Tag Archives: Attorney

Politics Law Society

M&A transactions: Amendment to the Außenwirtschaftsverordnung means more rigorous auditing

M&A transactions: Amendment to the Außenwirtschaftsverordnung means more rigorous auditing

M&A transactions: Amendment to the Außenwirtschaftsverordnung means more rigorous auditing

M&A transactions were heading for a record high in Germany last year. German firms were a popular target among foreign investors interested in corporate takeovers.

Probably due in no small part to the rising number of company takeovers from investors based outside of the EU area, Germany“s federal government wants to take a closer look at these kinds of transactions, with the ninth regulation amending the Außenwirtschaftsverordnung, Germany“s Foreign Trade and Payments Ordinance, even granting the government a right of veto.

We at the commercial law firm GRP Rainer Rechtsanwälte note that it was already the case that instances of investors from outside of the European Union or EFTA acquiring at least a 25 per cent share in a German company could be investigated by the Bundeswirtschaftsministerium, Germany“s Federal Ministry for Economic Affairs. However, the amendment to the Außenwirtschaftsverordnung means that the auditing periods have now largely been extended from two to four months and even so-called indirect acquisitions will be accounted for in the audit. It therefore also concerns transactions in relation to which the investor initially established a company within the EU and this then acquires a share in a German company or wishes to take it over.

According to the Bundeswirtschaftsministerium, the more rigorous auditing criteria are supposed to be a response to the increasing number and complexity of corporate takeovers and sales.

These audits essentially concern takeovers in areas that are particularly relevant from a security perspective and affect the federal government“s security interests. This relates, for instance, to the armament industry, but also civilian security-relevant technologies. Special attention ought to be paid here to businesses in the fields of information technology, telecommunications, cloud computing, energy and water, health, transport as well as finance and insurance.

The Regulation also introduces a reporting obligation for acquisitions of German companies planned by investors from outside of the EU in civilian economic sectors that are particularly relevant from a security perspective.

The amendment to the Außenwirtschaftsverordnung might make it more difficult for foreign investors to acquire a German company and also take more time. That being said, there need to be substantial grounds to prevent a corporate transaction from taking place.

Investors and entrepreneurs who are interested in a purchase or sale can consult lawyers who are experienced in the field of M&A.

https://www.grprainer.com/en/legal-advice/ma.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

Dismissal on grounds of conduct requires proper justification

Dismissal on grounds of conduct requires proper justification

Dismissal on grounds of conduct requires proper justification

If an employee violates obligations set forth in his employment contract, he may then be issued with notice of dismissal on grounds of conduct. That being said, the notice needs to well prepared if it is to be effective.

If an employee is covered by the Kündigungsschutzgesetz, Germany“s employment protection legislation, his employer must justify ordinary notice of dismissal for it to be issued effectively. We at the commercial law firm GRP Rainer Rechtsanwälte note that the relevant grounds may concern the employee in question personally or relate to his conduct, but operational reasons can, of course, also justify dismissal.

It is possible to issue notice of dismissal on grounds of conduct if the employee substantially breaches the obligations laid out in his employment contract and the employer has no less severe measures, such as a formal warning, at its disposal to change the employee“s behaviour. Breaches of duty of this kind may include failure to perform on the part of the employee as well as insufficient performance if the employee does not fulfil said obligations while observing the expected quality or quantity. Having said that, the employer has to be able to demonstrate conclusively that the employee“s performance has been considerably below average. As is clear from a ruling of the Arbeitsgericht Siegburg (Labour Court of Siegburg) from August 25, 2017, failure to do so might result in the notice of dismissal being ineffective (Az.: 3 Ca 1305/17).

In the instant case, a car mechanic had been dismissed on grounds of conduct due to his poor work performance. In justifying the dismissal, the employer stated that the mechanic had only identified four out of six mistakes in a workshop test and failed to perform outstanding service work. Because the employee had already been issued with a formal warning on three occasions, the employer took the view that there was no longer any chance of the former changing his behaviour.

However, the employee“s action for wrongful dismissal was successful. The Arbeitsgericht Siegburg held that the employer had not presented a representative period of the mechanic“s performance and had also failed to compare the latter“s error ratio with the performance of other mechanics employed at the company. The Court went on to say that it was therefore impossible to determine whether the mechanic had culpably violated the obligations set forth in his employment contract. It is still possible for an appeal to be lodged against the decision.

