Anyone who wants to ensure how their assets are distributed after their death should settle their inheritance matters early. This raises the question: Is a will or an inheritance contract the better choice?
Life is unpredictable – an accident, illness, or old age can suddenly leave you unable to manage your own affairs. Therefore, it’s worthwhile for everyone to plan ahead. Instruments such as a power of attorney, an advance healthcare directive, or a bank power of attorney can help with this. It’s equally important to prevent potential inheritance disputes by clearly dividing assets and estate items. But which is better: a will or an inheritance contract?
Will or inheritance contract: What you should know
Many people initially think of a will when it comes to settling their estate. A will can be written simply by hand without a notary. However, in more complex situations—such as blended families—consulting a notary can be advisable. German inheritance law also offers an alternative option: the inheritance contract. Both options share similarities but differ in key aspects.
Wills and inheritance contracts: differences and similarities
A will is appealing because of its simplicity. The testator needs only paper and pen to record their last wishes. It allows for a high degree of flexibility, as changes can be made at any time by creating a new will – without involving other people or a notary.
An inheritance contract, on the other hand, absolutely requires the involvement of a notary. Both the testator and the future heirs must be present for the notarization, accept the terms of the contract, and sign it. The resulting notary fees depend on the value of the estate and the notary’s fee schedule. Unlike a will, an inheritance contract is legally binding and difficult to amend. Changes require the consent of all parties involved and a new notarization. “Therefore, it is advisable to obtain comprehensive information about important aspects such as reservations of rights of withdrawal or cancellation options before concluding an inheritance contract,” advises lawyer István Cocron.
For whom is an inheritance contract suitable?
An inheritance contract offers a stronger binding effect compared to a will. This can be advantageous if the heirs wish to agree on considerations during the testator’s lifetime. Such arrangements cannot be legally stipulated in a will.
An inheritance contract is particularly interesting for unmarried couples who want to provide for each other, or for regulating business succession. It allows for clear agreements that are legally binding and create planning security.
Individual needs decide
Whether a will or an inheritance contract is the better choice depends on personal circumstances and individual needs. While a will scores points for its flexibility and ease of use, an inheritance contract offers security and binding commitments – especially in more complex cases. “Expert advice, for example from a notary or lawyer, can help in making the right decision, ” says lawyer Cocron.
