Taxing inheritance - Writing a Will

[Nixon]

Hello all,

I am supposed to do a penicillin allergy test on Monday (staying in a hospital for 3 nights) and just remembered that it can take me away and that I don't have a will. You never know.
I have a few properties in the US and they would go to my wife and daughters. We are all German residents/US citizens.

My questions are:
1. How Germany taxes value of a property, value on purchase date or value at the time of death? How is that value calculated if it is the value at the time of death?
2. Is it better to give properties to daughters as a bulk through an LLC that already exist, or to separate them and name individually which house goes to who?
3. Maybe there is something else that I don't see?

Thanks, regards, and hopefully writing again on Thursday

Nixon

[alison]

I've been seeking a German tax advisor who also knows US tax law in vain. If you encounter one, please speak up!

Thanks,
Alison

[PandaMunich]

1. How Germany taxes value of a property, value on purchase date or value at the time of death? How is that value calculated if it is the value at the time of death?

Market value on date of death.

2. Is it better to give properties to daughters as a bulk through an LLC that already exist, or to separate them and name individually which house goes to who?

I doesn't matter for German inheritance, the market value of all your assets will anyway get added up and that, minus their individual inheritance tax free allowance, will be what each of your heirs will have to tax.

If you die without a will, your wife will get and have to tax 50% of your assets minus her personal allowances, she gets two, 500,000€ as the wife and a flat-rate 256,000€ to compensate her for her Zugewinnausgleich (equalisation of gains during the marriage) - of course, if the real Zugewinn is higher, she can calculate it and use that instead.
And the other 50% will be split up between your children (each child gets a 400,000€ tax-free allowance).
Please read this: https://expertise.tax/en/faq-german-tax ... tance_gift

However, to avoid later arguments between the children, I would have each heir have their own property.

3. Maybe there is something else that I don't see?

Yes, you should have been transferring your assets as gifts all along!
These tax-free allowances (500k€ to the spouse and 400k€ to each child) reset every 10 years, so get to re-use them every 10 years.

If the property is worth more than 400k€, you can use Vorbehaltsnießbrauch to lower the value of the gift to under the tax-free allowance, so as to not have to pay gift tax: https://www-juhn-com.translate.goog/fac ... r_pto=wapp