Short answer: There is no right to be paid out of a community of heirs (Erbengemeinschaft). Without an order in the will, a payout in the narrower sense as a rule comes about only if the other co-heirs agree (compensation on leaving the community, Abschichtung, or an equalisation payment on taking over an asset) or if the co-heir sells his or her share of the estate (§ 2033 German Civil Code, Bürgerliches Gesetzbuch, BGB); otherwise only the division (Auseinandersetzung) can be enforced (§ 2042 BGB). The decisive factor for the amount is the value of the share in the estate after deducting liabilities, multiplied by the inheritance share. For tax purposes, inheritance tax, income tax (§ 23 EStG) and real estate transfer tax must be examined separately.
Anyone who sits in a community of heirs and wants money instead of a share in the house first asks: can I be paid out my share, and how much am I entitled to? The answer has two parts. Legally, the payout depends on the cooperation of the co-heirs, unless one sells the share of the estate to a third party. Economically, what matters is a sound valuation, debts and advances received, and the tax consequences of the payment. This question is also frequent among co-heirs living abroad, for example when siblings in different countries inherit a German property. Other routes of dissolution, the partition auction and a blockade by a co-heir are covered on separate pages. The legal position is October 2026.
Is There a Right to a Payout?
There is no right to a payout by the co-heirs; the law knows as the normal case the division by realisation and distribution. Each co-heir can demand the division (§ 2042 (1) BGB). It follows the rules on communities: division in kind, otherwise sale and division of the proceeds, for real estate by compulsory auction (§ 2042 (2), § 752 and § 753 (1) BGB). That a co-heir takes over the house and pays out the others is an agreement that all must support, not a statutory consequence. Whether the testator mapped out this solution in the will is therefore the first question.
If the testator assigned a house to the co-heir by a division order (Teilungsanordnung, § 2048 BGB), the co-heir must equalise the excess value relative to his or her share towards the other co-heirs. The order as a rule creates the duty to carry out the division accordingly, but does not change the inheritance shares. Whether a prior legacy (Vorausvermächtnis), in which no equalisation is owed, was meant instead of a division order depends on the interpretation of the will and should not be decided alone. On the role of children and compulsory portions, also read the article Compulsory portion and inheritance of children.
The Three Routes to a Payout
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| Route | Who pays? | Who must agree? | Form |
|---|---|---|---|
| Takeover against an equalisation payment (division contract) | The co-heir taking over | All co-heirs | For real estate notarial (§ 311b (1) BGB) |
| Abschichtung against compensation | The remaining co-heirs out of the estate | All other co-heirs | In principle free of form; transfer of a property as compensation requires form |
| Sale of the share of the estate | The buyer (co-heir or third party) | Nobody, but a right of pre-emption of the co-heirs on sale to a third party | Notarisation (§ 2033 (1), § 2371 BGB) |
Takeover against equalisation. A co-heir takes over a house, apartment or other asset and pays the others the value of their shares. This makes sense if someone wants to use or keep the property and can raise the money, usually by a loan. Before payment, the membership in the estate, encumbrances in the land register and the estate liabilities should be clarified.
Abschichtung. The leaving co-heir declares to all the others that he or she is leaving the community and receives compensation for it; his or her share accrues to those who remain. The Federal Court of Justice (Bundesgerichtshof) has decided that this is possible without any form even where the estate includes real estate (judgment of 21 January 1998, Az. IV ZR 346/96, BGHZ 138, 8 = NJW 1998, 1557); the transfer of a property as compensation, on the other hand, requires form. The community continues with the other co-heirs. A payout this way is voluntary; anyone in a dispute cannot demand it.
Sale of the share of the estate. Anyone who wants to be paid out without the co-heirs playing along sells his or her share. The contract and the transfer require notarisation (§ 2033 (1), § 2371 BGB). On sale to a third party, the other co-heirs can exercise a right of pre-emption within two months (§ 2034 BGB) and can exercise it against the buyer even after the transfer (§ 2035 BGB). For the seller this means: after the purchase contract the buyer may change, the conditions remain. Whether third parties are willing to buy and what discount they expect is a matter of negotiation; shares in a community of heirs are hard for buyers to use, because they need the cooperation of the other co-heirs. No reliable statements can be made about price discounts without a market offer.
A trap for married co-heirs: if the share of the estate essentially consists of the seller’s entire assets and he or she lives in the statutory matrimonial property regime, the sale of the share may require the spouse’s consent under § 1365 BGB. This should be checked before the notary appointment.
How Much Am I Entitled To? The Calculation
The payout follows the value of the estate after deducting liabilities, multiplied by the inheritance share. In practice there are six steps:
- Establish the estate. Record all assets and liabilities: property, accounts, securities accounts, household effects, receivables and debts. The co-heirs owe one another cooperation in proper administration (§ 2038 (1) sentence 2 BGB). A general claim for information among co-heirs cannot readily be derived from this; duties to give information exist above all in special cases, for example for gifts subject to equalisation (§ 2057 BGB).
