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Compulsory portion supplement claim explained simply: Effects on the compulsory portion & gifts
Many people give away valuable property or large sums of money to other people during their lifetime. For disinherited children, this often comes as a great shock after death. As the assets have shrunk considerably as a result of such gifts, the pure monetary claim to the compulsory portion is initially shockingly low. To ensure that the estate cannot simply be emptied in this way at the expense of the disinherited persons, there is the right to a supplementary compulsory portion. This protective mechanism ensures that past gifts are treated in the calculation as if they were still part of the estate. Persons entitled to a compulsory portion should therefore always promptly request the actual heir to provide comprehensive information about all past gifts. It is precisely this information that can significantly increase your own entitlement to payment in the end.
Compulsory portion and supplement to compulsory portion explained briefly and clearly
The compulsory portion is the statutory minimum protection for close relatives under German inheritance law. It applies if a person excludes their own children, spouse or parents from the succession in their will. The amount corresponds to half of the statutory inheritance share. This is always a purely monetary claim against the heirs. Disinherited persons have no claim to certain items from the estate and no co-ownership of real estate. The basis for the calculation is the statutory compulsory portion.
The right to a supplementary compulsory portion extends this protection. It ensures that the deceased person's lifetime gifts are not disregarded in the calculation. All recognisable gifts from the last ten years are added back to the assets. On this basis, the monetary claim is calculated from a fictitious total value and increased accordingly. In this way, the law prevents the payment claim from being circumvented by the early transfer of houses, sums of money or company shares.
Typical signs of such shifts in assets are contracts from the notary, large bank transfers or rent-free living with relatives. However, banks and land registries do not provide disinherited persons with any information about this. Anyone who suspects such transactions must request the information directly from the heirs via the statutory right to information and have their own claim for a compulsory portion supplement calculated. It is often only when these past gifts are taken into account that the full amount due under the law is paid out.
A practical example illustrates the calculation: A father transfers a house worth 300,000 euros to his daughter five years before his death and the son is disinherited in the will. When calculating the son's monetary claim, fifty per cent of the value of the house is added to the estate. This proportion results from the legal requirement that gifts lose ten per cent in value each year for the calculation. This fictitious addition significantly increases the disinherited son's claim to payment.
Who is authorised?
In principle, the same persons who are entitled to claim the regular compulsory portion are entitled to the supplementary compulsory portion. According to the legislator, this primarily includes the following relatives.
- Natural and adopted children and illegitimate offspring
- Grandchildren in the event that their own parents are already deceased
- Surviving spouses or registered partners
- The parents of the deceased person, if there are no direct descendants
Interestingly, this right is not limited exclusively to completely disinherited persons. Even those who were included in the will but end up receiving less in value than the actual compulsory portion can request an increase. The only mandatory requirement for this is that relevant assets were given away in the last ten years before the death and the remaining estate is smaller as a result.
In very rare exceptional cases, this protective mechanism does not apply at all. This happens, for example, if the compulsory portion has been officially and effectively withdrawn from the person concerned or if there is a so-called ineligibility to inherit. However, such harsh consequences only apply in the event of demonstrably serious misconduct towards the deceased person.
It is always important to emphasise the legal nature of this protection. Without exception, it is purely a monetary claim against the actual heirs. Those entitled to a compulsory portion never have the right to demand specific tangible assets or co-ownership of real estate from the estate. The aim is always purely financial compensation in the form of a payment claim.
A typical scenario from practice shows this interaction very clearly: A father with three children disinherits one of them by will and transfers a valuable property to another child five years before his death. As a result, the available assets for the later inheritance shrink massively. In this situation, the disinherited child not only claims the regular compulsory portion. He or she also asserts a claim to a supplement to the compulsory portion from the heirs and thus secures a higher cash payment, which mathematically offsets the past gift of the house.
Gifts and the amortisation after ten years
Gifts made by the deceased person within the ten years prior to death are decisive for the addition to the compulsory portion. These assets are mathematically added to the estate. The payment claim of the disinherited relatives is thus determined from a fictitiously increased total value.
The law sets out a clear rule here. For every full year between the transfer of assets and the date of death, the chargeable value is reduced by exactly ten per cent. If the transfer took place five years before death, only half of the value is included in the calculation. After ten years, the credit for the monetary claim is cancelled completely.
There are some important exceptions to this deadline:
- If assets are transferred between spouses, the ten-year period does not begin to run until the marriage is dissolved by divorce or death.
- If the person making the gift retains a usufructuary right or a lifelong right of residence, the period also only starts when this right of use ends.
- If there is a consideration for the transfer, this is referred to as a mixed gift. In this case, only the purely gratuitous part counts towards the subsequent payment claim.