Even though the ruling is not yet final, it shows that ordinary and not simply exceptional notice of dismissal needs to be properly justified. Lawyers who are experienced in the field of employment law can advise employers.

https://www.grprainer.com/en/legal-advice/employment-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

OLG Köln: Contesting acceptance of an inheritance on account of an error

OLG Köln: Contesting acceptance of an inheritance on account of an error

OLG Köln: Contesting acceptance of an inheritance on account of an error

If an inheritance is not rejected within a period of six weeks then it is deemed to have been accepted. Notwithstanding this, it may still be possible to contest the acceptance of the inheritance.

As a matter of principle, an heir is not obligated to accept an inheritance. He or she has a period of six weeks after learning of their status as heir in which to reject the inheritance. Failure to reject the inheritance on time means that it will automatically be considered to have been accepted. Should the heir then decide he does not in fact wish to accept the inheritance, the only remaining option is to contest the acceptance. We at the commercial law firm GRP Rainer Rechtsanwälte note that it is possible in exceptional circumstances to contest an inheritance on account of an error, as demonstrated by a ruling of the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne] from May 15, 2017 (Az.: 2 Wx 109/17).

In the instant case, the testatrix had passed away at the age of 47. Because she had left no will or contract of inheritance behind, her husband as well as both of her siblings became heirs in accordance with the rules of intestate succession. The sister rejected the inheritance immediately, whereas the brother did not. After the six-week period expired, the inheritance was thus regarded as having been accepted.

Shortly thereafter, the brother declared he was contesting the acceptance of the inheritance. In justifying this course of action he stated that he had not known the estate was overindebted. On the other hand, he had been aware that his sister had received a financial settlement in the amount of 100,000 euros roughly one year before her death and that her account had shown a balance of 60,000 euros a few months prior to her passing, which is why he assumed it was possible to recover some value from the estate. He claimed to have tried to obtain information from his sister“s husband regarding the whereabouts of the financial settlement, but to no avail.

The OLG held that the action brought contesting the acceptance of the inheritance on account of an error concerning the estate“s overindebtedness was justified, ruling that the brother had laboured under misconceptions relating to the makeup of the estate and was thus mistaken regarding an essential characteristic of the estate.

Having said of all that, contesting the acceptance of an inheritance is only possible in individual cases and not every error justifies bringing a challenge. It is not possible, for instance, if the heir has merely incorrectly valued articles belonging to the estate. Lawyers who are experienced in the field of succession law can advise on all matters pertaining to estates.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

GRP Rainer Rechtsanwälte – Experience in business succession

GRP Rainer Rechtsanwälte – Experience in business succession

GRP Rainer Rechtsanwälte - Experience in business succession

A large number of small and medium-sized businesses are going to have to make arrangements for business succession in the near future. There are various possible approaches to organizing succession.

According to a study conducted by KfW Research, approximately one in every six small and medium-sized businesses will be planning for business succession by the year 2018. The study states that around 620,000 businesses will be searching for a suitable successor. For a lot of businesses, a change at the management level represents a considerable challenge. We at the commercial law firm GRP Rainer Rechtsanwälte have the experience required for weighing up the various options and finding a suitable solution to a business“ transition.

Generational change is something many family-run businesses are set to be faced with in the coming years. Often the desired solution is for the business to remain family-owned and the next generation to carry on the business. Having said that, this is not automatically the ideal solution, as the children, for instance, might not have any interest in the company or be suited to continue the business. In these cases, other options such as the sale or partial sale of the company need to be considered. In doing so, it is also important to take taxation and family aspects into account in addition to economic factors.

Selling a business requires intensive preparation, which is why business succession ought not to be kicked into the long grass. The order situation, balance sheets and existing employment contracts play an important role. Another key aspect is, of course, the valuation of the business to ascertain an appropriate selling price. Depending on the corporate form, it might also be a good idea to sell one“s company shares to one of the other shareholders.

It is equally important to consider inheritance claims. The rules of intestate succession kick in in the absence of appropriate arrangements, and this can give rise to problems. For this reason, it Is advisable to prepare what is referred to in German as an „Unternehmertestament“ (entrepreneur“s will). With this kind of will, the testator can prevent a community of heirs from pursuing different interests and thus avoid the business“ continuity being put at risk. It is possible to make arrangements in an entrepreneur“s will that already apply during the testator“s lifetime. Another possible option may be to set up a foundation.

