Waiver of the Compulsory Share in an International Estate: Validity, Form and Tax Consequences of the Waiver Agreement

Published on 20.09.2026

Cross-Border Compulsory Share Waivers

Note: With the article Compulsory share rights and assets abroad: how to enforce claims across borders, the firm has already published a piece that includes, among other things, a section on the waiver of the compulsory share on emigration. The present article therefore overlaps in some basics (Section 2346 BGB (German Civil Code), Article 25 EU Succession Regulation, ordre public), but treats the waiver agreement as a stand-alone structuring instrument in considerably greater depth: with a focus on the contracting parties and form (Sections 2347 et seq. BGB), the separation of substantive validity (Article 25 EU Succession Regulation) from formal validity (Article 27 EU Succession Regulation), the concrete risk of non-recognition in states without a comparable institution, the differentiated taxation of compensation payments (Section 7(1) no. 5 ErbStG (German Inheritance Tax Act) versus Section 3(2) no. 4 ErbStG), and the contesting, cancellation and costs of the waiver agreement. While the existing article deals with enforcing an already accrued compulsory share claim against assets abroad, this article is about forward-looking contractual structuring, by which such a claim is to be effectively excluded or limited from the outset.

Anyone considering a waiver of the compulsory share, whether as testator or as a potential person entitled to it, usually does so for a clear economic or family motive – protecting the surviving spouse, safeguarding a business succession or avoiding later disputes. As soon as a foreign element is added – a party lives abroad, some of the assets are located there, or a move is foreseeable – a well-known feature of German succession law turns into a construct with several legal uncertainties: does a waiver notarised in Germany still apply if the testator later moves his habitual residence abroad? Does the other state recognise an agreement of this kind at all? And how is a compensation paid in return treated for tax purposes if the payer or recipient is resident abroad? This article places these questions in a systematic framework.

Section 2346 BGB: Waiver of Inheritance and Waiver of the Compulsory Share as Two Levels of One Instrument

The legal basis is Section 2346 BGB. Under Section 2346(1) BGB, relatives of the testator, as well as his spouse or registered life partner, may waive their statutory right of inheritance by contract with the testator – with the result that the waiving person is excluded from statutory succession “as if he had not been alive at the time of the succession”, and at the same time loses his compulsory share claim. This is the comprehensive waiver of inheritance (Erbverzicht).

Section 2346(2) BGB also opens up the weaker variant, which is considerably more common in practice: the waiver can be limited to the right to a compulsory share. In this waiver of the compulsory share (Pflichtteilsverzicht), the waiving person’s position as statutory heir remains completely unaffected – so, unless a will provides otherwise, he remains a statutory heir. What is waived is merely the claim to demand a monetary compensation under Section 2303 BGB in the event of disinheritance or of a bequest below the compulsory share quota. This distinction is no academic subtlety: a testator whose primary aim is to safeguard freedom of testation – for example to protect a so-called Berlin will (a joint will of spouses appointing each other as sole heirs, with the children as final heirs) against compulsory share claims by the children after the first death – as a rule needs only the limited waiver of the compulsory share, not the full waiver of inheritance.

The waiver must also be distinguished from the disclaimer of the inheritance (Sections 1942 et seq. BGB): the waiver is agreed by contract during the testator’s lifetime, whereas the disclaimer is declared unilaterally only after the succession. Where a waiver is made in favour of a third party, Section 2350 BGB provides that, in case of doubt, the waiver applies only if the beneficiary actually becomes heir; where a descendant of the testator waives, it is presumed in case of doubt that the waiver is to operate only in favour of the other descendants and the spouse – an increase of the compulsory share quotas of other entitled persons thus does not occur automatically but only if this is expressly agreed.

Contracting Parties, Legal Capacity and Notarial Form

The waiver agreement is concluded exclusively between the testator and the (potential) relative entitled to a compulsory share – not among several future persons entitled to a compulsory share. Under Section 2347 BGB, the testator can conclude the agreement only in person; if his legal capacity is merely limited, the consent of his legal representative is not required for this. If the testator lacks legal capacity altogether, by contrast, the agreement may exceptionally be concluded by the legal representative. The waiving person himself, on the other hand, may be represented when concluding the agreement.

