Administration of an estate

Estate Administration - Estate administration is a measure ordered by the probate court to secure and manage an estate when the heirs are unknown, cannot be located, or have not yet been identified (Section 1960 of the German Civil Code (BGB)). The estate administrator appointed by the court acts as the legal representative of the unknown heirs and manages the estate in a fiduciary capacity until the succession is clarified.

Requirements, Order, and Duties of the Estate Administrator

The probate court orders estate administration ex officio or upon application if there is a need to secure the estate and the heirs are unknown or unreachable. Typical scenarios include: The decedent has no known relatives, existing heirs have renounced the inheritance, potential heirs live abroad and cannot be reached, or the search for heirs is ongoing because the family relationships are unclear. Creditors of the estate-such as banks or landlords-can also apply for the appointment if they wish to assert claims against the estate but have no point of contact.

The estate administrator is appointed by the probate court and is assigned a precisely defined scope of duties. Their core responsibilities include securing the estate (locking the residence, storing valuables, terminating ongoing contracts), administering the estate’s assets (paying outstanding liabilities, managing accounts and real estate), and identifying heirs in collaboration with specialized heir locators or genealogists. The estate administrator is subject to the supervision of the probate court and must regularly report on their activities.

For certain legal transactions, the estate administrator requires court approval-in particular for the sale of real estate, taking out loans, or waiving rights. The estate administrator’s compensation is governed by the Guardianship and Custodianship Compensation Act (VBVG) and is paid from the estate. In the case of wealthy estates, the costs can be substantial.

The estate administration ends when the heirs have been identified and determined-usually through the issuance of a certificate of inheritance-or when the entire estate has been liquidated and transferred to the entitled persons or the tax authorities.

Special Importance of Real Estate in the Estate

If real estate is included in the estate, estate administration is particularly important. The estate administrator must fulfill the duty to ensure public safety for the property and the building-that is, ensure that the property poses no hazards, such as falling roof tiles, unpaved paths in winter, or dilapidated structural elements. Ongoing costs such as property taxes, insurance premiums, and utility bills must be paid from the estate. In the case of rented properties, the estate administrator acts as the landlord vis-à-vis the tenants and continues existing tenancies.

If the property is to be sold-for example, because the ongoing costs are depleting the estate or the process of identifying heirs is expected to take a long time-the estate administrator must obtain court approval and carry out the sale at a reasonable price. A sale below market value may result in liability for the estate administrator.

Practical Tip for Nuremberg and the Metropolitan Region

In the Nuremberg metropolitan region, we see estate administration cases particularly frequently involving single decedents without close relatives, as well as cases where all legal heirs have renounced the inheritance-for example, because the estate is heavily in debt or the property appears to be in need of renovation. The competent probate court is the Nuremberg Local Court (for the city area) or the respective local court of the testator’s last place of residence. We recommend that neighbors and property management companies who notice that a property has been abandoned and is not being managed following a death inform the probate court so that an estate administrator can be appointed in a timely manner. This helps prevent neglect, loss of value, and liability risks.

Frequently Asked Questions

Who can become an estate administrator?

In principle, any person with legal capacity can be appointed as an estate administrator. In practice, courts predominantly appoint attorneys, tax advisors, or professional guardians specializing in estate administration who possess the necessary experience in asset management. When real estate is part of the estate, it is advantageous for the estate administrator to have experience in real estate management, as the administration and, if necessary, sale of a property requires specialized knowledge.

How long does estate administration last?

The duration depends largely on the complexity of identifying the heirs. In simple cases-such as when an heir merely lives abroad and needs to be contacted-estate administration can be completed within a few months. In cases involving extensive genealogical research-such as when the decedent had no contact with relatives for decades-the search for heirs can take several years. During this time, the estate administrator manages the property.

As a neighbor or creditor, can I apply for estate administration?

Yes. In addition to the probate court, which may act ex officio, individuals who have a legitimate interest in safeguarding the estate are also entitled to file an application. This includes estate creditors (such as banks with outstanding claims), the decedent’s landlords, and neighbors affected by the neglected property. The application is filed informally with the competent probate court.

How does the sale of a property by the estate administrator proceed?

If a property is to be sold as part of estate administration, the process is multi-stage and subject to strict judicial oversight. The estate administrator first obtains a market value appraisal from a publicly appointed and sworn expert to determine the market value. He then markets the property-usually publicly or through a real estate agent-and negotiates with prospective buyers. Before signing the notarized purchase agreement, he must obtain approval from the probate court. The court reviews whether the purchase price is at least equal to the market value and whether the transaction serves the interests of the as-yet-unknown heirs. A sale below market value without court approval renders the contract invalid and may result in personal liability for the estate administrator. In Nuremberg, experience shows that the Nuremberg Local Court (Probate Court, Fürther Straße branch) processes such approval proceedings within four to eight weeks, provided all documents are complete.

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