Business succession should be planned in advance with due regard to all legal aspects as well as factors pertaining to taxation. Lawyers who are experienced in the field of company law can ensure that the handover of the business runs smoothly.

https://www.grprainer.com/en/legal-advice/company-law/business-succession.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

GRP Rainer Rechtsanwälte: Valuation of commercial agents right to compensation

GRP Rainer Rechtsanwälte: Valuation of commercial agents right to compensation

GRP Rainer Rechtsanwälte: Valuation of commercial agents right to compensation

After a commercial agency agreement has been terminated, the commercial agent is normally entitled to compensation. The assessment of the extent of this right to compensation frequently gives rise to disputes.

During their period of service to a company, commercial agents maintain existing contacts and establish new ones. If the commercial agency agreement is terminated, we at the commercial law firm GRP Rainer Rechtsanwälte note that the commercial agent is entitled to compensation if the company continues to maintain business relations with the newly acquired clients and profit from these. Even if the collaboration between the commercial agent and the company was successful and harmonious over a period of years, the extent of the right to compensation is often a matter of contention between the parties. Here at GRP Rainer Rechtsanwälte, we assess the value of this entitlement to compensation having regard to the extent to which the company will still be profiting in the future from the business contacts acquired through the commercial agent.

The second sticking point that commonly emerges when evaluating the commercial agent“s right to compensation is the classification of new clients. The central question here is whether it is possible for an existing client to be classified as a new client if commercial relations were expanded by the commercial agent and extended to additional products.

In April 2016, the Court of Justice of the European Union (CJEU) held that an existing business contact can be classified as a new client in this type of case, ruling that the expression „new client“ ought not to be interpreted too narrowly. The Court stated that if the commercial agent succeeds in extending business relations with an existing client to new products, then said client can absolutely be considered a new client. It went on to say that the decisive factor here is which products the commercial agent introduced to the client. If an existing client is classified as a new client, this will affect the extent of the commercial agent“s entitlement to compensation. The CJEU noted, however, that if commercial relations with the client in question were already in place, this can be accounted for in the calculation.

Lawyers who are experienced in the field of commercial law can assist both commercial agents and businesses in drafting commercial agency agreements, calculating the value of claims as well as terminating contractual relationships.

https://www.grprainer.com/en/legal-advice/commercial-law/commercial-agency-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

Strict test for testamentary capacity if serious delusions suspected

Strict test for testamentary capacity if serious delusions suspected

Strict test for testamentary capacity if serious delusions suspected

The testator must have testamentary capacity as a prerequisite for a valid will. Chronic delusions can give rise to a lack of testamentary capacity, as demonstrated by a ruling of the Oberlandesgericht (OLG) Frankfurt [Higher Regional Court of Frankfurt].

In principle, a person who is of legal age is deemed to have the capacity to prepare a will. Notwithstanding this, the following preconditions needs to be satisfied: the testator needs to be able to appreciate the significance of his testamentary dispositions as well as their impact and have arranged his dispositions of his own volition. The issues of whether the testator has testamentary capacity can take centre stage, for instance, in cases involving dementia. We at the law firm GRP Rainer Rechtsanwälte note, however, that it is not enough to simply call into question whether the testator has the capacity to prepare a will. It needs to be proven.

One case that came before the Oberlandesgericht Frankfurt was not concerned with the testatrix“s dementia but rather whether she potentially lacked the capacity to draft a will because of her chronic delusions. According to German law, if someone is not in a position to understand the significance of a declaration of intent he made and act pursuant to this understanding on account of a mental disturbance, weakness of the mind or impaired consciousness, then he cannot draw up a will.

The testatrix suffered continuously from fears of being robbed. For this reason, she hired detectives who fitted her house, among other places, with cameras. The childless and widowed testatrix eventually appointed the detectives as heirs in her will. Distant relatives who were eligible to become legal heirs appealed against this. They took the view that the testatrix suffered from pathological paranoia at the time of drafting the will and did not have the capacity to prepare it.

After obtaining an expert opinion, the probate court was not able to conclude that there was a lack of testamentary capacity, reasoning that it is possible the testatrix drew up her will in a „lichten Moment“, a „moment of clarity“. The OLG Frankfurt overturned this ruling and referred the case back to the probate court for further clarification (Az.: 20 W 188/16). It was held that in the absence of further clarification it could not be proven whether the testatrix acted in a „moment of clarity“. The Court went on to say that there is certainly a lack of testamentary capacity if the motives for preparing the will themselves are based on a lack of freedom attributable to an illness. The OLG stated that it needs to be assessed whether the freedom to make voluntary decisions has been nullified by pathological disorders affecting decision-making processes.

