A split of the estate (Nachlassspaltung) exists when a single estate is administered under several legal systems, for example the bank assets under German law and a property in a third state under the law there. Anyone who wants to avoid a split of the estate can, under Art. 22 of the EU Succession Regulation (EuErbVO), determine the law of nationality for the entire estate by a choice of law and thus exclude a renvoi in the EU proceedings (Art. 34 (2) EuErbVO). The choice of law, however, binds no third state; there the law of the place where the property is situated (Belegenheitsrecht) can still apply to land.
The choice of law is an important means, but not the only one, and it takes effect only where the legal system that decides on the estate also respects it. This article explains how a split arises despite the EU Succession Regulation (Erbrechtsverordnung, EuErbVO), above all with real estate and third states, what means are available and what remains to be done if a split cannot be ruled out. It is written for readers abroad as well, for example owners of real estate abroad and their families.
What a Split of the Estate Means and Why It Causes Problems
The EuErbVO follows the principle of unity of the estate: the law determined under Art. 21 or Art. 22 EuErbVO applies to the entire succession, irrespective of where the assets are located. This principle binds, however, only the courts and authorities of the Member States that apply the Regulation. States outside this system have their own conflict-of-laws rules. Where both systems meet, part of the estate can be subject to a different law.
The practical consequences:
- Heirs, shares and compulsory portions can differ depending on the part of the estate.
- Two proceedings are often necessary, with their own proofs, deadlines and costs.
- Wills tailored to one law may not fit the other law.
- The calculation of the compulsory portion and equalisation becomes confusing; see Compulsory portion law and foreign assets.
- Inheritance tax may arise in several states.
The general questions in inheriting a foreign property, from the land registry procedure to disclaimer, are dealt with in the article Inheriting property abroad. Here the concern is the causes of the split and the means against it.
How the Split Arises Despite the EuErbVO
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| Cause | How it comes about |
|---|---|
| Renvoi by a third state to the place where the property is situated | If under Art. 21 (1) the law of a third state is applicable, under Art. 34 (1) the EuErbVO respects its reference to the law of a Member State or of another third state that would apply its own law. If the third state refers in this way to the law of the place of situation for land, that law applies to the property. |
| Own connecting rule of the state where the property is situated | A third state in which the property is situated applies its own conflict-of-laws rules independently of the EuErbVO and can call upon the law of the place of situation. |
| Special provisions of the state where the property is situated | Art. 30 EuErbVO permits rules that apply to certain assets for economic, family or social considerations, for example agricultural holdings. |
| Limitation of the proceedings | Under Art. 12 EuErbVO, the court can on application disregard part of the estate if it is to be expected that the decision will not be recognised in the third state. |
| International treaties | Under Art. 75 EuErbVO, older agreements remain in place which in part call upon the law of the place of situation for real estate; see International inheritance law when emigrating. |
| Older successions and dispositions | For successions before 17 August 2015, the earlier conflict-of-laws rules applied; transitional rules are in Art. 83. |
| Inconsistent dispositions | Several wills in different countries that overlap or contradict one another produce a split through their contents. |
An example of the first constellation is the order of the Higher Regional Court of Frankfurt am Main of 14 September 2020 (21 W 59/20): in the case of a German testator with a last habitual residence in China, the court respected the reference of Chinese conflict-of-laws rules for the domestic property under Art. 34 (1) EuErbVO and subjected the property to German law. How narrow the line is, is shown by the Federal Court of Justice (Bundesgerichtshof, order of 24 June 2026, IV ZB 24/25): in the case of a testator with habitual residence in New York, it classified the share in a community of heirs (Erbengemeinschaft), to which a Munich property belonged, as movable property, so that the law of New York remained applicable. Where an express choice is missing, the conflict-of-laws rules of the third state therefore also have a say.
What the Choice of Law Can Achieve
The choice of law under Art. 22 EuErbVO allows the law of the home state to be determined for the entire succession. How the choice of law is worded and what else it achieves is explained in the article International inheritance law when emigrating. For the split, three points are decisive.
