The most important things first
A house can be transferred during life or only after death, and both paths have different consequences for inheritance, equalization and statutory share. Those who arrange the transfer early can create fair solutions for the children and avoid conflicts later. It is especially important to clearly determine the value of the property in advance and decide whether a balancing payment is necessary or not.
At IMMO-ERBEN GmbH we repeatedly see that early regulation of real estate brings a lot of clarity. That is why it pays off not to put off estate planning when the house should pass to the next generation.
How can a house be transferred during life?
If parents transfer their home to a child before death, this is called an advance on inheritance. The house is credited to the future heir and at the end the entire estate is redistributed. If the property is worth more than the remaining assets, an balancing payment is often required to the other heirs.
Another option is the transfer as a non-compulsory donation. This must be explicitly recorded; otherwise the allocation is not automatically considered as free of balancing obligations. The rights of the other descendants must not be violated, because everyone is entitled to their share.
Often the parental home is also transferred as a mixed donation. The beneficial child receives the property at a price below market value and the difference counts as a donation. A prior property appraisal should be done so that it is clear what amount must be compensated later.
What if the parents want to stay in the house?
If the parents want to continue living in the house but transfer it to the children, two variants are possible: life estate and usufruct. Both models regulate who may use the property and to what extent. A precise contractual solution is required for the exact design.
- The usufruct differs only slightly from ordinary ownership. With an registered usufruct of the parents, they must also bear all costs for administration, maintenance, mortgage interest and taxes. Only measures that exceed ordinary maintenance, such as installing a new heating system, are to be paid by the beneficiary child. The usufruct is a vested right and must therefore be entered in the land register.
- Life estate is a special or limited form of usufruct. The beneficiary may use the premises themselves and may not rent them out. Management as well as insurance premiums, property taxes and mortgage interest are borne by the beneficiary child. Only ordinary maintenance and incidental and consumption costs are borne by the parents.
- In both forms the exact scope of the rights should be contractually established.
What options are there for inheriting a house?
In principle there are three paths: sell, gift or pass on as a mixed donation. Which variant fits depends on whether the parents stay in the house, whether several children are involved and how the eventual payout should be arranged. Importantly, the solution should fit the family situation and not be discussed first in the event of inheritance.
| Variant | Core message | Important point |
|---|---|---|
| Sell | The house is sold during the owners' lifetime. | The sale price is paid by the heirs or third parties. |
| Gift | The property is transferred with little or no consideration. | The statutory shares of the other heirs must be observed. |
| Mixed donation | A part is paid, the rest counts as a donation. | The difference to the market value must be accounted for later. |
What happens with a pure or mixed donation?
In a pure donation, the beneficiary child makes no payment to the parents. Inheritance law then distributes the market value of the property among the heirs, so the person who received the house must compensate the others. The difference to mixed donation mainly lies in the timing and the type of financial settlement.
In a mixed donation, the parents set an amount that is below market value. The difference to market value is the donation share and is distributed among the other heirs when the estate is opened. The beneficiary child must also compensate the other heirs. The amount is smaller because a payment to the parents during their lifetime has already occurred.
What you should pay special attention to
Without clear rules, a seemingly simple transfer can quickly become a conflict among heirs. The decisive factors are the value of the property, the statutory shares and the question whether a balancing payment is planned. Those who clearly document these points lay the foundation for a fair distribution.
Frequently asked questions
When is a transfer during life more sensible than only after death?
What is the difference between advance inheritance and donation?
Why is a property valuation before transfer important?
What happens if only one of several children receives the house?
Those who want to inherit their house should not choose the solution solely by gut feeling but by value, family constellation and intended use. This is where early estate planning starts, because it prevents disputes and makes the transfer legally and financially understandable.
If you are looking for a clean solution to inherit your house, a personal consultation with regard to property, inheritance and family is worthwhile. This allows planning of sale, donation or transfer in the appropriate framework.
Möchten Sie Ihr Haus vererben und Klarheit schaffen?
IMMO-ERBEN GmbH, Toffen