Anyone who draws up a will in Germany wants to ensure that their last wishes are carried out reliably and smoothly. To this end, the testator can appoint a trusted person as executor of the will. But what points need to be covered in the will in such a case? What about the executor’s remuneration? And when will they receive their money? Many testators are unaware that they can – and should – address these issues in their will.
Clear designation of the executor
It is essential to clearly specify in the will who is to take on this role. You can designate any person, including legal entities such as a law firm or tax consultancy. It is also possible to designate a substitute. This is advantageous if the initially designated executor is unable or unwilling to take on the role. However, it should be noted that no one can become an executor against their will. Acceptance of the role must be declared to the probate court. It is therefore best to speak to your desired executor during your lifetime and obtain their consent.
Determining the type and scope of testamentary execution
There are various types of testamentary execution, which can be combined or restricted as required. The following types are the most common:
- Settlement execution: The executor distributes the estate, fulfills bequests and conditions, settles debts, and distributes the estate to the heirs.
- Permanent execution: The administration of the estate is also ordered for the period after the completion of his other tasks. Here, the estate remains under the administration of the executor for a longer period of time after the settlement, often to protect minor or vulnerable heirs.
- Administrative execution: The executor administers the estate for a specific period of time, for example until an heir reaches the age of majority. Administration is the only task; no distribution of the estate is to be carried out.
The scope of the executor’s duties can be specifically limited or expanded in the will in Germany, for example to certain assets or tasks.
Setting remuneration in your will: your options
The execution of a will can be time-consuming and lengthy. In the case of complicated estates with complex assets (real estate, company shares, art, etc.), the execution of a will can take years. The legal provisions therefore generally stipulate that an executor may demand “reasonable remuneration” for their services, unless otherwise specified in the will. However, what is considered reasonable is often a source of dispute between heirs and executors. It is therefore advisable to clearly and unambiguously regulate remuneration in the will.
The following options are available:
- Flat fee: The will specifies a fixed amount of money that the executor will receive for their services.
- Hourly rate: An hourly rate is determined and invoiced.
- Percentage of the estate value: Often, a certain percentage of the gross estate value is agreed upon.
- Reference to remuneration tables: Reference can be made to recognized tables (e.g., recommendations of the German Notary Association or the New Rhenish Table), which provide for a specific remuneration depending on the value of the estate.
Important in this context: The more precise and comprehensible the remuneration is regulated, the less potential for conflict there will be later on.
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When will the remuneration be paid out?
Not only the amount, but also the timing of the payment can and should be specified in the will. Examples of this could be: after completion of the estate settlement (which means that the executor may have to wait several years to receive their remuneration), regularly (monthly, annually, etc.) in the case of permanent execution, or in installments after certain milestones.
In the absence of such a provision, the executor can usually demand his remuneration after completion of his work. In the case of longer or permanent executions, an annual or pro rata payment is customary.
Clear regulations prevent disputes
The testamentary disposition of the execution of a will in Germany should be carefully and individually tailored. Clear provisions regarding the person, tasks, nature and scope, acceptance, control mechanisms, and remuneration are crucial to ensure that your last will is reliably carried out and disputes between the heirs are avoided.
We are happy to assist you in drafting the appropriate provisions in your will or as executors of your will.
Continue reading:
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