First, Art. 34 (2) EuErbVO excludes renvoi and further referral, among other things, for choices of law under Art. 22. A court that applies the EuErbVO therefore applies the chosen law directly. The choice of law can thus take effect precisely where, without it, a renvoi would lead to a split.
Second, the choice of law binds no third state. If the property is situated in a state whose courts and registers apply exclusively their law of the place of situation, that law can remain decisive even where a legal system has been chosen. The land register or register on the spot follows its own law. The split can therefore continue to exist there, although a court in the EU would decide differently.
Third, the choice of law takes effect only for the law applicable to the succession. The property law of the state where the property is situated, the form of the transfer of ownership and inheritance tax law remain unaffected.
Further Means of Avoiding or Mitigating the Split
Whether a split can be avoided depends on the state in which the assets are located. The following overview names the usual starting points; which of them are possible on the spot must be examined by an adviser in the state where the property is situated.
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| Means | Effect | To be noted |
|---|---|---|
| Choice of law under Art. 22 EuErbVO | the chosen law applies in the EU proceedings without renvoi | does not bind third states, requires nationality |
| Transfer of the property during lifetime | the property no longer falls into the estate | gift tax, supplementary compulsory portion, costs, recovery; see Lifetime transfers of assets |
| Contribution to a company or foundation | company shares can be classified as movable property, the rights to the property then lie with the company; what matters is the law called upon by the third state | tax, liability, questions of substance, law of the state where the property is situated; see Family foundation |
| Coordinated dispositions per state | each will regulates only the corresponding partial estate | risk of mutual revocation, coordination of the choices of law |
| Sale of the property before the succession | split falls away | taxes, wish to use the property |
| Relocation of domicile or habitual residence | changes the law under Art. 21 | habitual residence is a question of fact, no instrument for individual cases |
The choice depends on the assets, the family and taxes. A transfer or structuring during lifetime removes the split only if it is effective and the tax consequences can be borne. It has its own risks, which the article on lifetime transfers of assets (link in the table) presents.
Movable and Immovable Property: Where the Line Runs
In practice the split mostly runs along the distinction between movable and immovable property. Land and buildings lie in a fixed place, and many states subject them to their own law and their own registers. Bank balances, securities accounts, company shares and household effects, by contrast, tend to follow the law that applies to the person. This explains why a foreign property so often tips the balance, while the remaining assets unproblematically follow the chosen law or the law of residence.
The classification itself can also be decisive. The Federal Court of Justice classified the share in a community of heirs whose assets consisted of a property as movable property, because the conflict-of-laws rules of New York referred for this question to the German substantive rules and the co-heir therefore has no right in rem in the property (order of 24 June 2026, IV ZB 24/25). This cannot be generalised: what matters is how the law of the third state regulates the question. Anyone who holds real estate through communities or companies should therefore have the classification examined in advance.
A second difficulty concerns the effect of legacies. German law attaches only a contractual effect to legacies: the beneficiary acquires a claim against the heirs. Some legal systems let ownership pass directly upon death. Art. 31 EuErbVO provides for an adjustment only if a right in rem is asserted in a Member State whose law does not know this right. For the legacy with direct effect in rem (Vindikationslegat), by contrast, only the route of passing is at issue: a Member State may not refuse the direct effect in rem of such a legacy merely because its law does not know it, according to the judgment of the Court of Justice of the European Union of 12 October 2017 (C-218/16, Kubicka). This does not apply to third states; an adviser on the spot should be consulted there.
The Legal Position before August 2015
For older successions, nationality mattered under the earlier German conflict-of-laws rules. A split could also arise then, for example because foreign law referred to the law of the place of situation for land or because the individual statute took precedence over the overall statute. Anyone who has dispositions from that time should check whether they harmonise with today’s rules. A succession occurring after 16 August 2015 follows the EuErbVO even if the disposition is older; for choices of law from the transitional period, special rules of Art. 83 apply. Especially for old dispositions with a foreign connection, a review is advisable.
