We advise entrepreneurial families, shareholders and high-net-worth individuals seeking an orderly succession and long-term protection of their wealth.
Our clients include in particular
A robust succession plan requires time and coordinated legal, tax and family planning. Early advice is particularly valuable in the following situations.
The next generation takes over, or the business is transferred to management or a third party. The transition requires early and coordinated preparation from corporate, succession and tax perspectives.
Lifetime succession allows assets to be transferred in stages. Reserved usufruct, clawback rights and coordinated tax allowances can combine financial security, control and tax objectives.
A family foundation can pool assets, prevent fragmentation and preserve wealth across generations. We assess whether it is suitable in light of the family’s objectives, asset structure and tax consequences.
The tax burden on a transfer of business assets depends heavily on the structure. Relief under Sections 13a and 13b ErbStG can be substantial but requires compliance with complex conditions and holding periods.
Without an effective testamentary arrangement, statutory succession applies and may create unwanted communities of heirs. A will or inheritance agreement can allocate responsibility clearly and align with the corporate arrangements.
Illness or death of the owner can paralyse a company. A precautionary power of attorney, representation arrangements and an emergency plan keep the company able to act when it matters.
You want to have a social impact and use tax advantages at the same time. We establish charitable foundations, draft the statutes and secure recognition of charitable status.
Foreign real estate, shareholdings or a change of residence bring foreign inheritance and tax law into play. We coordinate the succession across borders so that it holds everywhere.
Whether a German family holds assets abroad or an international family owns assets in Germany, one dedicated contact coordinates the planning across borders.
German Families with Assets Abroad
Your company or wealth extends beyond the German border.
International Families in Germany
You have assets, residence or companies in Germany.
Effective succession planning develops step by step. We support entrepreneurial families from the initial review and structuring through implementation and later adjustments.
We provide in-depth articles on key structuring questions in wealth succession. These explain how to plan around German exit tax through timely structuring and the requirements for establishing a family foundation in Germany.
In a confidential first meeting, we clarify your objectives and starting position. We then develop a robust succession concept.
Succession begins with clarifying the goals: continuation in the family, handover to management or sale to a third party. The legal and tax structure follows, then the adjustment of the articles of association and the will, and the gradual transfer, often through anticipated succession. A lead time of several years is important, in order to use allowances and relief rules and to arrange the handover in an orderly way. We develop the concept and implement it with the tax adviser.
In anticipated succession, assets are transferred during the transferor's lifetime, legally a gift. The advantage lies in predictability: the transferor retains influence and can secure provision and control through usufruct, rights of revocation and voting arrangements. For tax, the allowances can be used again every ten years, which can substantially reduce the tax burden. At the same time, a clear lifetime arrangement prevents later disputes among the heirs. We structure the transfer to fit your goals.
For the transfer of business assets, Sections 13a and 13b ErbStG provide special relief. Under standard relief, 85 per cent of the eligible assets remain tax-free if the business is continued for five years and the payroll is maintained. Optional relief exempts even 100 per cent, but requires seven years of continuation, a higher payroll and a low share of administrative assets. For large assets, an additional means test applies. The conditions are complex, and mistakes cost the relief. We structure the transfer so that the relief holds.
The personal allowances depend on the family relationship: 500,000 euros for spouses and registered partners, 400,000 euros for children, 200,000 euros for grandchildren and lower amounts for more distant relatives. These allowances are available again every ten years, because several acquisitions within ten years are aggregated (Section 14 ErbStG). Those who transfer early and in stages can therefore reduce the tax burden noticeably. We plan the transfers so that the allowances are used optimally.
A family foundation can make sense where assets are to be pooled permanently, protected from fragmentation through division of the estate and preserved across generations in the family's interest. It makes the assets independent and is governed by the statutes, not by changing owners. Points to consider are the ongoing administration, the tying-up of the assets and the substitute inheritance tax that arises roughly every 30 years. Whether a foundation fits is a question of goals, size of assets and tax. We assess suitability and establish the foundation.
A family foundation serves the benefit of a family; its income goes to the family beneficiaries, and it is in principle subject to tax. A charitable foundation pursues tax-privileged charitable purposes, enjoys tax advantages in return, but may not distribute its assets to a family. Hybrid forms and double foundations are also possible. Which form fits depends on whether provision for the family or charitable impact is to the fore. We set the statutes and structure according to your goals.
Without a disposition, statutory succession applies, which frequently leads to co-heirships and unintended results, especially with companies. A will orders the succession unilaterally and can be changed at any time. An inheritance contract, by contrast, binds several parties and creates reliability, for instance in a company handover in return for provision. Both should be coordinated with the articles of association so that inheritance and company law do not diverge. We draft the appropriate disposition and dovetail it with the company arrangements.
If the owner suddenly becomes unavailable through illness or death, the company faces paralysis, for instance if no one may sign contracts or run accounts. Precautions are a precautionary power of attorney, clear representation arrangements in the articles of association and an emergency plan with the key information and access rights. This provision should be coordinated with the long-term succession. We prepare the emergency plan and the necessary powers of attorney and arrangements.
Foreign real estate, shareholdings or a residence abroad bring foreign inheritance and tax law into play. Within the EU, the European Succession Regulation determines which law applies to the entire estate, whereby a German testator can choose German law. For tax, a burden in several states can arise, which double taxation treaties mitigate. We coordinate the succession across borders; the cross-border administration is covered under international inheritance law.
A foundation with legal capacity comes into being through the foundation transaction, in which the founder sets the purpose, assets and organisation, and through recognition by the competent foundation authority. The central document is the statutes, with the purpose, bodies and rules on asset management. After establishment, the foundation is subject to state foundation supervision, which monitors the use of the assets in accordance with the statutes; charitable foundations are additionally supervised by the tax office. We design the foundation, draft the statutes and support the recognition procedure.
