Financing Costs Between Inheritance and Certificate Issuance: Legal and Practical Considerations

1. Introduction
Managing the financial and legal aspects of an estate during the interim period between a person’s death and the issuance of the Certificate of Inheritance (Erbschein) is a complex task. In Germany, strict regulations govern the use of estate funds, ensuring fairness and transparency. This article explores the legal framework for managing estate funds in Germany, compares it to practices in Thailand, outlines the rights of different parties, and explains the implications of the Erbschein.

 
2. Legal Framework for Using Estate Funds
2.1 Germany: Restricted Access Without the Certificate of Inheritance
In Germany, estate funds are typically frozen after the deceased’s passing. Access to these funds requires proof of inheritance, such as an Erbschein or notarized will. Banks only allow withdrawals for specific purposes, such as funeral costs, and unauthorized use of funds can result in restitution claims or criminal charges.

2.2 Thailand: Informal Access to Estate Funds
In Thailand, inheritance processes are less formal. Family agreements often dictate the use of estate funds, allowing heirs to access and manage assets more easily. However, this informality can lead to disputes, particularly in cases involving significant assets.

2.3 Comparison of Legal Systems
Germany’s formal approach ensures transparency and fairness, minimizing disputes. Thailand’s flexibility can expedite the process but may create ambiguity and legal risks without clear documentation.

 
3. Rights of Parties Before the Certificate of Inheritance
3.1 Sole Heir Named in a Will
A sole heir is entitled to the entire estate, but their authority to act is limited until the Erbschein is issued. Unauthorized use of funds during this period is prohibited.

3.2 Multiple Heirs (Joint Heirship)
In Germany, joint heirs form an Erbengemeinschaft and must make collective decisions about the estate. No single heir has unilateral authority, and all actions must have the agreement of the group.

3.3 Non-Heirs
Individuals not named in the will or excluded under statutory inheritance rules have no legal right to access or manage estate funds. Any attempt to do so is illegal.

3.4 Executors (Testamentvollstrecker)
Executors named in the will can act on behalf of the estate, even before the Erbschein is issued, provided their authority is officially recognized. They manage estate funds according to the deceased’s instructions.

 
4. Duration of the Certificate of Inheritance Process
4.1 Typical Timeline
The process of obtaining an Erbschein typically takes several months. Factors influencing this timeline include the complexity of the estate, the number of heirs, and the completeness of documentation.

4.2 Steps in the Process
The process involves filing an application with the probate court, submitting required documents like the death certificate and proof of kinship, and undergoing verification by the court.

4.3 Delays in Complex Cases
Delays can occur due to disputes among heirs, missing documents, or international complexities. In extreme cases, the process may take years.

 
5. Legal Effects of the Certificate of Inheritance
5.1 Confirmation of Heirship
The Erbschein serves as official proof of inheritance, confirming the legal heirs and their shares of the estate.

5.2 Authority Over the Estate
Once issued, the Erbschein grants heirs full authority to manage, transfer, or distribute estate assets.

5.3 Recognition by Institutions
The certificate is recognized by banks, real estate registries, and other institutions, enabling formal transactions involving the estate.

 
6. Managing Estate Funds During the Interim Period
6.1 Permitted Uses of Funds
Funeral costs are typically covered by the deceased’s accounts upon presentation of invoices and a death certificate. Some banks also allow payments for necessary expenses like property maintenance and taxes.

6.2 Prohibited Uses of Funds
Funds cannot be used for personal expenses or distributed among heirs before the Erbschein is issued. Unauthorized actions may lead to legal consequences.

6.3 Collaborative Approaches
Joint heirs should agree on shared responsibilities and collaborate to ensure critical expenses are covered. Executors can provide stability by managing funds under their legal authority.

 
7. Practical Solutions for Financial Challenges
7.1 Bank Approvals
Heirs can work with banks to authorize specific payments, such as funeral costs or taxes, by providing appropriate documentation.

7.2 Pre-Financing Options
Pre-financing services, such as those offered by professional assistance firms, can cover immediate expenses while the estate remains inaccessible.

7.3 Legal Guidance
Consulting with a lawyer can clarify rights and obligations, particularly for complex estates or disputes among heirs.

 
8. Conclusion
The period between inheritance and the issuance of the Certificate of Inheritance is legally sensitive and financially challenging. In Germany, strict rules ensure fairness but require heirs to navigate formal processes for accessing funds. Understanding the rights of all parties involved and adopting collaborative or professional solutions can help manage this transitional phase effectively. With the right guidance, heirs can preserve the estate’s integrity and fulfill their financial obligations while awaiting the Erbschein.