected might expect. Two figures are compared. One is the market value at the time of death – that is, the price that could have been realised on the market at that time. The other is the value at the time of transfer, adjusted for purchasing power at the time of death, so that old and new amounts can be compared. The lower of the two figures is used (Section 2325(2), second sentence, of the German Civil Code (BGB)). As property prices in many regions have risen more sharply than the general cost of living, this is often the adjusted value from that time.
This gives rise to a second question, which is often misrepresented. A reserved usufruct or right of residence reduces the value to be assessed, but not in every case. If the value at the time of transfer is the deciding factor, the capitalised value of the right of use is deducted – that is, the value of years of use extrapolated to a lump sum. After all, the right existed at that time and reduced what the donee actually received. If, on the other hand, the value on the date of death is decisive, the deduction is not made, as the right of use had expired upon death. There is an explicit ruling by the Federal Court of Justice (judgement of 8 March 2006, IV ZR 263/04) in favour of this second approach; for the first, the deduction is in line with established case law.
A usufruct therefore has two effects, which run counter to one another. In many cases, it reduces the value to be assessed, but at the same time prevents the ten-year period from commencing in the first place.
Mixed gift where consideration was agreed
If the recipient takes over the remaining loan, undertakes to provide care, or pays their siblings a compensation payment – that is, compensation for them not receiving the house – then the transfer is accompanied by consideration. In legal terms, this is known as a mixed gift. In such cases, only the part that was genuinely a gift triggers the need for a top-up payment.
It is precisely this aspect that is the subject of dispute, as the parties involved have considerable leeway when it comes to assessing the value of their contributions. Among relatives in particular, exact calculations are rarely made, and case law accepts this in principle. However, if the value of the house is objectively disproportionate to what was promised in return – to an extent that goes well beyond a minor discrepancy – there is a factual presumption that both parties were aware of the proportion of the gift (on this standard, see Federal Court of Justice, judgement of 1 February 1995, IV ZR 36/94).
In this context, a maintenance obligation is not assessed on the basis of the actual costs incurred subsequently, but rather on the basis of what was to be expected at the time the contract was concluded, and is then extrapolated to a lump sum. If the comparison of values described above is added to this allocation, the calculation quickly becomes complicated. In such situations, this part is usually worked out by a specialist solicitor.
A calculation example
A widowed mother leaves behind two children. A good four years before her death, she transferred ownership of the house to her daughter without reserving any right of use for herself, and named her daughter as sole heir in her will. The son is not included in the will. At the time of her death, there were still 20,000 euros in the bank account; according to the rules set out above, the house is to be valued at 400,000 euros.
Without a will, the son would have inherited half; his statutory share is therefore one quarter. Based on the actual estate, this amounts to a standard statutory share of 5,000 euros. As four full years have passed since the transfer, 60 per cent of the value of the house is still taken into account, i.e. 240,000 euros. The calculation is therefore based on an estate worth 260,000 euros, even though only 20,000 euros are actually available. A quarter of this is 65,000 euros, and after deducting the standard compulsory portion, a supplementary payment of 60,000 euros remains. The total amount at stake is therefore 65,000 euros rather than the 5,000 euros that the estate appears to yield at first glance.
There is, however, one limitation. If the heir is themselves entitled to a compulsory share, they must ultimately retain their own compulsory share, and to that extent they may refuse to accept the supplementary payment (Section 2328 of the German Civil Code (BGB)). Anyone who, as in this case, has also been given the house usually gains nothing from this, because their own gift is taken into account (§ 2327 BGB).
Request information about donations
Without figures, it is impossible to quantify a claim. That is why the law grants the person entitled to a compulsory share a right to information from the heirs (Section 2314 of the German Civil Code (BGB)). This right covers not only what was still in existence at the time of death, but also any gifts that are relevant for the purposes of calculating the compulsory share.
Upon request, a notary must draw up an inventory of the estate. This is regarded as more reliable than a self-compiled list, as the notary must determine the contents of the estate independently and may not rely on the information provided by the heir. For items forming part of the estate, a valuation may also be requested; in the case of a property, this would mean a valuation report. However, this applies only to a house that is still part of the estate, not to one that has already been transferred. The costs are borne by the estate. As they reduce the value of the estate, they also have a proportional effect on the amount of the compulsory share.
It is often claimed that information may only be provided for the last ten years. This is not strictly true. The ten-year period limits the extent to which a gift is taken into account, but it does not limit the scope of the information that must be provided. Indeed, without this information, it is impossible to assess whether the time limit has begun to run.
There is also a right to information vis-à-vis the recipient of the gift, albeit a weaker one. This is not based on a specific provision, but on the general principle of good faith, and it presupposes that the beneficiary is, for excusable reasons, in the dark and that the recipient of the gift is able to provide the information without difficulty. In practice, therefore, the matter must be addressed through the heirs.
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Against whom the claim is made
The debtor is, in the first instance, the heir. He is liable to pay the standard compulsory share and, in principle, the supplementary payment as well, not only from the estate but from his entire assets. Both claims arise upon death (Section 2317(1) of the German Civil Code (BGB)) and, unless otherwise specified, are immediately due (Section 271(1) of the German Civil Code (BGB)).
A common misconception concerns the probate court. It opens the will and notifies the parties concerned, but is not responsible for the payment of the estate. The claim is made against the heirs and, if they fail to pay, is brought before the civil court.
Only where, in exceptional circumstances, the heir is not liable does the donee come into the picture (Section 2329 of the German Civil Code (BGB)). This occurs, for example, where the heir has effectively limited their liability to the estate, where they must retain their own statutory share, or where the person entitled to a statutory share is themselves the sole heir. The claim is then not for payment, but for the donee to allow enforcement against the gift. The donee may avert this by paying the outstanding amount (Section 2329(2) of the German Civil Code (BGB)). As long as the gift remains in their possession, their other assets remain unaffected.