Under Section 2348 BGB, notarial recording is a mandatory condition of validity. A waiver agreed informally or merely in private written form is void. The costs of the notarisation are governed by the German Court and Notary Fees Act (Gerichts- und Notarkostengesetz, GNotKG): under Section 102(4) GNotKG the basis of calculation is regularly a fraction of the future testator’s assets – adjusted for debts – at the time of the notarisation, measured by the compulsory share quota of the waiving person; the notary charges double (2.0) the fee on this. With a transaction value determined in this way of EUR 50,000, the notary costs alone are on the order of about EUR 330, at EUR 100,000 about EUR 490 and at EUR 500,000 about EUR 1,870 – in each case plus flat-rate expenses and VAT. The actual amount always depends on the specific transaction value determined in the individual case.

Scope of the Waiver: What Is Affected – and What Is Not

According to the clearly prevailing view, an unrestricted waiver of the compulsory share covers not only the ordinary compulsory share claim but in principle also the adjustment compulsory share under Section 2316 BGB, any residual compulsory share claims and the supplementary compulsory share claim under Sections 2325 et seq. BGB against the testator. The waiver can, however – and this is of particular practical importance for contract design – also be agreed in limited form: for example in terms of amount, in relation to certain future transfers, or subject to a condition precedent or subsequent.

In advisory practice, the waiver is typically agreed for one of several recurring motives: to protect the longer-living spouse under a Berlin will; to avoid liquidity-straining compulsory share claims on the transfer of a business or a property; to protect the family’s assets from the creditors of an over-indebted beneficiary; to equalise, in succession terms, children who have already been generously provided for during the testator’s lifetime; or, in blended-family situations, to reorganise succession by agreement between biological and non-biological children. Against these advantages stands the fact that the waiving person gives up his future compulsory share definitively, without it being clear at the time of the agreement how the estate will actually develop – a circumstance that makes careful calculation of any compensation particularly important.

Substantive Validity in Cross-Border Cases: The Hypothetical Governing Law Under Article 25 EU Succession Regulation

As soon as one of the parties has a foreign connection – for example because the testator plans to move his habitual residence abroad later – the preliminary conflict-of-laws question arises as to which law governs the admissibility and substantive validity of the waiver agreement at all. Within the states bound by the EU Succession Regulation (EuErbVO), this is regulated by Article 25 EuErbVO, which treats the waiver of the compulsory share or of inheritance as a so-called agreement as to succession within the meaning of the Regulation.

Under Article 25(1) EuErbVO, the admissibility, substantive validity and binding effects of an agreement as to succession concerning the estate of a single person – the normal case in a classic waiver of the compulsory share between testator and a child – are governed by the law that, under the Regulation, would have been applicable to the succession if the testator had died on the day the agreement was concluded. This so-called hypothetical governing law is thus “frozen” at the time of notarisation: if the testator moves his habitual residence abroad after the agreement was validly concluded, the substantive validity of the waiver, once validly agreed, is in principle unaffected – an important element of protection of legitimate expectations in favour of waiver agreements already concluded.

If the agreement as to succession exceptionally concerns the estates of several persons – for example in mutual waiver arrangements between spouses, each relating to the future succession to the other’s assets – the agreement is, under Article 25(2) EuErbVO, admissible only if it is admissible under the hypothetical governing law of each of the persons involved; for substantive validity, the law of the person with whom the agreement is most closely connected is decisive. Article 25(3) EuErbVO further permits an express choice of law: the parties may choose for the waiver agreement the law the testator could have chosen under Article 22 EuErbVO in any event – regularly the law of his nationality. A clear structuring recommendation follows for practice: a German national considering a move abroad, or already living abroad, should anchor in the waiver agreement itself an express choice of German law under Article 25(3) EuErbVO, rather than relying solely on the objective connecting factor of Article 25(1) EuErbVO, which in an individual case may require interpretation. How such a choice of law in a will or agreement as to succession is worded in a legally secure manner is treated in more depth in the article Will and foreign residence: which succession law applies to your estate?.

Form Separate From Validity: Article 27 EuErbVO

Strictly to be separated from substantive validity is the formal validity of the waiver agreement, which is governed not by Article 25 but by Article 27 EuErbVO. This provision allows a whole series of alternative connecting factors to suffice for form – among others the law of the state where the instrument was executed, the national law, the law of the domicile or habitual residence of the parties, in each case as at the time of execution or the time of death. A waiver agreement validly notarised before a German notary under Section 2348 BGB therefore as a rule satisfies the formal requirements of Article 27 EuErbVO, regardless of where the parties later live. The practically decisive hurdle therefore regularly lies not in form but – as set out in the preceding section – in substantive validity under Article 25 EuErbVO: a formally impeccable notarised agreement can nevertheless be substantively invalid if the law that governs under Article 25 does not recognise a waiver of this kind at all.

