and German-Swedish successions
I. Which law is applicable?
Which law applies, if the succession affects both, Germany and Sweden? German Inheritance Law, Swedish Inheritance Law or even international inheritance law?
Due to a lack of a genuine “international inheritance law”, the applicable law is determined by the affected states themselves: For successions occurred before 17th August 2015 according to the Swedish and German regulations the applicable law is determined by the citizenship of the deceased.
To facilitate cross-border-successions within the European Union, the European Parliament and the Council passed the Regulation of Successions (Regulation No 650/12), applicable to persons deceased on or after 17th, of August 2015.
According to the EU Regulation of Successions, the applicable jurisdiction to cross-border successions is determined by the last “habitual residence” of the deceased.
1st Case: A Swedish citizen resides and dies in Berlin. According to the EU Regulation, the German regulations are applicable due to the “habitual residence” of the deceased in Germany.
2nd Case: A German citizen moves to Göteborg to build up a business. According to the EU Regulation, the Swedish legislation is the one to be applied due to the “habitual residence” of the deceased in Germany.
Attorney Swane: Tel. + 49 (0) 30 62 93 78 66 6
Attorney Block: Tel. + 49 (0) 40 573 07 99 99
II. Matrimonial Property Regime:
The matrimonial property regime has a significant influence on the economic outcome in concerning the distribution of the estate.
According to the Swedish matrimonial property law, each spouse remains the owner of his/her property, regardless whether the property was acquired prior to the marriage or during the marriage. Only the assets that have been purchased jointly are common property. Is the marriage dissolved by the death of one spouse, the so-called institution of „giftorätt“ engages and grants the surviving spouse a marital right of equal division of the marital property (7:1 Äktenskapsbalken).
Except the estate in severalty (enskild egendom) any assets of the spouses belong to the so-called „giftorättsgod”. To perform the „giftorättsgod” the joint property of the spouses is summarized and subsequently, the surviving spouse is granted half of the joint property.
7:2 (matrimonial code) determines which assets belong to the estate in severalty (enskild egendom) that are excluded from the division, e.g. resulting from a marriage contract or a condition of a third party, e.g. determined in a will.
III. Substantive Law
1. Intestate successions:
The intestate succession engages if the deceased did not leave a will. The regulations determine the heirs appointed. The Swedish intestate succession regulations differ significantly from the German provisions, particularly with regard to the rights of the surviving spouse.
The surviving spouse generally inherits before joint children and other relatives and successors (3:1 Ärvadbalk).
However, the spouse´s inheritance rights are restricted to protect the children´s inheritance rights. Their rights are deferred up till the surviving spouse´s death.
In order to obtain the assets within the family, the surviving spouse is entitled to consume or to sell the inherited assets, but he may not dispose by will over the inherited assets.
In case the deceased leaves behind separate children from a former relationship a division of the estate has to be performed if the separate children waive their rights. The separate children´s rights grant them a legal share of one-half of the total estate.
However, the surviving spouse has a claim of at least four times the amount of the social security payments. Moreover, the Swedish intestate succession is governed by a Parentelsystem, similar to the German Parentelsystem.
If the deceased leaves children, other relatives are excluded from the succession. Children inherit equal shares, however, the right of inheritance may be limited by the inheritance rights of the surviving spouse.
If the deceased was not married and left no children behind, the parents inherit the entire estate in equal shares.
2. Will and Succession Contract:
Swedish law requires that a will is established in the right form. The formal requirements are significantly higher than the German regulations.
The will must be established in the written form and signed by the testator. Moreover, the will has either to be signed by the testator in front of two witnesses or has to be acknowledged. The will must also be signed by the witnesses.
A will that is established according to the German requirements, may be recognized under the provisions of the Hague Convention on testamentary dispositions or Swedish legal provisions. (1937:81IDL).
The Swedish regulations allow joint testament. Succession Contracts however, are invalid.
3. Forced Heirship:
Under Swedish Law, only the descendants (children, grandchildren) are entitled to forced heirship. The surviving spouse, as well as the parents, are excluded from the forced heirship. Nevertheless, the surviving spouse may claim four times the amount of the social security payments.
Unlike the German legislation, the compulsory portion under Swedish Legislation is formed as an obligatory portion. Subsequently, the beneficiaries hold a legal position as legal heirs.
Please note that the Swedish obligatory portion is subject to a period of limitation of six months upon delivery of the will and has to be claimed towards the successors.
IV. Proceedings
The successors are obliged to establish an estate inventory within three months after the occurrence of the death of the deceased. The estate inventory has to be forwarded to the tax agency in concern. In cases of cross border successions, the period may be extended.
After the determination of assets that belong to the estate (boutredning) the estate inventory is usually registered by the concerned tax agency. The registration from also serves as inheritance certificate.
The determination of assets, as well as the distribution of the estate (arvskifte), is performed under the provisions of Swedish law, if the deceased was a Swedish citizen, resided in Sweden whilst the occurrence of death (hemvist) or if he bequeathed property in Sweden. However, the successors are entitled to mandate that the succession is proceeded in the native country of the deceased.
V. Succession Taxation.
Upon 31st December 2004, the Succession taxation has been abandoned in Sweden. However foreign citizens, as well as Swedish citizens with property abroad, may be subjects to the taxation of their country or the country where the property is situated.
The German-Swedish taxation agreement from 1994 is to be continued. Thus, German-Swedish successions may be subject to the agreement. From a German perspective, the agreement ensures the avoidance of a double taxation.
Concerning further details, I will be glad to provide comprehensive assistance.
Do you need help? Please do not hesitate to contact us
Rechtsanwalt Swane in Berlin
German Probate & Wills Lawyer, Specialist in International Probate and Estate Planning
+49 (0) 30 / 62 93 78 66 6
swane@fachanwalt-erbrecht.eu
Schlüterstraße 51
10629 Berlin (Charlottenburg)
Rechtsanwalt Block in Hamburg
German Probate & Wills Lawyer, Specialist in International Probate and Estate Planning
+49 (0) 40 / 57 307 99 99
block@fachanwalt-erbrecht.eu
Gasstraße 2 – Haus 1
22761 Hamburg