German Federal Court Empowers Heirs to Contest Lifetime Gifts

The German Federal Court (BGH) ruled on 8 July 2026 that heirs bound by an inheritance contract may contest gifts made by the testator if those gifts diminish the heir’s later inheritance. The decision emphasizes the binding effect of the contract and requires that the testator actually exercised any withdrawal right, not merely that such a right existed on paper. Courts will therefore scrutinize the documentation of intent and actual actions when assessing challenges to lifetime transfers.

Separately, the Green Bundestag faction defended the existing inheritance and gift tax, arguing it curtails wealth concentration and upholds inter‑state fiscal solidarity. The faction warned that proposals to weaken the tax, such as those from Bavaria, could spark a tax‑competition race among German states, disadvantaging poorer Länder that rely on these revenues.

Both developments highlight heightened scrutiny of inheritance arrangements and reinforce Germany’s policy framework aimed at preventing the unchecked accumulation of family wealth.