Where a German Waiver Can Come to Nothing: States Without a Comparable Institution

The contractual waiver of the compulsory share or of inheritance is by no means a matter of course internationally. It is recognised in Germany, Austria, Switzerland and in Scandinavian and numerous Anglo-American legal systems, among others, whereas large parts of the Romanic legal systems traditionally do not allow it, or allow it only in a highly restricted way – with noticeable softening over the last two decades: France introduced, with the succession law reform of 2006 (in force since 1 January 2007, Articles 929 et seq. Code civil), the “renonciation anticipée à l’action en réduction”, an advance waiver of the action for reduction against excessive gifts in favour of certain persons, which must be declared before two notaries. Italy has recognised since 2006 the “patto di famiglia” as a contractual instrument in the context of business succession. Austrian law, too, regulates the waiver of the compulsory share by contract (Section 551 ABGB (Austrian Civil Code)) and provides in Section 760(1) ABGB that the waiver does not, in case of doubt, increase the compulsory shares of the other entitled persons – structurally comparable to Section 2350(2) BGB.

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This overview is necessarily simplified; whether and in what form a waiver is permissible in an individual case depends on the specific legal system and often on regional particularities, and always requires review by an adviser experienced in the respective local law.

The Risk of Non-Recognition – and How to Guard Against It

The real practical risk of cross-border structuring follows from the interplay of Article 25 EuErbVO and the inconsistent national rules: if the waiver agreement is concluded only after the testator has already moved his habitual residence to a state that does not know such an agreement, the hypothetical governing law at the time of the agreement is the law of that state – with the result that the waiver can be substantively invalid even if it was notarised before a German notary and thus satisfies the formal requirements of Article 27 EuErbVO. If there is no express choice of German law under Article 25(3) EuErbVO, this risk exists irrespective of whether the testator remains a German national.

Within the member states bound by the EuErbVO, every national court in principle applies the same uniform conflict rule of Article 25, so that a waiver that is effective under this rule should, as a starting point, be recognised throughout the Union. A residual risk nevertheless remains: every member state can – just as in the case of a choice of law under Article 22 EuErbVO – invoke its own public policy reservation (ordre public) under Article 35 EuErbVO if the application of the law that would otherwise apply would be manifestly incompatible with its public policy. That German courts apply this reservation restrictively but certainly in individual cases was shown by the BGH (Federal Court of Justice) in its judgment of 29 June 2022 (IV ZR 110/21), using the example of a choice of English law which, given a strong domestic connection, would have deprived a child of any needs-independent compulsory share claim. The decision was based on a choice of law under Article 22 EuErbVO and not on a waiver agreement under Article 25 EuErbVO; it does show, however, that the ordre public reservation can operate in both directions – another member state might also, in the reverse case, refuse recognition of a German waiver if it regards its result as incompatible with its own fundamental values on the protection of close relatives. Final legal certainty cannot be guaranteed here; it can, however, be considerably increased by an express choice of law anchored in the agreement and by a parallel review of the legal position in the likely future state of residence. Outside the scope of the EuErbVO – in Denmark and Ireland as EU member states not bound by it and in third countries such as Switzerland, the United Kingdom or the USA – the respective national private international law, independent of the Regulation, applies in any event, so that a separate review is unavoidable.

Compensation Payments: Gift Tax or Inheritance Tax?

A waiver of the compulsory share is in practice agreed very predominantly against payment of a compensation. For tax purposes, a distinction must be made which even in the specialist literature is often presented only in abbreviated form, but which is of considerable importance for structuring:

Waiver during the testator’s lifetime (Section 2346 BGB). If the agreement is – as in the normal case – concluded before the succession has occurred, the compensation granted for it is deemed a gift between living persons under Section 7(1) no. 5 ErbStG. The taxpayer is the waiving person; the donor for gift tax purposes is regularly the future testator. The decisive factor for tax class and allowance is therefore the family relationship between the testator and the waiving person: for a child, tax class I applies with an allowance currently of EUR 400,000, which can be claimed anew every ten years.