Lawyers who are versed in the field of succession law can advise on issues relating to estates.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

GRP Rainer Rechtsanwälte – Experience in establishing companies

GRP Rainer Rechtsanwälte – Experience in establishing companies

GRP Rainer Rechtsanwälte - Experience in establishing companies

Choosing the right corporate form when establishing a company can contribute a great deal to the economic success of the business.

We at the commercial law firm GRP Rainer Rechtsanwälte advise numerous businesses on company formation and takeovers as well as in the event of a change of partners or shareholders. In our experience, the partners or shareholders frequently neglect one critical point amidst all the euphoria: choosing the right corporate form for the business. The importance of the company“s form is often underestimated, yet our experience tells us that this can represent a key foundation of the business“ success.

The various types of company entail different rights and obligations. Aspects relating to the required registered capital, and the taxation and liability of the partners or shareholders can play a crucial role here. That is why it is critical to carefully weigh up the advantages and disadvantages of the respective corporate forms and then choose the type of company best suited to the business“ aims and opportunities.

A comprehensive understanding of both national and international company law is essential to being able to reach a decision. Thanks to the freedom of establishment for businesses it is also possible to opt for foreign corporate forms. This is equally an important factor if the intention is to set up companies or branches abroad or, conversely, foreign investor wish to operate in Germany.

Among the most popular corporate forms is the so-called „Gesellschaft mit beschränkter Haftung“, or GmbH for short, a type of German limited liability company. Experience has shown that this is because of the extensive creative freedom that a GmbH offers on the one hand and the limited risk of liability for shareholders on the other. Their liability risk is limited to their investment, with the registered capital having to amount to at least 25,000 euros.

Notwithstanding this, it is often overlooked when it comes to the issue of liability that shareholders may be liable to pay compensation that goes beyond the value of their investment if they deliberately cause improper damage to the company. Even the managing director of a GmbH can be held liable if he breaches his obligations.

All in all, a range of economic, legal and tax issues need to be considered when establishing a company, which is why it makes sense to obtain comprehensive legal advice from a single source. Lawyers who are versed in the field of company law can address these matters and find the optimal solution together with the client.

https://www.grprainer.com/en/legal-advice/company-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

OLG Köln: Will written with non-dominant hand valid

OLG Köln: Will written with non-dominant hand valid

OLG Köln: Will written with non-dominant hand valid

It is possible for a will to be valid even if it was written with the hand one does not normally write with. That was the verdict of the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne] in its ruling of August 3, 2017 (Az.: 2 Wx 149/17).

In addition to preparing a notarized will, a testamentary disposition can also be handwritten. To this end, the will needs to be written from top to bottom as well as signed by the testator. Moreover, the place and date ought not to be omitted in case any legal disputes arise. We at the commercial law firm GRP Rainer Rechtsanwälte note that this kind of handwritten will can easily be attributed to the testator in most cases. The situation is more difficult, however, if the testator writes the will with the „wrong“ hand, i.e. the hand he does not normally write with.

This is exactly what one testator did. Due to his illness his right arm began to show signs of paralysis, with the result that he drafted a will with his left hand in which he appointed his neighbours as his heirs. Notwithstanding this, a second will came to light. According to this, the testator“s siblings were to become his heirs. The OLG Köln had to decide which will was valid.

After extensively gathering evidence through the testimony of witnesses and obtaining an expert graphological assessment, the OLG Köln ruled that the will written with the testator“s left hand was valid and the neighbours received the certificate of inheritance. While the expert witness was not able to confirm with certainty that this will was from the testator because there were no comparable documents written with the latter“s left hand, one witness was able to give credible assurances that he was present when the testator drew up the will. The siblings were unsuccessful in establishing their line of reasoning that a will written with one“s non-dominant hand would have been substantially more irregular in appearance; it was held that it is possible to produce a regular typeface even with one“s untrained hand.

The Court took the view that the other will was not from the testator. It was sent anonymously to the probate court and prepared at a later stage according to its featured date. It was clear from the typeface alone that it was not from the testator, as at this point in time he was only able to write with his left hand.