An additional note concerns immovable assets such as real estate: The so-called lowest value principle applies here. The value at the time of the gift is compared with the value on the date of death and the lower of the two amounts is always used for the calculation.
Valuation of the assets given away
The exact value of the gift at the time is decisive for a correct calculation of the supplement to the compulsory portion. The law stipulates the so-called lowest value principle for this. The lower value is always used. To do this, the value at the time of the gift is compared with the value on the date of death of the deceased person.
In the case of consumable assets such as cash, savings or securities, the value at the time of the gift usually counts. In the case of non-consumable assets such as real estate or company shares, on the other hand, the market value on the date of death is used if this is lower than the gift value at the time.
If the deceased person has reserved a usufructuary right or a right of residence, this has a massive impact on the subsequent valuation. Such rights mean that the person making the gift continues to derive a strong economic benefit from the property. This continued use means that the statutory valuation rules for calculating the monetary claim are applied differently.
In the case of mixed gifts with a partial consideration, the transfer of assets is divided up. In the end, only the gratuitous part of the transferred value counts towards the disinherited person's entitlement to payment.
Step-by-step calculation of the claim
In order to determine the supplement to the compulsory portion, the first step is to determine the actual value of the estate on the date of death. This includes all remaining assets such as real estate or money in accounts minus all existing debts and obligations.
All eligible gifts from the last ten years are then added mathematically. The statutory loss in value due to the annual amortisation is already taken into account. This results in a fictitious total value that serves as a clear basis for calculating the monetary claim.
The inheritance share is determined on the basis of this fictitious estate. This results in the compulsory portion, as this corresponds exactly to half of the statutory inheritance share. If the person entitled to a compulsory portion has already been paid a sum from the real estate, this amount is deducted. The difference between the recalculated compulsory portion from the fictitious estate and the payment already received then results in the final payment claim.
An example illustrates this calculation: A deceased person leaves behind a pure fortune of 200,000 euros. Five years before death, a property worth 200,000 euros was gifted to a child. Due to the statutory reduction, this gift is included in the calculation at 50 per cent and thus increases the notional estate by 100,000 euros to a total of 300,000 euros. The disinherited child now claims the supplement to the compulsory portion. If the statutory compulsory portion is 50 per cent, the pure payment claim from the fictitious estate amounts to 150,000 euros. If the child has already received 80,000 euros from the real estate, there is a remaining monetary claim for a supplement to the compulsory portion in the amount of 70,000 euros.
Enforcement of the claim in practice
First of all, persons entitled to a compulsory portion need absolute clarity about the remaining estate and all past gifts. As banks and land registries do not provide any information on this, a complete list of all assets and debts must be requested directly from the heirs via the statutory right to information. Only with this information can the correct payment claim be determined exactly at a later date.
In principle, the actual heirs are always responsible for paying out this monetary claim. However, if the available inheritance is not sufficient to settle the compulsory portion, under certain circumstances, those affected can also approach the beneficiaries directly and claim the missing payment amount.
A particularly critical factor in enforcement is the statutory limitation period. In the vast majority of cases, the claim for payment lapses after exactly three years. This period begins at the end of the year in which those affected learnt of the death and the relevant gifts. Anyone who delays too long simply runs the risk that the justified monetary claim can no longer be legally enforced.
Typical practical cases and special cases
Numerous everyday situations show very clearly how differently different gifts affect the subsequent monetary claim. It always depends on which assets were transferred, whether the deceased person reserved rights of use and how much time has passed since the transfer.
A few concrete examples illustrate these differences:
- A house is transferred to a child and the person making the gift retains a lifelong right of residence or usufruct. As the person continues to use the property economically as a result, the ten-year period only begins to run when this right ends. The full value of the property is then taken into account when calculating the monetary claim, even if the actual transfer took place decades ago.
- The legal situation is different in the case of a pure cash gift. If a person gives away a sum of 50,000 euros eight years before death, only twenty per cent of this amount is included in the fictitious estate calculation due to the annual reduction. The disinherited person's entitlement to payment is therefore only increased by this remaining share.
- The legislator has established a strict special rule for gifts to spouses. In such cases, the usual period of ten years only begins with the official dissolution of the marriage through divorce or death. Assets that were given away during an intact marriage are therefore almost always recognised in full and without any loss in value for the purpose of supplementing the compulsory portion.
- Even the free transfer of living space often plays an important role in practice. If someone permanently saves rent over the years and uses the deceased person's home free of charge, the law often treats this benefit as a regular gift. If all legal requirements are met, this saved amount is also included in the calculation and increases the final monetary claim of the disinherited relatives.
