Decide for yourself who should share in your assets - and who should not.
In many countries, especially in Germany, inheritance is subject to statutory succession according to German Civil Code (BGB) § 1924 ff.which regulates the legal succession in detail. These regulations stipulate that close relatives, such as spouses and children, must receive a compulsory portion, as in BGB § 2303 is determined. Even a will in accordance with BGB § 1937 often does not help in such cases, since those entitled to a compulsory BGB § 2303 are protected by law and can assert claims despite dispositions to the contrary. This means that there is no real asset protection against unwanted access.
In order to prevent potential problems, it is advisable to deal with estate planning at an early stage - even if this topic is often perceived as unpleasant.
A life insurance policy with a contractually defined beneficiary arrangement can be an effective instrument for asset structuring. It makes it possible to pass on your assets in a targeted and efficient manner according to your individual wishes, including a percentage distribution. In addition, the contract design offers the option of determining a fixed payout date, for example from the age of 18.
Example scenario
Example scenarioMr. Müller, a wealthy entrepreneur, wants to ensure that his assets go exclusively to his partner and a charitable organization after his death, without his distant relatives being able to make any claims. He takes out a Liechtenstein life insurance policy and names his partner and the organization as the sole beneficiaries. During the term of the contract, Mr. Müller retains all rights to the contract and can change the beneficiaries at any time according to his individual wishes. In addition, the income generated during the term of the contract is exempt from income and capital gains tax.
In the event of death, the Payout exempt from income and capital gains tax directly to the beneficiaries in accordance with Insurance Contract Act (VVG) § 166which means that the benefit does not form part of the estate. As the life insurance does not form part of the estate, statutory compulsory portion claims remain unaffected. Mr. Müller has thus structured his asset succession according to his individual ideas and as tax-neutrally as possible.
Conclusion:
The statutory inheritance regulations can be designed flexibly through targeted structures. The use of a life insurance policy offers a way to protect assets after individual wishes as tax-neutral as possible and statutory compulsory portion claims pursuant to BGB § 2303 to minimize.