Limitation period: how much time is left?
As regards the heir, the claim to the compulsory share and the supplementary claim are generally subject to a limitation period of three years, calculated from the end of the year in which the entitled person became aware of the relevant facts (Sections 195 and 199(1) of the German Civil Code (BGB)). For the compulsory share, these are the death of the testator and disinheritance. In the case of the claim for the supplementary share, the beneficiary must also be aware of the gift itself. If a person is unaware of the transfer of ownership, no limitation period begins to run in this respect. Irrespective of any knowledge, the right to claim expires at the latest thirty years after the death (Section 199(3a) of the German Civil Code (BGB)).
A different rule applies in relation to the recipient of the gift, and this is the more dangerous one. In such cases, the three-year time limit begins to run on the exact day the inheritance takes effect, regardless of whether the entitled party was aware of the gift (Sections 195 and 2332(1) of the German Civil Code (BGB)). Anyone who only finds out at a later date that the house was transferred years ago may therefore still have a claim against the heirs, whilst the route to the recipient of the gift is already blocked.
Common misconceptions and points of contention
„So that means I own part of the house.“ No. The compulsory share and the supplementary payment are monetary claims; they do not give rise to a share in co-ownership, and the entitled party cannot demand the property itself. However, if the debtor fails to pay at all, a court judgement may be enforced against their assets, including any land they own.
„It was a sale, after all, not a gift.“ What matters is not the heading of the contract, but the relationship between the consideration given and the consideration received. A nominal purchase price results in a mixed gift, and the gift element is taken into account.
„I received something myself at the time, so I’m worse off.“ That may be true, but not automatically. Gifts received by the beneficiary are set off against the statutory share when calculating the supplement (Section 2327 of the German Civil Code (BGB)). However, for such gifts to be set off against the normal compulsory share, the testator must have designated them as such at the latest at the time the gift was made (Section 2315 of the German Civil Code (BGB)). A subsequent provision in the will is not sufficient.
„There is no money available.“ The claim remains valid. Whether the heir takes out a loan or sells the house is up to them. Only in exceptional cases of hardship can they obtain a deferral of payment (Section 2331a of the German Civil Code), for example if they would otherwise have to give up the family home in which they live. This remains the exception.
Ultimately, the most common dispute centres on the value of the house, because every percentage point has a direct impact in euros. The empty estate mentioned at the start is therefore rarely the end of the story. Almost everything depends on what is set out in the transfer agreement and how long ago the transfer took place.
Frequently Asked Questions
The house was transferred to the new owner’s name twelve years ago. Is it really all over?
Not necessarily. The ten-year period only begins to run from the date on which the transferor has effectively parted with the property. In the case of a usufruct over the entire house, the period may never have commenced, and in the case of a transfer between spouses, it does not commence until the marriage is dissolved. In such cases, the relevant provisions are set out in the notarial transfer deed.
Does it matter to whom the house was transferred?
In principle, no. The law refers generally to a gift to a third party; this therefore also covers transfers to a grandchild, a child-in-law or someone outside the family. There are, however, two special cases. In the case of a gift to a spouse, the ten-year period does not begin until the marriage has been dissolved. Furthermore, anyone who has received a gift must have the value of their own gift set off against their entitlement to a supplementary payment (Section 2327 of the German Civil Code (BGB)).
The heir has sent me a list he wrote himself. Is that enough?
Such an inventory is permissible, but it must be complete. In addition, the beneficiary may at any time request a notarised inventory of the estate, which the notary will draw up independently. Any doubts regarding the private inventory are irrelevant in this regard. The value of individual items in the estate may also be determined separately. The costs of both are borne by the estate and not by the beneficiary personally.
Does my sister have to sell the house to pay me my share?
You cannot demand this, as the claim relates to money and not to the property. It is initially up to the other party to decide how the amount is to be raised, and this often amounts to a loan or payment by instalments. If no payment is made at all, following a court judgement, enforcement proceedings may be brought against the debtor’s assets, including any land they own.
What happens if the house has since been sold on?
This does not affect the calculation, because it is the value that matters, not who owns the house today. The claim against the heir remains unaffected. If, in exceptional circumstances, the donee is held liable, their liability is governed by the law of unjust enrichment, and it then depends on what assets they still have. The implications of this depend heavily on the individual case.
We agreed verbally at the time that I wouldn’t make any claims. Does that bind me?
A waiver during the testator’s lifetime requires a notarised agreement with the testator (Sections 2346(2) and 2348 of the German Civil Code (BGB)). A verbal agreement within the family does not satisfy this formal requirement. The situation is different if such a declaration is made only after the testator’s death. A claim that has already arisen may be waived informally; in such cases, the circumstances are decisive.
If the payout is blocked
Normally, a compulsory share is claimed from the heirs and paid out as a matter of course. Nobody needs any special help with this. Things become complicated when a property transferred during the testator’s lifetime is involved. In such cases, the estate inventory remains incomplete, the value of the house is disputed, and it often takes years for the matter to be resolved. Anyone who has to pay upfront for a solicitor, expert reports and court costs during this time sometimes gives up, even though they are entitled to their share.
This is precisely where Erbfinanz can help. If a claim needs to be pursued, Erbfinanz can cover the cost risk, so that the claimant does not have to pay the costs up front. Those who do not wish to wait that long can also sell their claim to Erbfinanz and will then be paid out promptly. And where a case requires review by a specialist solicitor, Erbfinanz refers clients to partner solicitors specialising in inheritance law. Erbfinanz is not a solicitor and does not enforce legal claims itself; the legal review and representation are always carried out by the partner solicitors.
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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.