GERMANY Law and Practice Contributed by: Christian von Oertzen and Philipp Windeknecht, Flick Gocke Schaumburg
reviewed and, where necessary, amended to ensure the function of the company in the event of incapacity of major shareholders or managing directors. 8.4 Elder Law To avoid court-supervised care of a parent in the case of mental incapacity or something similar, it is com - mon to produce a lasting power of attorney. However, such a power of attorney can only be established if the principal is still fully capable of acting in their own right. In this context, problems may arise, particularly in the event of dementia. The power of attorney may be revoked at any time. A living will is usually drawn up together with a power of attorney. 9. Planning for Non-Traditional Families 9.1 Children In German tax and civil law, children born out of wed - lock and adopted children are treated in the same way as children born in a marriage. 9.2 Same-Sex Marriage Same-sex marriages have been recognised in Ger - many since 1 October 2017; previously, it was pos - sible to enter into a so-called registered partnership. It is possible to have a partnership that was regis - tered before this date retroactively converted into a marriage. In addition, German registered partners are treated equally to other spouses regarding taxation. 9.3 Cohabitation and Unmarried Couples Under German law, the mere cohabitation of a roman - tic couple does not give rise to any particular legal or tax consequences or rights. In particular, it does not establish any matrimonial property law or inheritance law position, such as entitlement to a compulsory share of an estate. Nor does it confer any tax privileg - es. A partial alignment with the rights and obligations of spouses was historically provided for registered civil partnerships under the German Civil Partner - ship Act (LPartG), which was available to same-sex
couples. Section 5 LPartG regulated certain mutual rights and obligations between partners, while Sec - tion 10 LPartG set out the legal consequences upon death. However, the introduction of same-sex mar - riage significantly reduced the practical relevance of the LPartG. Today, it continues to apply only to civil partnerships entered into before 1 October 2017 that have not been converted into a marriage, as well as to certain civil partnerships established abroad to which German law applies. Where a civil partnership has been converted into a marriage, the legal provi - sions governing marriage become applicable. If no such conversion has taken place, the provisions of the LPartG continue to apply to the respective part - nership. Due to the high reliefs under the German income, inheritance and gift tax regime, structuring non-profit organisations can be a good way to combine private clients’ charitable interests with favourable tax plan - ning. Tax Reliefs In general, tax reliefs are available for organisations that have tax-privileged purposes – that is, purposes that are in the public interest (defined as advancing the material, spiritual or ethical well-being of society), benevolent or religious. Donations to tax-privileged organisations are generally tax-deductible (up to 20% of income, plus up to EUR1 million for certain founda - tion endowments) and exempt from inheritance tax. The same rules apply to charities in EU and EEA mem - ber states, although gift tax may still apply unless an exemption is available. 10.2 Common Charitable Structures The way in which charitable organisations are struc - tured plays a significant role in German tax and estate planning. Charities can be set up in a variety of legal forms, including as foundations, corporations and associations. 10. Charitable Planning 10.1 Charitable Giving
225 CHAMBERS.COM
Powered by FlippingBook