Which documents are required to verify the claim
Certain documents are essential so that persons entitled to a compulsory portion can have their own monetary claim calculated and verified with certainty. A complete dossier prevents later misunderstandings with the heirs and unnecessary delays. In practice, the following documents are regularly required for a precise examination.
- Will or contract of inheritance
- Death certificate of the deceased person
- Certificate of inheritance, if one has been applied for or is available
- Account statements, custody account statements and savings documents
- Contracts for past gifts, property transfers or other lifetime donations
- Land register extracts and property documents for the transferred properties
- Documents relating to a lifelong right of residence or usufruct, if the person making the gift has contractually reserved such rights
- Proof of all liabilities and debts that the deceased person still had at the time of death
- Information on the matrimonial property regime, such as a marriage contract, separation of property or community of accrued gains
A comprehensive estate register is the most important document of all for disinherited relatives. It transparently lists all assets and debts at the exact time of death. As banks and offices do not provide information to disinherited persons, this detailed list must be requested directly from the actual heirs. With all these collected documents, the fictitious total value can be calculated exactly and the final payout amount for those affected can be determined with legal certainty.
Answers to frequently asked questions
The compulsory portion is the statutory minimum protection for close relatives in the event of disinheritance through a will. The entitlement to a supplementary compulsory portion also applies if the deceased person gave away assets during their lifetime and thereby reduced the later entitlement to payment. This additional claim is used to check exactly how past gifts affect the pure monetary claim so that this is increased accordingly in the end.
If a person retains a lifelong right of residence or usufruct when transferring a property, the statutory period of ten years only starts when these rights of use actually end. As long as the person making the gift can continue to use the property commercially, the value at the time is generally taken into account in full and without loss of value for the subsequent monetary claim.
The regular monetary claim always amounts to exactly half of the statutory inheritance share. This is then supplemented by the compulsory portion, which is based on the eligible gifts of the last ten years. The final amount paid out to the person concerned depends largely on how many assets were gifted away, how long ago the gift was made and whether the deceased person reserved any rights of use.
This is certainly possible under certain legal conditions. However, it must first always be checked whether the actual heirs can settle the monetary claim from the existing estate. If the assets left behind are not sufficient for this, persons entitled to a compulsory portion may also approach the recipients of the gift at the time directly and demand the missing amount to be paid out.
However, this direct route only works in practice if the inheritance is actually insufficient. In addition, a certain sequence must be followed. Those affected must always turn first to the person who received the last gift shortly before the death.
The statutory limitation period for this monetary claim is normally exactly three years. This period always starts at the end of the year in which the death occurred and disinherited relatives learnt or should have learnt of the relevant gifts. It is extremely important to act quickly here so that the justified payment claim does not lapse unnoticed.
In the vast majority of cases, this is indeed the case. The legislator has stipulated that the ten-year period only begins with the official dissolution of the marriage through divorce or death. For this reason, assets that were given to a partner during an intact marriage are almost always recognised in full and without any loss of value for the subsequent monetary claim.
The period starts exactly on the day on which the transfer or handover of the assets was fully completed. For each full year that passes before the death, the value that can be taken into account for the calculation is reduced by exactly ten per cent. After ten years have passed, such past gifts are generally no longer included in the monetary claim, unless the person making the gift has expressly reserved rights of use such as usufruct.
Summary and outlook
The right to a supplementary compulsory portion effectively prevents close relatives from having their own entitlement to payment secretly reduced by gifts made by the deceased during their lifetime. The basis for the calculation is always a fictitious estate, which is made up of the actual assets left behind and the recognisable gifts of the last ten years. However, special rules apply for spouses or in the case of a reserved usufruct and right of residence, as the ten-year period begins much later in these special constellations.
If persons entitled to a compulsory portion suspect such an increase, they should request comprehensive information about past transfers of assets at a very early stage. As land registries and banks remain silent, this information must be requested directly from the actual heirs via the statutory right to information. Gathering all relevant documents and strictly adhering to the limitation period of three years are ultimately absolutely crucial to ensure that the justified monetary claim can actually be successfully enforced.
Supplementing the compulsory portion is and remains an indispensable instrument for protecting disinherited relatives from massive financial disadvantages. Because the exact enforcement is often complex in practice, it is almost always worthwhile for those affected to seek legal advice at an early stage. If legal assistance or expensive experts are required for this professional examination, Erbfinanz steps in as a strong solution provider and facilitator. As a specialised litigation financier, Erbfinanz assumes the entire cost risk or even purchases the payout claim directly so that those entitled to a compulsory portion receive immediate liquidity without any financial pressure.
