Erben: Mit diesem Trick bevorzugen Eltern beim Erbe ihr Lieblingskind

Many parents prefer to prefer a favorite child when it comes to inheritance, though they are fully aware that this may incite a legal challenge from siblings later on. The challenge arises because such children have a legal right to an obligatory share. To circumvent this, parents can reduce the obligatory share through gifts. However, this approach is not always feasible.

An alternative is selling the property to the favorite child, which avoids inheritance taxes and allows for interest-free deferral, with discounts allowed and payments made from rental income. But there are pitfalls to this approach. "If the sale is merely a cover for a gift, it risks both tax payments and inheritance rights," warns Dorothea Mund, a lawyer and partner at the law firm Rose & Partner.

Selling instead of gifting may not fully eliminate the obligatory share, as the value of the property may increase over time, leading to a ten percent reduction in the obligatory share each year. If the value exceeds the exemption thresholds, gift tax may also apply. Parents retain their rental income but hinder the erosion of siblings' obligatory share rights.

Selling the property to the favorite child provides the parents with the purchase price and avoids a further burden on the estate. The favorite child benefits mainly from tax savings, as no gift tax is levied on the sale, and the property can be revalued based on the purchase price. Additional levers include discounts on the purchase price.

The purchase price should be based on a market valuation, but often the property is sold at a lower price. While there is some leeway in pricing, there is no guarantee that the tax authorities will accept the valuation. The choice of the appraiser may also influence the outcome. A valuation that is ten to fifteen percent lower than the average may not be challenged by the tax authorities.

However, Holger Hoffmann, a specialist in inheritance law, recommends a further levers: "If the seller retains the right to claim repayment, a ten percent deduction can be made from the purchase price." However, these clauses must not be overly broad, as a general right of withdrawal from the purchase contract is not allowed. Instead, specific scenarios such as the death of the child, the property being subject to compulsory execution, or being the subject of a distribution balancing procedure must be outlined.

If the purchase price is set too low, there is a risk that the tax authorities will classify the transaction as a mixed gift. Even a discount of thirty to forty percent will not automatically result in an obligatory share claim. The classification of the tax authority is not conclusive, and siblings must bear the full burden of proof.

If a subjective gift is indicated in the notarial contract, it will be difficult for them to challenge it. The use of installment payments for the purchase price is an option if the favorite child does not have sufficient liquid assets. The German Federal Court of Justice recently revised its decades-long jurisprudence (case number VIII R 30/24) on interest-free deferral, which previously required calculating a fictitious interest rate that would trigger capital gains tax on the parents and gift tax on the child.

There is no fixed upper limit for the deferral period. However, if the deferral period extends beyond the statistical life expectancy of the parents and the repayment is unlikely to be economically viable, the arrangement will be deemed a partial waiver of the purchase price, triggering a mixed gift. This can be challenged by the obligatory share holders under the obligatory share addition.

An installment payment scheme where the property is cycled back to the parents is not entirely risk-free. "If the rental income and installment payments merely circulate within the family, the tax authorities will quickly deem it a sham transaction and abuse of design," Mund explains. "An important aspect here is a neutral design, with both parties signing a lease agreement, the rent should be at least 66 percent of the market rent, a lease accounting is created, and the payments to the parents must be made separately.

Additionally, the buyer should also pay a portion of the purchase price from their own funds, as they need to withstand an independent comparison, ensuring that the transaction is not merely a sham."