Is the appointment of an administrator mandatory or mandatory upon request?
Under German law of succession, the administration of the estate on behalf of creditors can be used to prevent debts being enforced against the heir's own assets.
The Probate Court (Nachlassgericht) may order that the estate be placed into administration at the request of an authorised person (heir, executor, creditor of the estate, purchaser of the total inheritance or subsequent heir).
The administrator (Nachlassverwalter) is an officially appointed body. Although responsible for administering the assets of somebody else, it still has the status of a party in its own right in the event of a legal dispute. The adminstrator carries out its official duties in a private capacity when administering the other person's assets in the interests of all the parties involved (heirs and creditors). The estate administration process that the administrator is entitled — and indeed — required to perform is not merely aimed at maintaining and increasing the estate, but primarily at satisfying the creditors of the estate. The main duty of the administrator is to ensure that liabilities of the estate are cleared.
Who is entitled to execute the disposition upon death of the deceased and/or to administrate the estate?
Aside from the actual heirs, the (insolvency) administrator (see above) and the executor (see below), relevant powers can also be granted to a curator of the estate (Nachlasspfleger).
The Probate Court officially orders curatorship of the estate if there is a current need when the identity of the responsible heir is uncertain or if it is not known whether he or she has accepted the inheritance. Curatorship of the estate is aimed at safeguarding and maintaining the estate in the interests of the unknown heir.
The Probate Court sets the curator's scope of responsibilities in accordance with what is required in each individual case. This scope may be quite broad or may simply focus on the administration of individual items of the estate. The curator of the estate is usually given responsibility for identifying the unknown heirs and for safeguarding and maintaining the estate.
In principle, the curatorship of an estate does not aim to satisfy creditors of the estate because it is primarily instigated to protect the heirs. Exceptionally, the duties of the curator may also include using the resources of the estate to settle liabilities of the estate if this is necessary for its proper administration and maintenance or for the purpose of averting loss or damage, particularly any costs that could be incurred as a result of unnecessary legal disputes.
What powers does an administrator - executor (Testamentsvollstrecker) have?
A testator is permitted to designate one or more executors in his or her dispositions mortis causa.
He or she can also authorize a third party, the executor or the Probate Court to designate an(other) executor.
The obligations of the executor commence as soon as the designated person accepts their appointment.
Under the law, it is the duty of the executor to execute the testamentary dispositions of the testator.
If there is more than one heir, the executor is responsible for partitioning the estate between them.
The executor - and not the heirs - is required to administer the estate. In particular, he or she is entitled to take possession of the estate and dispose of the items of the estate.
In this case, the heirs have no power of disposition over any item of the estate that is subject to administration by the executor.
The executor is also entitled to take on liabilities in the name of the estate provided that this is necessary for its proper administration.
He or she is only entitled to dispose of items free of charge if there is a moral obligation to do so or out of respect for common decency.
However, the testator is able to restrict the powers of the executor as he or she sees fit compared to what has been laid down by the legal provisions.
He or she also has the authority to define the period for executing the will. He or she might, for example, merely go so far as to allow the executor to handle the estate and partition it in the short term.
On the other hand, he or she might equally decide to provide instructions in his or her will or contract of inheritance to make the estate subject to long-term execution.
In principle, long-term execution can be mandated for a maximum of 30 years, starting from the actual date of inheritance.
Nevertheless, the testator can provide instructions for the administration to continue until the death of the heir or the executor, or until the occurrence of a specified event affecting one or other of them. In such cases, the execution of the will can actually take longer than 30 years.
Dr. Wolfgang Buerstedde is certified executor (zertifizierter Testamentsvollstrecker).