Waiver of an already accrued compulsory share claim (after the succession). If a person entitled to a compulsory share waives only after the testator’s death, against compensation, an already accrued claim that has not yet been quantified or asserted, Section 3(2) no. 4 ErbStG applies instead: by statutory fiction, the compensation is deemed an acquisition upon death granted by the testator – irrespective of the fact that it is in practice usually the heir or heirs who make the payment. Here too, therefore, the tax class is determined by the relationship between the testator and the person entitled to the compulsory share, not by the relationship to the heir who actually pays – a circumstance that, given a corresponding gap in kinship (for example if a sibling pays the compensation), can turn out considerably more or less favourable for tax purposes than it appears at first sight.

If, by contrast, no consideration at all is agreed, the gratuitous waiver as such in principle triggers no gift or inheritance tax, since no transfer of assets takes place; only a compensation actually paid is taxed.

Where there is a foreign connection, a further level is added to this domestic fork in the road: if the testator, the waiving person or the payer is resident abroad, it must first be clarified whether unlimited German tax liability under Section 2 ErbStG exists at all and – if so – whether the destination state also treats the compensation as a taxable event under its own law. Since Germany has concluded double taxation treaties in the field of inheritance and gift tax with only a few states, and many of these treaties are, in their material scope, not readily tailored to compensation payments for a waiver of the compulsory share, there is a real risk of double taxation. Credit for foreign tax against German inheritance tax is possible within certain limits even without a treaty under Section 21 ErbStG. The details of the German double taxation treaties in inheritance tax law and the conditions for crediting foreign tax are dealt with in detail in the article Inheritance tax and double taxation treaties: when assets abroad are taxed twice.

Contesting and Cancelling the Waiver Agreement

Like any legal transaction, the waiver agreement can be void for immorality under Section 138 BGB, for example where a compensation is agreed that is evidently inadequate in the individual case and was agreed by exploiting a position of duress. In addition, avoidance under the general provisions of Sections 119 et seq. and 123 BGB may be considered, in particular for mistake as to the content of the declaration, fraudulent misrepresentation or unlawful threat. A later, fundamental deterioration of the testator’s financial situation compared with the assumptions underlying the agreement may in an individual case become relevant under the aspect of frustration of the basis of the transaction, but, in view of the uncertainty about the future development of the estate that the parties knowingly accepted, is only a narrow exception.

The waiver agreement can also be cancelled by mutual consent. Under Section 2351 BGB, the same formal requirements apply to the cancellation agreement as to the original waiver: it also requires notarisation under Section 2348 BGB and – as regards the testator – is possible only during his lifetime and in person. A unilateral withdrawal from the waiver, by contrast, is not provided for by law.

Checklist: Structuring a Waiver of the Compulsory Share With a Foreign Element Effectively

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Hypothetical Example

Purely for illustration, with no connection to any real client matter: an entrepreneur resident in Munich agrees with one of his two children a notarised waiver of the compulsory share against a staggered compensation, in order to secure succession in the family business solely through the second child. Ten years later the entrepreneur permanently moves his habitual residence to Spain. Since the waiver agreement was concluded at a time when the hypothetical governing law under Article 25(1) EuErbVO was still German law, the waiver remains substantively valid after the move – unlike the case where the agreement had been concluded only after the move to Spain and without an express choice of law. This example serves solely to illustrate the legal position and does not describe a real case.

Conclusion

The waiver agreement on the compulsory share is an effective but formally strict structuring instrument – and, in an international context, an instrument with several risk levels that must be clearly separated: substantive validity under Article 25 EuErbVO, formal validity under Article 27 EuErbVO, which is independent of it, the residual risk of non-recognition in states without a comparable institution, and the differentiated taxation of an agreed compensation depending on whether the waiver is declared during lifetime or only after the succession. Anyone who keeps these levels cleanly apart when drafting the agreement and in particular includes an express choice of law in it can considerably reduce the remaining legal uncertainty – it cannot, however, be excluded completely, given the diversity of national succession law systems.

Attorney Dr. Johannes Fiala and the firm, with a focus on international succession law and asset protection, accompany testators and persons entitled to a compulsory share in the legally secure structuring of waiver agreements with a foreign connection – from the choice-of-law clause and the tax classification of the compensation to coordination with foreign advisers. Contact the firm without obligation to discuss your project in an initial consultation.