Transferring property during your lifetime

What should be regulated in the transfer agreement (Überlassungsvertrag)

• Usufruct (Nießbrauch) or right of residence (Wohnrecht): the parents secure their right to continue living in the house or to receive the rents.
• Reclaim rights: for example if the child dies before the parents, divorces, sells the house or becomes insolvent.
• Care and support: who provides which services, and what applies if they are not provided?
• Siblings: should they be compensated, and will the transfer be counted towards their share of the inheritance or compulsory portion?

Compulsory portion and the ten-year period

Gifts can trigger supplementary compulsory portion claims by the other children. They are reduced by one tenth for each year. However, if the parents reserve a comprehensive usufruct, according to case law the period does not begin to run at all. A waiver of the compulsory portion by the siblings before a notary creates certainty.

Tax and social assistance

The same tax allowances apply to gifts as to inheritances, for example currently 400,000 euros per child and parent, and they become available again every ten years. If the parents become needy within ten years, the social assistance authority may have the gift reclaimed. Both should be taken into account in the arrangement.

How we proceed

We discuss your goals with the whole family, propose a suitable arrangement and summarise the key points for the notary. We review the notary's draft contract for you before it is notarised.