The community of heirs - Problems with the administration of estates
The community of heirs is a community shaped by fate and it is formed when a person dies. It is comprised of a number of individuals who, sometimes inadvertently and surprisingly, find themselves to be part of such a community and who have to come to an agreement about how an estate should be distributed. However, family conflicts or different financial expectations often mean that this cannot be achieved and many communities of heirs exist permanently. The questions that can then arise with respect to the administration of the assets are discussed in this report.
Introduction
A community of heirs is automatically formed when a person dies and more than one person becomes an heir. This could be because the testator made such a provision in a will or, in the absence of a last will and testament, the rules of intestate succession apply, therefore, the spouse and children become heirs, for example.
The community of heirs is admittedly a so-called community of joint owners. However, unlike a GbR [a company under German civil law] it has no legal capacity and is not entered in the land register. The entry would therefore read as follows: “A and B in the community of heirs of C”. The estate becomes the joint assets of the co-heirs who are members of the community of heirs.
Administration of the estate
Generally, the co-heirs are only entitled to jointly administer the estate. This means that a measure not only requires a unanimous vote (internal relationship) but also joint execution by all the heirs (external relationship). The voting by the community of heirs does not need to be in any particular form. Voting can take place in writing, orally or by conclusive action (implicitly). It is likewise possible to grant power of attorney to a co-heir or a third party and it often makes sense to do so.
Proper administrative measures
There are particular features that relate to measures that are necessary for the proper administration of an estate. Indeed, all co-heirs are obliged to cooperate with respect to such measures. However, for an effective implementation, a majority vote of the co-heirs would also be sufficient. Here, the voting rights are determined not on the basis of the number of co-heirs, but instead in accordance with the share of the inheritance. A majority of the heirs is then likewise authorised to represent the community of heirs. This is now settled case law. It is therefore no longer necessary to commence court actions for consent against the unwilling co-heirs.
However, the problem lies in determining exactly what constitutes a proper administrative measure. An objective perspective is essential, whereby the perspective of a reasonable and economically minded evaluator is crucial. As is so often true, the assessment depends on the circumstances of each individual case and, in particular, the composition of the estate. For example, in the case of property, this would include maintenance work that could be financed from the estate, or decisions regarding the use or letting of the property. By contrast, according to the prevailing opinion, a tenancy agreement would have to be terminated jointly by all the heirs.
Authority to manage emergency situations
Measures that are necessary to preserve the estate can be taken by each co-heir even without the cooperation of the others. This authority to manage emergency situations should however be interpreted narrowly and would only apply in the case of very urgent measures where the consent of the other co-heirs can no longer be obtained, for example, urgent repair works or defending against foreclosure orders.
Under-age members of the community of heirs
Particular difficulties arise when minors are also members of the community of heirs. Although when there is a vote, they can generally be represented by their parents. This would however not apply if one of the parents themself was a member of the community of heirs. In that case, a (court-)appointed supplementary guardian would usually be required. Furthermore, when disposing of property, it would be necessary to obtain approval from a family court.