If the Split Remains: Coordinate Instead of Hope
If it cannot be avoided, coordination is what matters:
- Name the partial estates. Determine which assets are subject to which law, and restrict each will to its partial estate.
- Coordinate the choices of law. Where possible, choose the same home law in all dispositions.
- Check revocation clauses. A general revocation clause in a will can catch an earlier will made elsewhere. State clearly that other dispositions remain unaffected.
- Executors and powers of attorney. An executor or authorised representative with knowledge of both legal systems makes administration easier. The power of attorney should be suitable for both legal systems.
- Prepare proofs. The European Certificate of Succession (Europäisches Nachlasszeugnis) takes effect in the Member States of the EuErbVO, not in third states. There the local forms of proof apply.
- Prepare the community of heirs. Anyone who inherits the foreign property jointly needs a solution for administration and partition; see Community of heirs for a foreign property.
Taxes with a Split Estate
Inheritance tax does not follow the law applicable to the succession. Under § 2 Inheritance Tax Act (ErbStG), Germany can in the case of unlimited tax liability tax the acquisition as a whole, and the state where the property is situated can tax in addition. Under § 21 ErbStG, a foreign tax that has been assessed and paid is credited against the German tax on application, to the extent that foreign assets are concerned; a double taxation treaty takes precedence. On treaties see Inheritance tax and double taxation treaties. Where the tax treatment is unclear or in flux, a binding ruling can be applied for from the tax office before implementation under § 89 (2) Fiscal Code (AO); a fee may be charged for this under § 89 (3) to (7) AO. Where there is a foreign connection, a ruling in the other state can usefully supplement this. You should clarify open questions before a transfer during lifetime, because gift tax may arise there.
Typical Mistakes
Choice of law as a universal solution. Anyone who believes that a choice of law removes every split overlooks that registers and courts in the third state apply their own law.
Will without coordination. A will abroad made without knowledge of the German will can revoke the earlier one in whole or in part.
Buying property without an inheritance-law review. Many people think of succession only when the succession occurs. Before acquisition, check how the state where the property is situated treats the property under inheritance law and what taxes arise.
No adviser on the spot. Statements about foreign law can be made only by an adviser admitted there. This article describes only the German and EU-law side.
Conclusion
A split of the estate arises where the legal system at the place where the assets are located connects differently from the EuErbVO, above all for real estate in third states. The choice of law can exclude the renvoi and secure the desired law in the EU proceedings, but it does not bind third states. Often a bundle is more effective: choice of law, coordinated dispositions, where appropriate a transfer during lifetime and a review in the state where the property is situated. Where the split remains, clear partial estates, coordinated dispositions and powers of attorney help.
Frequently Asked Questions
Can a split of the estate always be avoided by a choice of law?
No. The choice of law takes effect within the scope of the EuErbVO. States outside it apply their own law, especially to land.
What is the difference between a split of the estate and unity of the estate?
With unity of the estate, a single law applies to the entire estate. With a split, different laws apply to individual parts.
Does the European Certificate of Succession help against the split?
No. It serves to prove the status of heir in the Member States, but does not change the applicable law and does not apply in third states.
Should I make a separate will for each country?
That can make sense, but carries the risk of mutual revocation. The dispositions must be coordinated with one another and each restricted to its partial estate.
Is double inheritance tax also payable with a split estate?
It can occur. A foreign tax that has been assessed and paid can be credited on application under § 21 ErbStG, to the extent that foreign assets are concerned; a double taxation treaty takes precedence.
Attorney Dr. Johannes Fiala and the law firm, with a focus on international inheritance law, tax law and asset protection in Munich, advise owners of foreign real estate and their families on avoiding a split of the estate, from reviewing the applicable law through the choice of law and coordinated wills to cooperation with advisers in the state where the property is situated. Dr. Fiala has published extensively on questions of emigration and asset protection. Contact the firm without obligation to have your individual situation discussed in an initial consultation.
