The Disabled Person's Will (Behindertentestament) – Protecting Assets and Securing Quality of Life

Parents of children with disabilities face a particular challenge in estate planning. The aim is to provide for one's own child as well as possible beyond death, without the inherited assets being consumed directly by the German social welfare authority (Sozialhilfeträger). A so-called disabled person's will (Behindertentestament) offers the necessary legal instruments for this.

What problems arise from social welfare recourse in the event of inheritance?

If the German social welfare authority (Sozialhilfeträger – the district or independent city) grants a person with a disability assistance with living expenses under Sections 27 et seq. of the German Social Code Book XII (SGB XII) and assistance with care under Sections 61 et seq. of the German Social Code (SGB VII), a strict principle applies: social welfare is subsidiary (Sections 2 et seq. SGB VII). The person concerned must primarily use their own realizable assets.

In principle, this realizable property also includes any acquisition upon death (Section 90 (1) SGB XII). In the event of inheritance, this leads to the following problems:

• The social welfare authority can seize and realize the disabled child's share of the inheritance.
• If the disabled child is disinherited, the social welfare authority can transfer the child's compulsory-portion claim (Pflichtteil) to itself and assert it against the heirs (Section 93 (1) sentences 1, 4 SGB VII).
• Likewise, claims arising from a legacy (Vermächtnis) to which the disabled child is entitled can be transferred to the social welfare authority.

What structuring goals do parents of children with disabilities typically pursue?

Parents generally want to ensure that their child with a disability is permanently provided for beyond the typical standard of social welfare. In addition, the substance of the assets should ideally be preserved for other family members beyond the death of the disabled child. At the same time, it must be ensured that the acquisition upon death cannot be seized, realized, or transferred to the social welfare authority.

Through which structuring options can social welfare recourse be avoided?

In order to provide for the disabled child without triggering social welfare recourse, marital-agreement and inheritance-law structuring tools come into consideration as a starting point.

What preliminary considerations under marital-property law are advisable?

Even during one's lifetime, the inheritance and compulsory-portion quota of the disabled child can be influenced by choosing the right marital property regime. From two children onward, the statutory community of accrued gains (Zugewinngemeinschaft) is generally advantageous. Precisely controlling this quota is decisive for the effectiveness of the inheritance-law arrangements that follow.

What inheritance-law structuring tools are available?

In practice, two approaches to inheritance-law structuring are particularly suitable:

• Prior and subsequent inheritance solution (Vor- und Nacherbschaft): In the event of inheritance, the disabled child is appointed as a non-exempt provisional heir (nicht befreiter Vorerbe), while other family members are designated as subsequent heirs (Nacherben).
• Prior and subsequent legacy solution (Vor- und Nachvermächtnis): The disabled child is appointed as a prior legatee (Vorvermächtnisnehmer) and other family members as subsequent legatees (Nachvermächtnisnehmer).

In both variants, it is decisive that the chosen inheritance or legacy arrangement is combined with the ordering of a permanent execution of the will (Dauertestamentsvollstreckung). This must be provided with certain administrative directives under Section 2216 (2) of the German Civil Code (BGB). To fully ensure the estate administration's capacity to act, the execution of the will should also extend to the subsequent-heir execution under Section 2222 BGB. Otherwise, the estate administration cannot override certain restrictions on the provisional heir, which considerably limits the administration.

This combination has a strong protective effect against access by the social welfare authority: The heir cannot themselves dispose of an estate item that is subject to the executor's administration. Creditors of the heir – and thus also the social welfare authority – have no access to these estate items subject to the execution of the will. In this way, the bequeathed estate is effectively protected from social welfare recourse.

Which aspects deserve particular attention when drafting the will?

In order to secure this protective effect legally, further important details must be observed in the will:

Avoiding residual compulsory-portion claims: The inheritance share or legacy of the disabled child must necessarily be larger than their compulsory-portion quota. If the disabled child received less, a residual compulsory-portion claim under Section 2305 BGB would arise, which could be transferred to the social welfare authority.

Protection against disclaimer: In the event of a restriction of the inheritance share (for example through prior and subsequent inheritance as well as execution of the will), the disabled child could in principle disclaim the inheritance under Section 2306 (1) BGB and instead demand the unencumbered compulsory portion. In the case of legal incapacity, this choice is made by the representative (guardian, custodian, curator), which could open a detour for the social welfare authority to effect a transfer. However, such a disclaimer requires the approval of the German family court or supervisory court (Sections 1643 (1), 1851 No. 1 BGB). The sole standard for this is the welfare of the child. If the inheritance share is larger than the compulsory-portion quota, a disclaimer is generally not justifiable.

Continued validity of the restrictions: The will must clarify that the restrictions of the execution of the will continue to apply even after the period of an estate settlement (Erbauseinandersetzung).

Precise administrative directives: It must be ordered as precisely as possible that the income and, where applicable, the substance of the estate are to be used exclusively to improve the quality of life of the disabled child. Only this careful directive ensures that the provisional heir has no direct claim to the payout of the income and that the social welfare authority consequently cannot access it.

What are the advantages and disadvantages of the prior and subsequent legacy solution?

For the ordering of a prior and subsequent legacy solution, what has been said above applies accordingly. However, this variant has certain disadvantages in practice, which is why the prior and subsequent inheritance solution is generally regarded as preferable and more legally secure.

Advantages of the legacy solution:

• Greater flexibility in the substantive structuring of the legacy.
• Avoidance of the creation of a community of heirs (Erbengemeinschaft).
• Avoidance of certain restrictions on disposal.
• Potential advantages for entrepreneurs with regard to clauses in the articles of association.

Disadvantages of the legacy solution: There are legal uncertainties as to the extent to which the protection against social welfare recourse is actually as strong here as with the inheritance solution.

Legal tips

Due to the strict case law and the fine distinctions in every family situation, there is a high individual need for advice and structuring when drawing up the will. A disabled person's will should never be created on the basis of a standard template from the internet, but should always be tailored precisely to the individual case with professional help.

We support you in structuring your will: The law firm SOLVING LEGAL advises you competently and empathetically on all questions relating to German inheritance law. We analyze your individual family situation, take the necessary time, and work out tailored, legally secure solutions with you – particularly also in the structuring of a disabled person's will. Attorney Moritz Riehl will be happy to advise you expertly on your individual options for structuring under inheritance law.