GERMANY Law and Practice Contributed by: Christian von Oertzen and Philipp Windeknecht, Flick Gocke Schaumburg
5. Wealth Disputes 5.1 Trends Driving Disputes
7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship In general, German citizenship can be awarded auto - matically by law or upon the request of an individual by administrative act. By law, German citizenship will be passed to children by way of kinship if one of the parents of the child is a German citizen. Another way of obtaining German citizenship is by way of adoption by at least one Ger - man citizen. With certain prerequisites, citizenship can be acquired by administrative act if a person has immigrated law - fully to Germany and has had their habitual abode in Germany for longer than eight years. The same applies if an individual is willing to abandon their former citi - zenship and has a spouse or a registered partner with German citizenship. Alternatively, citizenship can be acquired if the individual has custody of a child who has German citizenship. Former German nationals who were deprived of their citizenship by arbitrary expatriations by the Nazi regime on political, racial and religious grounds between 1933 and 1945, and their descendants, may apply for naturalisation (without further requirements). Tax Residency German tax residency may be obtained by maintain - ing a dwelling in Germany or by staying in Germany, when the stay is not merely temporary (generally, a stay of six months without interruptions suffices). 7.2 Expeditious Citizenship Citizens of the EU will be treated favourably in obtain - ing German citizenship as a result of the unity principle promoted by the EU. On the one hand, they will not need to acquire a resi - dence permit, but will be able to acquire this auto - matically if an application is filed with the responsible authorities. On the other hand, citizens of the EU are not required to drop their previous citizenship when obtaining German citizenship, thus gaining dual citi -
Probate arbitration and mediation are considered as an alternative to probate litigation in solving wealth disputes. An effective way to avoid long and costly probate disputes is to establish an arbitration clause in a last will. This clause is usually combined with a no-contest clause. 5.2 Mechanism for Compensation There is no special mechanism for compensation in wealth disputes. 6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries The use of corporate fiduciaries is not prevalent in German law. 6.2 Fiduciary Liabilities Piercing the veil of a trust or foundation is unusual. Nevertheless, if a trust or foundation is regarded as a mere fiduciary agreement, the veil can be pierced and income as well as capital of the trust will be attributed to the settlor or – in rarer cases – to the beneficiaries. 6.3 Fiduciary Regulation The prudent investor rule is applicable to a fiduciary and also to an investment adviser. 6.4 Fiduciary Investment There are very few investment theories or standards in this field in Germany. The Tax Court Munich (decision of 25 April 2016 – 7 K 1252/14) held that non-profit corporations are largely free to choose their invest - ments. They may choose any form of investment that is economically reasonable, applying an ex ante per - spective.
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