Who is Entitled to a Mandatory Share, and How Is It Calculated?

Inheritance laws can vary significantly across countries, and in cross-border cases, understanding who is entitled to a mandatory share and how it is calculated is crucial. This is especially true when dealing with German inheritance law, which has strict provisions for mandatory shares, and Thai inheritance law, which offers more flexibility. In this article, we’ll explore these differences and explain when each legal system applies.

 
What Are Mandatory Shares in German Inheritance Law?
In Germany, mandatory shares (Pflichtteil) are reserved portions of an estate that must go to specific close relatives, even if they are excluded from the will. These provisions ensure financial support for the deceased's immediate family.

Who Is Entitled?
Mandatory shares are typically granted to:

Children of the deceased (biological or adopted).
Parents of the deceased, if there are no children.
The spouse, if not fully provided for in the will.
Other relatives, such as siblings or more distant family members, are generally not entitled to mandatory shares under German law.

How Is It Calculated?
The mandatory share is half of the statutory inheritance that the person would have received if there were no will (intestate succession). For example:

If the statutory inheritance split is 50% for the spouse and 50% for one child, but the child is excluded from the will, the child is still entitled to 25% (half of their statutory share).
The estate value used for calculating the mandatory share includes all assets, minus liabilities, and may also account for gifts made by the deceased during their lifetime.

 
Thai Inheritance Law: No Mandatory Shares
In contrast, Thai inheritance law does not enforce mandatory shares. Instead, it divides heirs into six classes, each with equal priority, with the surviving spouse treated as an additional class. The testator has more freedom to exclude certain relatives from the estate in Thailand.

Key Differences Between German and Thai Law
Mandatory Shares:

German Law: Protects close relatives with guaranteed portions of the estate.
Thai Law: Offers no mandatory shares, allowing the testator greater freedom.
Freedom of Testation:

German Law: Limits testators’ ability to disinherit certain heirs.
Thai Law: Allows full control over asset distribution.
 
When Does German or Thai Law Apply?
Determining whether German or Thai inheritance law applies depends on several factors:

Nationality:

German Citizens: German law typically governs their estate, regardless of asset location.
Thai Citizens: Thai law applies to their entire estate, no matter where they reside.
Habitual Residence:
If the deceased lived in Thailand but was a German citizen, Thai law might apply to assets in Thailand unless the will specifies otherwise.
Asset Location:

Assets in Germany are usually governed by German law.
Assets in Thailand are subject to Thai law.
EU Succession Regulation:
Since 2015, German citizens can specify in their will that German law should apply to their entire estate, even if they reside in Thailand.
 
Calculating the Mandatory Share in Mixed Jurisdictions
When estates include assets in both Germany and Thailand, mandatory share claims can become more complex:

Assets in Germany: Calculated under German law, ensuring close relatives receive their statutory portion.
Assets in Thailand: No mandatory share applies; distribution follows the will or Thai inheritance law.
Example: A German man with assets in both Germany (€500,000) and Thailand (THB 10 million) passes away.

His child, excluded from the will, can claim a mandatory share on the German assets (e.g., €125,000).
Thai assets are distributed according to the will, with no mandatory share protections.
 
Legal Implications for Heirs
Mandatory Share Claims:
Heirs entitled to a mandatory share must formally claim it, typically within three years of learning about the inheritance.
Estate Administration:
Separate probate processes may be required in Germany and Thailand, depending on asset location.
Tax Considerations:

Germany: Inheritance tax applies to worldwide assets if the deceased or heirs reside in Germany.
Thailand: Inheritance tax only applies to estates exceeding 100 million THB for assets in Thailand.
 
Steps for Managing Cross-Border Inheritance
Identify Applicable Laws:
Determine whether German or Thai inheritance law governs the estate based on nationality, residence, and asset location.
Understand Mandatory Share Rights:
If German law applies, ensure close relatives’ rights are protected.
Seek Legal Guidance:
Cross-border cases often require expertise in both legal systems to navigate claims, taxes, and asset distribution effectively.
 
Conclusion
Understanding who is entitled to a mandatory share and how it is calculated depends on the governing law. While German law enforces mandatory shares to protect close relatives, Thai law allows greater freedom in asset distribution. For mixed estates, careful planning and professional advice are essential to ensure compliance and fairness across jurisdictions. By understanding these nuances, heirs and testators can better navigate the complexities of cross-border inheritance.