- Determine the value of the property. For the payout, the value at the time of division counts, not the value at the date of death; an expert accepted by all should be instructed. The valuation rules of inheritance tax law may deviate from the market value and are not suited as a basis for negotiation.
- Deduct liabilities. The estate liabilities are to be settled first out of the estate; disputed and not yet due items are retained (§ 2046 (1) BGB).
- Take equalisations into account. Descendants who inherit as statutory heirs must equalise certain lifetime gifts from the testator (§§ 2050 ff. BGB); the value is determined by the time of the gift (§ 2055 (2) BGB). Special services by a descendant, for example care, can justify an equalisation in his or her favour (§ 2057a BGB).
- Apply the share. The surplus is due to the heirs in proportion to their shares (§ 2047 (1) BGB).
- Clarify ancillary items. Income such as rent is divided only at the division (§ 2038 (2) sentence 2 BGB); costs and burdens are borne by the co-heirs according to their shares (§ 2038 (2) in conjunction with § 748 BGB).
Example (fictitious): Anna, Ben and Clara each inherit a third. According to an expert opinion the house has a value of 450,000 euros, a loan of 90,000 euros is secured on it, and 30,000 euros are in an account. Net, this gives 390,000 euros, 130,000 euros per third. If Clara takes over the house together with the loan and the account, she receives assets of net 390,000 euros and pays out Anna and Ben 130,000 euros each, together 260,000 euros. If Ben received from the father during his lifetime a dowry (Ausstattung) subject to equalisation of 30,000 euros, it is added to the estate arithmetically: 420,000 euros give 140,000 euros each, Ben must have his 30,000 euros credited and receives 110,000 euros, Anna and Clara 140,000 euros each. The figures are invented and serve only as illustration.
Anyone who sells the share of the estate to a third party as a rule receives less than the proportionate value, because the buyer bears the risk of not being able to steer the community alone. Anyone who only wants to compare the amount should put two figures side by side: the proportionate value according to the calculation above and the offer. A figure for the usual discount cannot be stated seriously.
Securing the Payment and Liability
A payout should be made only against the declaration by which the co-heir leaves or transfers his or her share. For notarial contracts the procedure can be steered through the notary, for example payment after registration or deposit of the amount. For contracts with exchange of performances, the transaction value follows the higher value of the performances (§ 97 (3) GNotKG), and the notarisation fee is 2.0, at least 120 euros (no. 21100 KV GNotKG).
On liability: leaving does not automatically mean that estate creditors can no longer access the co-heir. The heirs are liable for joint estate liabilities as joint and several debtors (§ 2058 BGB); until the division the co-heir can refuse payment out of his or her own assets (§ 2059 (1) BGB); after the division the limitation to the proportionate part applies only in certain cases, for example on exclusion in a public-notice procedure or on registration after five years (§ 2060 BGB). Anyone who is paid out should agree in the contract on an internal indemnity by those who remain. The buyer of a share of the estate is liable to the estate creditors from conclusion of the purchase alongside the seller, who remains liable (§ 2382 (1) BGB); for the limitation of his or her liability, the rules on the limitation of the heir’s liability apply (§ 2383 BGB). If overindebtedness is suspected, it must first be examined how liability can be limited; see the article on estate insolvency with a foreign connection.
Tax on the Payout
Inheritance tax. The acquisition upon death is taxed according to the inheritance share. The division in principle changes nothing. If, in the course of the division, a co-heir receives considerably more than he or she is entitled to, without appropriate equalisation, this may amount to an additional benefit among the co-heirs; on the distinction between inheritance tax and gift tax see Gift tax and inheritance tax. Costs that arise for the acquirer directly in connection with the handling, settlement or distribution of the estate are deducted as a lump sum of 15,000 euros without proof (§ 10 (5) no. 3 ErbStG); administration costs are not deductible. The 15,000 euros apply if the tax arose after 31 December 2024 (§ 37 (21) ErbStG); before that it was 10,300 euros. The lump sum is granted only once per succession and is due to co-heirs only proportionally (BFH, order of 24 February 2010, Az. II R 31/08, BStBl II 2010, 491, on the earlier amount; the principle continues to apply). The allowances under § 16 (1) ErbStG presuppose unlimited tax liability; for limited tax liability § 16 (2) ErbStG applies.