When it comes to issues pertaining to an estate, lawyers who are versed in the field of succession law can offer advice.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

OLG Köln on incorporating the execution of a will into the certificate of inheritance

OLG Köln on incorporating the execution of a will into the certificate of inheritance

OLG Köln on incorporating the execution of a will into the certificate of inheritance

Heirs might be able to do as they wish with an estate even if an execution of a will has been ordered if its function is supervisory in nature. That was the verdict of the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne].

We at the commercial law firm GRP Rainer Rechtsanwälte note that if a testator orders execution of a will, this may limit the heirs“ control in relation to the estate. The execution of the will is then recorded in the certificate of inheritance. However, this step does not need to take place if the testator intended that the execution of the will be merely supervisory in nature and the executor“s brief is not supposed to involve administering the estate. That was the verdict of the Oberlandesgericht Köln in its ruling April 3, 2017 (Az.: 2 Wx 72/17).

In the instant case, the 85-year-old testator had five children. He appointed them in his will as preliminary heirs and his grandchildren as revisionary heirs. He also ordered execution of the will. In doing so, he mandated that the executor“s role was to supervise his testamentary disposition and not the ongoing management of the estate. Moreover, he ordered an additional executorship for his disabled daughter; her share in the inheritance was to be administered by way of a permanent executorship.

The point of contention was whether the supervisory execution of the will needed to be incorporated into the certificate of inheritance. The OLG Köln took the view that there was no cause for doing so. It interpreted the testator“s will to mean that he, with the exception of the disabled daughter, did not wish to limit the four other children“s right of disposal in relation to their share in the inheritance. The executor was only to supervise the implementation of his testamentary dispositions.

Accordingly, because these four children were able to do as they pleased with their portion of the estate, the OLG Köln held that a memorandum stating that the execution of the will had been ordered need not be included in the certificate of inheritance. The Court went on to say that this would only be necessary if the execution of the will was supposed to limit the heirs“ control.

The testator should always take care to ensure that their wishes have been stated as clearly as possible so that their testamentary dispositions are actually implemented in accordance with their wishes. Lawyers who are versed in the field of succession can advise on all matters pertaining to estates, wills and contracts of inheritance.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

OLG Köln: Only serious misconduct justifies withdrawal from contract of inheritance

OLG Köln: Only serious misconduct justifies withdrawal from contract of inheritance

OLG Köln: Only serious misconduct justifies withdrawal from contract of inheritance

Apart from a will, it is also possible to prepare a contract of inheritance as a way of organizing one“s estate. It should be noted, however, that a contract of inheritance has a significantly stronger binding effect.

In the absence of a will or contract of inheritance, the rules of intestate succession apply automatically following the death of the testator. If these run contrary to the testator“s wishes, a testamentary disposition ought to be drafted. In doing so, one needs to carefully weigh up whether a will or contract of inheritance is the most appropriate form. A will provides the testator with greater freedom when it comes to drawing up the agreement, whereas a contract of inheritance binds both parties to the contract. Having said that, a contract of inheritance cannot be subsequently altered or rescinded. If no appropriate provisions are set out in the contract of inheritance, we at the commercial law firm GRP Rainer Rechtsanwälte note that withdrawal is only possible if misconduct on the part of the other contractual party that would justify divestment of the compulsory portion can be proven.

In its judgment of July 3, 2017, the Oberlandesgericht (OLG) Köln [Higher Regional Court of Cologne] ruled that a testator had not effectively withdrawn from the contract of inheritance with his wife (Az.: 2 Wx 147/17). The married couple had concluded a notarized contract of inheritance 53 years prior to the death of the husband in which they had designated each other as sole heirs. Several months before his death, the husband announced his withdrawal from the contract of inheritance and appointed his children as heirs. A dispute emerged between the wife and the children concerning who had become the heir(s). The OLG Köln held that the wife had become the sole heir.

The parties had not agreed to a reservation of the right to withdraw in the contract of inheritance, which meant that withdrawal was only possible if the relevant contractual partner had been guilty of serious misconduct. The Court clarified that this misconduct needed to be sufficiently serious that it would have justified divestment of the compulsory portion. This would only be the case if the legal heir was guilty of committing a crime or wilfully committing a serious offence against the testator. In the case in question, while the wife had withdrawn around 19,000 euros from the testator“s account and set up a monthly standing order to her benefit in the amount of 2,000 euros, the OLG concluded that this alone did not amount to an offence involving property.

Lawyers who are experienced in the field of succession law can advise on all issues pertaining to wills and contracts of inheritance.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en