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Estate insolvency: protecting heirs from debts

If an estate is over-indebted, heirs do not have to answer for the deceased's debts with their own assets. With the right steps, such as estate insolvency, liability can be limited to the estate.

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Your chances of getting your money back

Heirs initially also have liability with their own assets, but can limit liability to the estate. In cases of over-indebtedness, the opening of estate insolvency proceedings must be applied for (§ 1980 BGB); alongside this there is estate administration.
If liability is effectively limited, the heirs' own assets are protected from estate creditors. Anyone inheriting an over-indebted estate can also check whether disclaiming is the better route.

What you should do now

  1. 1

    1. Examine the estate

    Get an overview of the estate's assets and debts.

  2. 2

    2. Observe the deadline

    A disclaimer is only possible within six weeks; after that, limiting liability helps.

  3. 3

    3. Apply for insolvency/administration

    In cases of over-indebtedness, apply for estate insolvency or estate administration.

  4. 4

    4. Separate your own assets

    Avoid mixing the estate with your own assets.

How to spot the scam

  • You pay estate debts out of your own assets.
  • The limitation of liability is missed.
  • The estate and private assets are mixed.

Frequently asked questions

Am I liable as an heir for the deceased's debts?

Initially yes, in principle also with your own assets. But you can limit liability to the estate, for instance through estate insolvency (§ 1980 BGB) or estate administration. Then your own assets are protected.

When should I apply for estate insolvency?

When the estate is over-indebted, meaning the debts exceed the assets. The application protects your private assets and ensures an orderly distribution. Once you know of the over-indebtedness, the application should be filed promptly.

Isn't disclaiming simpler?

Often yes. If it is clear from the outset that the estate is over-indebted, disclaiming within six weeks can be the simpler route. If the deadline has passed or the situation is unclear, limiting liability through estate insolvency or estate administration protects you.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.