Income tax. According to the BMF circular of 14 March 2006 (BStBl I 2006 p. 253, amended since), a division without an equalisation payment in private assets is in principle without consideration. If a co-heir, on the other hand, pays compensation for receiving more, a transaction for consideration exists to that extent. This also applies on leaving against a cash payment by way of Abschichtung; there the principles on the sale of a share of the estate apply (marginal no. 50 of the BMF circular), on leaving without compensation the principles of gifts (marginal no. 49). For real estate, the person leaving can then realise a private disposal transaction if there are no more than ten years between acquisition (by the testator) and disposal (§ 23 (1) sentence 1 no. 1 EStG); excepted are assets that were used exclusively for the person’s own residential purposes in the period between acquisition and disposal (§ 23 (1) sentence 1 no. 1 sentence 3 EStG). For income tax purposes, the sale of a share of the estate counts as a proportionate disposal of the estate assets (§ 23 (1) sentence 4 EStG). If there are no more than ten years between the testator’s acquisition of an estate property and the sale of the share of the estate, the gain can be taxable. The Federal Fiscal Court (Bundesfinanzhof) had initially seen this differently for the acquisition of a share of the estate (judgment of 26 September 2023, Az. IX R 13/22); the legislature then clarified the provision with effect for all open cases. On the period see the speculation period under § 23 EStG.
Real estate transfer tax. The acquisition of an estate property by co-heirs for the purpose of dividing the estate is exempt from real estate transfer tax (§ 3 no. 3 GrEStG). If the property is passed on after the division, the exemption can fall away.
Where the legal position is unclear, for example in classifying an equalisation payment, a binding ruling (verbindliche Auskunft) from the tax office under § 89 (2) AO is recommended before implementation. With a foreign connection, information from the tax authority in the other state may additionally be useful.
When a Foreign Country Is Involved
If a property abroad belongs to the estate or the testator or co-heirs lived there, the applicable inheritance law decides first. In the EU, the general rule links to the habitual residence (Art. 21 (1) EuErbVO, the European Succession Regulation) with the exception for a manifestly closer connection to another state (Art. 21 (2) EuErbVO); Denmark and Ireland do not apply the Regulation and are regarded as third countries from the German perspective. If German law is applied, the division follows §§ 2042 ff. BGB, but the change in the foreign register follows the law of the state where the property is situated; an adviser on the spot should be consulted. You will find details in the article Community of heirs with foreign real estate.
The Most Common Mistakes When Paying Out
- No joint expert opinion. Anyone who wants to pay out should not use his or her own estimate but an expert whom all accept. Otherwise each side has its own figure.
- Forgetting equalisations and advances. Lifetime gifts among descendants in statutory succession are to be taken into account under §§ 2050 ff. BGB and shift the amounts.
- Oral agreement on payment against the house. The duty to transfer a property requires form (§ 311b (1) BGB); without notarisation, a dispute over payment and ownership threatens.
- Tax not checked before the payment. The ten-year period, real estate transfer tax on further transfer and inheritance tax on extra acquisition must be clarified in advance.
- Liability not regulated in the contract. Co-heirs who are paid out remain liable towards estate creditors; without an indemnity the risk stays with them.
Conclusion
Paying out in a community of heirs means negotiating: there is no statutory claim, but there is the route via the sale of the share of the estate. The amount follows from the value of the estate, liabilities, equalisations and share; it becomes reliable only with a joint expert opinion. Contract, formal requirements and taxes should be settled before the first payment, because mistakes can hardly be corrected afterwards. On placing the payout in the overall estate planning, see also Estate planning.
Frequently Asked Questions
Can I demand that my co-heirs pay me out?
No. There is no right to a payout; the co-heirs must agree to a compensation or takeover. Only the division under the statutory rules (§ 2042 BGB) can be enforced, if necessary by action or partition auction, or the sale of your own share of the estate (§ 2033 BGB).
How high is the payout?
It follows from the value of the estate after deducting liabilities, multiplied by the inheritance share (§§ 2046, 2047 BGB), reduced or increased by equalisations under §§ 2050 ff. BGB. For the property, the value at the time of division counts, preferably by an expert opinion jointly commissioned.
Does the payout have to be notarised?
In part. Notarisation is required if a share of the estate is sold or transferred (§ 2033 (1), § 2371 BGB) or if a property is to be transferred (§ 311b (1) BGB). An Abschichtung against a cash payment is, according to case law, in principle free of form, but should be put in writing.
Is tax payable on the compensation?
That depends on the individual case. Inheritance tax is levied on the acquisition upon death, not on the division. Income tax can arise if the compensation counts as a disposal for consideration of real estate within ten years of acquisition (§ 23 EStG). A binding ruling under § 89 (2) AO provides clarity before implementation.
Am I freed from the testator’s debts after the payout?
Not automatically. Estate creditors can still hold the co-heirs, who are liable as joint and several debtors (§ 2058 BGB). In the internal relationship, liability can be regulated by an indemnity; this has no effect towards the creditors.
Attorney Dr. Johannes Fiala and the law firm, with a focus on international inheritance law, tax law and asset protection in Munich, advise co-heirs on compensation and payout from the community of heirs, from valuing the share through the contract with the co-heirs to the tax review of the payment. 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.
