Recommendations regarding inherentance legalities

[Serenajean1]

Welp I am back, sadly not on the most pleasent grounds. I lost my mom last month and am now navigating the financial leaglities of inherentance in form of life insurance and 401k investments. I am at a complete loss of what to do- how to cover my bases, what choices to make or who to turn to. Anyone had similar experiences with inheretance in the United states and how that converts into taxation there as well as here? I want to make sure I proceed correctly without any unexpected plot twists. I am not sure if I need a financial advisor or a tax specialist with experience in international laws, but I would happily take any personal recommendations.

Happy to see so many of you stuck together to create a new haven for expats. I wish you all a beautiful New years.

Best wishes
Serenajean1

[alison]

I'm sorry about your mother. I lost mine in 2016 and think of her every day still.

As I prepare to move to DE, I considered engaging Cerity Partners for tax advice since they are a sponsor of the local German-American Business Association. However, their offering is more focused asset management than taxes. Cerity was kind enough to recommend the following two tax advisers:

Hannes Rieker
A German tax advisor living in Fresno. Runs a small tax practice, and obviously understands German
tax better than most. He would be a great low-cost choice for US taxes once you are gone, with a
small amount of German advice as well.
hrieker@riekercpa.com

Roland Sabates
Very experienced attorney and tax advisor, who can blend together ongoing US tax prep with revised
estate planning for American's headed abroad. He's not a Germany expert, but he has connections and
some knowledge, and he can help you put together the right team.
roland@expatlegal.com

To date I have not spoken to either of them. I'm hesitant because I already have an accountant whom I trust, and really just want advice about financial aspects of moving to Germany.

Hope this helps,
Alison

[PandaMunich]

Welp I am back, sadly not on the most pleasent grounds. I lost my mom last month and am now navigating the financial leaglities of inherentance in form of life insurance and 401k investments. I am at a complete loss of what to do- how to cover my bases, what choices to make or who to turn to. Anyone had similar experiences with inheretance in the United states and how that converts into taxation there as well as here? I want to make sure I proceed correctly without any unexpected plot twists.

Hi Serena-Jean, good to have you back, even if the cause is a sad one.

You need to tell the Finanzamt responsible for inheritance tax in your area about your inheritance, by sending them a notice form.
Just enter your postal code here and within the results, scroll down to the entry "Finanzämter mit der Aufgabe „Erbschaft- und Schenkungsteuer”", i.e. Finanzamt responsible for inheritance tax, so that you know to which Finanzamt to send the form I further down: https://www.bzst.de/DE/Service/Behoerde ... _node.html

The notice form has to be signed by you and needs to arrive at the Finanzamt within 3 months of the day your mum died: https://finanzamt-bw.fv-bwl.de/site/pbs ... schaft.pdf
In this form, you declare the value of everything you inherited from your mum, using the values that they had on the day she died, plus any major gifts she gave you within the last 10 years.
For example, a 401k will consist of investment funds and stocks, so you ask the 401k provider to issue you a certificate what the market value of that 401k was on the day your mum died.
To convert the USD value into €, use the exchange rate of the European Central Bank that was valid on the date of her death (scroll down to "Download a PDF with the exchange rates of a specific day"): https://www.ecb.europa.eu/stats/policy_ ... ex.en.html

If the total value of what you inherited (including any gifts she gave you within the last 10 years before her death) is up to 400,000€ then you will not owe any German inheritance tax, since 400,000€ is the tax-free amount with regards to inheritance tax for an inheritance left by a parent to a child.

Please also read: https://expertise.tax/en/faq-german-tax ... tance_gift

I am not sure if I need a financial advisor or a tax specialist with experience in international laws

The above notice form you can fill in by yourself.
If the Finanzamt then asks you to file an inheritance tax you need a Steuerberater.
But as long as you can provide clear values for everything you inherited, backed up by the necessary supporting documentation, any Steuerberater will do, i.e. also your present Steuerberater.

[Alberto]

I realized now that when my mother in law passed away ca 2yr ago, and my wife inherited half of her small apartment (which is in Japan), we did not inform the FA.I understand we should have done it at the time, and not having done it then we must do it now.

Question:
how to know the value of said apartment? The value is below 400keur threshold, tough other than this I have absolutely no idea

[alma.freya]

I realized now that when my mother in law passed away ca 2yr ago, and my wife inherited half of her small apartment (which is in Japan), we did not inform the FA.I understand we should have done it at the time, and not having done it then we must do it now.

Question:
how to know the value of said apartment? The value is below 400keur threshold, tough other than this I have absolutely no idea

Same thing happened to me. I inherited from a UK friend in 2018 and completely neglected to even check if I had to pay inheritance tax in Germany. It wasn't until my mother died in 2022 that I understood that yes, Germany are indeed expecting taxes on my inheritance.

Fortunately I didn't receive a fine from the FA for the late notification and payment.

[Serenajean1]

Thank you so much for the wonderful information. Now it appears to be baised on date of death and not date of possestion is that correct?

Because its still in part open and not paid out. For examle they are asking if I want to roll over the 401 k or pull it out. I am going to call my bank today and ask if I can open a 401k without being present, but I understand if not, when i pull those funds out they do issue some kind of income voucher that is taxable stateside.

I also know one is supposed to be doing taxes, my mom was my tax expert she was retired from the IRS so I never needed an additional steuerberator.

Anyone have any recommendations in germany for someone who does US taxes also?

Regarding the other posters, I do know many people who never reported it, and have yet to have repricussions, but Im a scaredy cat when it comes to the feds. I am not sure if it can be done retroactively, I am sure there must be but hope someone else can chime in.

[bethannbitt]

If you shut down the account and pull out all the funds you’ll be taxed on the whole proceeds by Uncle Sam immediately, which is generally a costly move. If I were you I would roll it over, which is not a big deal if you are the primary beneficiary.

I would also recommend engaging a CPA in the US. It’ll be far less expensive and you’ll obviously have a far larger pool of folks to draw from. We have a US based CPA for the US filings and a German based Steuerberaterin for the DE filings.

[PandaMunich]

Now it appears to be baised on date of death and not date of possestion is that correct?

Yes.