Community of inheritors

If the deceased leaves behind several inheritors the estate is devolved upon this community of inheritors by law. The characteristic feature of such community of inheritors is the collective ownership of the estate. Before one inheritor can keep an item belonging to the estate for himself or transfer it to third parties the community must be dissolved and the respective item must be allotted to him in the course of the distribution among the inheritors. However, the dissolution of the community and the allotment is subject to the prior unanimous consent of all community members. Should such settlement not be reached each inheritor is entitled to initiate a compulsory partition in regard to the specific item by public auction. The proceeds are to be distributed among the inheritors according to their share.

Individuals who are entitled to a legal portion only as well as legatees stand outside and do not participate in the community of inheritors. They have to raise their claims against the inheritors and pursue them at the civil courts.

The following two examples indicate the risks and difficulty incurred with the dissolution of communities of inheritors

1. Anton and his wife have elected by agreement the separation of property as their matrimonial regime. They have 3 children: Armin, Albert and Andreas. The family home is recorded in the Land Register under Anton´s name. After his death he bequeathes the real estate and liquid assets of 20.000,00 €. No testament has been found. Due to the matrimonial regime the share of Anton´s wife only amounts to ¼. Each of the three children participates with a share of ¼, too. Should in this situation one child seek to convert his share into cash and should Anton´s wife due to her little pension not be able to receive a bank loan to pay out the child she will live under the constant threat to loose her home in a public auction.
   
2. Bert is a company owner and after his death he leaves behind 2 children as well as his wife Erna. The real estate on which the business is run is carried in the account books with its nominal value of 10.000,00 €. However, its current market price shall be 200.000,00 €. Due to their participation in the community of inheritors Erna and the children become co-owners of the business. Erna takes the control of the management and the community of inheritors agree that the children shall be paid out. This mode for the dissolution of the community incurs the disclosure of the difference between the book value of the real estate and its actual market value. As a result, the children realize a taxable profit from the transfer of their share in the company to their mother.
   

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