Recent case law on the duties of an executor

Germany’s Federal Court of Justice (FCJ) had to decide on the matter of whether the executor’s right of disposal extends to a claim to a compulsory portion of the deceased’s estate (judgment of 5 November 2014, ref. IV ZR 104/14).

The judgment was based on the following case: The testator died one and a half years after his mother who had disinherited him by testamentary disposition. In his will the testator had arranged for executorship. The executor now asserted a claim to the son’s compulsory portion against the mother’s heirs. They argued that the executor was not authorised to assert the claim to a compulsory portion and that the claim could only be asserted by the son’s heirs. The FCJ opposed this with the following reasoning: executorship extends in principle to the entire estate unless the testator has explicitly specified otherwise. Only inviolable rights of the testator, which do not form part of the estate as they are not heritable, are excluded from administration by the executor. But these do not include claims to a compulsory portion; according to explicit legal regulation (Section 2317 (2) German Civil Code) these are heritable and transferrable. In addition, the treatment of claims to a compulsory portion in social welfare law shows that they are not inviolable rights: if a recipient of social welfare acquires a claim to a compulsory portion, this can be transferred to and asserted by the social welfare authorities. The FCJ also explains that the claim to a compulsory portion is also not a legal position which could only be asserted by the heirs and not by the executor due to its legal nature, such as the co-heirs’ share of the estate or the right to accept or reject the inheritance.

Finally, the FCJ refers to its jurisprudence on the administrative powers of the executor with regard to the co-heirs’ shares of the estate (FCJ, 9 May 1984, ref. IV a ZR 234/82). If the testator was a member of a community of heirs, this co-heirs’ share is covered by the administrative powers of the executor. This must then certainly apply to claims to a compulsory portion.

In practice this means executors are not only authorised to assert claims to a compulsory portion on behalf of the testator, but they are duty-bound to do so. If an executor allows the claim to a compulsory portion to become time-barred, he becomes liable to the heirs for damages. Upon assuming the office of executor, as part of the documentation of the estate it is therefore always advisable to check whether the testator may have had a claim to a compulsory portion of the estate of a deceased relative. It must be taken into account that a claim to a compulsory portion can exist even if the testator was appointed heir or was made a bequest in the deceased relative’s will, but his stake in the estate falls below the value of his compulsory portion (known as the supplementary compulsory portion; “Zusatzpflichtteil”) or the prior made gratuitous dispositions during his lifetime (e.g. gifts to the spouse, large endowments to a charity) which trigger a claim to supplement the compulsory portion (“Pflichtteilsergänzungsanspruch”).