How Is the Mandatory Share Paid Out, and Who Handles It?

The process of paying out the mandatory share (Pflichtteil) in German inheritance law involves specific steps and is managed by various parties. Here’s an overview of how it works:

 
Who Is Responsible for Paying the Mandatory Share?
The mandatory share is paid out by the heirs of the deceased. If multiple heirs are involved, they are jointly responsible for satisfying the claim in proportion to their respective shares of the estate. For example, if there are two heirs splitting the estate equally, each is liable for half of the mandatory share payment.

 
How Is the Mandatory Share Calculated and Paid?
Valuation of the Estate
The first step in determining the mandatory share is a complete valuation of the estate. This includes:

Assets: Real estate, bank accounts, investments, and personal belongings.
Liabilities: Debts, funeral costs, and other expenses, which are deducted from the estate's value.
Lifetime Gifts: Large gifts made by the deceased to heirs or other individuals during their lifetime may be added back to the estate value for calculation purposes.

Claim Submission
The person entitled to the mandatory share must formally submit their claim to the heirs. This often requires legal assistance to ensure accuracy and compliance with

German inheritance law.
Negotiation and Agreement
The heirs and the claimant may negotiate the terms of the payout, especially if the estate includes non-liquid assets (e.g., real estate). If an agreement is reached, the payment can be made directly to the claimant.
Payment Options

Cash Payment: The most straightforward option if the estate includes sufficient liquid assets.
Asset Distribution: If the estate lacks liquidity, the claimant may agree to receive part of their share in the form of assets (e.g., property or valuables).
Installments: In some cases, heirs may negotiate to pay the mandatory share in installments, especially if the estate lacks immediate funds.
 
What Happens If the Heirs Refuse to Pay?
If the heirs fail to pay the mandatory share, the claimant has the right to:

File a Legal Action
The claimant can take the matter to court. The court will evaluate the estate and issue a ruling requiring the heirs to pay the mandatory share.
Enforcement Measures
If the heirs still refuse to comply, the claimant can initiate enforcement actions, such as:

Garnishment of the heirs' accounts.
Forced sale of estate assets to satisfy the claim.
 
Who Oversees the Process?

The heirs are primarily responsible for paying out the mandatory share and managing the estate.

If the deceased named an executor (Testamentsvollstrecker) in their will, the executor manages the estate and ensures the mandatory share is paid out as required.

If the mandatory share is contested or the heirs refuse to pay, the probate court may intervene to resolve disputes and enforce payment.

Both heirs and claimants often involve legal or financial professionals to navigate the process, especially for complex or high-value estates.
 
Challenges in Paying Out the Mandatory Share
Insufficient Liquidity
If the estate consists mainly of non-liquid assets like real estate, heirs may need to sell assets or negotiate alternative arrangements with the claimant.

Disputes Over Valuation
Heirs and claimants may disagree on the value of certain assets, requiring professional appraisals or court involvement.

Legal Costs
Disputes can lead to significant legal costs, which may further reduce the value of the estate.
 
Practical Advice for Claimants and Heirs
Claimants

Submit your claim formally and in writing.
Seek legal assistance to ensure accurate valuation and enforce your rights.
Heirs

Work with professionals to assess the estate value.
Negotiate with the claimant to avoid costly legal disputes.

Ensure compliance with legal deadlines to avoid penalties or additional claims.
 
By understanding how mandatory shares are paid out and who handles them, both heirs and claimants can navigate the process more effectively, ensuring a fair resolution for all parties involved.