Key Facts at a Glance
EarlyPlanning should begin 5–10 years before the transfer—not just in an emergency.
3
Paths: Family succession, sale, or lifetime gifting
10Years
Lifetime gifts remain relevant for statutory share claims (clawback)—note the "tapering" rules (special rules apply to gifts between spouses)
GmbH
The Articles of Association (Partnership Agreement) and the Will must be perfectly aligned
12 Years of expertise in commercial legal consultancy
Specialist Focus: Inheritance Law in Cologne
Transparent fee models
BASICS
Why is
Succession Planning
so complex?
Business succession is not a single legal transaction; it is a process that simultaneously touches upon inheritance law, corporate law, and family law—where every decision has knock-on effects.
If a business owner dies without a plan, their share in the company falls into the estate, often creating a community of heirs (Erbengemeinschaft) consisting of the spouse, children, and potentially other beneficiaries. A community of heirs is fundamentally ill-suited to act as a shareholder: decisions often require unanimity or specific majorities, making deadlocks inevitable.
Furthermore, many Articles of Association contain clauses that restrict or exclude the transfer of shares upon death. If the agreement states that shares are not inheritable, the heirs do not become shareholders—though they may be entitled to a cash buyout. Therefore, the Will and the Articles of Association must be designed to work in tandem.
The central conflict: The departing owner wants to preserve the company and empower their successor. At the same time, other family members have legal inheritance claims—statutory shares (Pflichtteil), accrued gains, or maintenance—which cannot be ignored without facing high costs later.
Effective succession planning determines not only who receives the business, but also how other family members are compensated—ensuring the company’s core substance is not jeopardised.
I advise departing entrepreneurs, potential successors, and family members seeking to assess their legal inheritance position.
WHAT I DO FOR YOU
My Services at a Glance
01
Testamentary Succession
I draft Wills or Inheritance Contracts tailored to business succession—utilising prior and subsequent heirship, partition inter vivos, legacies, and "business-protection" statutory share clauses.
Wills
02
Auditing Articles of Association
I review whether existing corporate agreements facilitate or block your desired succession—and identify necessary amendments to ensure the Will and the corporate structure are aligned.
Corporate Law
03
Structuring Lifetime Gifts
Transferring a company or its shares early can offer significant legal and tax advantages. I advise on secure structures, including usufruct (Nießbrauch), clawback rights, and offsetting against statutory shares.
Gifting
04
Managing Compulsory Share Claims
Not every family member can take over the business, but those excluded may have monetary claims. I advise on how these claims can be limited, deferred, or settled through other provisions.
Compulsory Share
05
Succession Without an Internal Successor
If an internal family solution is not viable, I provide legal guidance on your private provisions (Wills/Prenuptial agreements) while alternative paths like sales or liquidations are explored.
Sale/Liquidation
06
Assessing Your Legal Position
Are you a family member wondering about your entitlements? I assess your statutory share, potential equalisation claims, and whether a planned transfer prejudices your legal position.
Family Claims
STEP BY STEP
How to Structure Your Business Succession
01
Family Succession via a Wil
The business is bequeathed to one or more family members through a Will. Remaining family members are compensated via legacies or specific compulsory share clauses. This requires the Will and the Articles of Association (Company Constitution) to be strictly aligned.
02
Lifetime Transfer with Retained Rights
WHAT MATTERS MOST
These factors determine whether a succession succeeds or ends up in court years later.
The Decisive Levers
ARTICLES OF ASSOCIATION
Does the agreement contain succession provisions, redemption clauses, or prohibitions on assignment? If the Will and the Articles of Association are not in harmony, the succession will fail.
COMPULSORY
SHARE
Gifts made within the last 10 years are notionally added back to the estate. Specific rules apply to spouses. Transferring the business early reduces this risk—but does not eliminate it entirely.
In business succession, private estate planning, corporate law, and taxation are inextricably linked. I support you in drafting your inheritance and family law structures, working closely with your tax advisor or corporate law specialists. This ensures that your private financial security harmonises perfectly with your corporate structure.
VALUATION
The business value determines the compulsory share claims of any bypassed family members. A realistic valuation is the foundation of any fair succession arrangement.
TIMING
The earlier the planning begins, the greater the scope for structuring—from a tax, probate, and corporate law perspective. In an emergency, there is often little time left.
DEFERRAL
03
Management-Buy-out or External Successor
If the company is transferred to managing directors or external buyers, complex private issues arise. I advise you on the inheritance law implications for your family and the necessary adjustments to your private planning (Wills/Marital Agreements) to secure the sale proceeds and your private assets for the long term.
04
Holding-Structures in Succession
A holding company can facilitate the transfer of business shares while the operating business remains stable. I advise on securing these structures under inheritance law—for instance, through testamentary provisions or adjustments to matrimonial property regimes in a marriage contract. I coordinate this process closely with a tax advisor and a corporate lawyer.
05
Orderly Liquidation as an Alternative
If continuing or selling the business is not feasible, a lifetime liquidation may be sensible. I advise you on the inheritance law consequences and the protection of the resulting private wealth. Together, we will adapt your private estate planning (Will/Marital Agreement) to your new financial situation.
ABOUT ME
Commercial Thinking meets
Succession Law
My name is Dr Hanna Schmidt. I am a lawyer and founder of DR. SCHMIDT LEGAL in Cologne, specialising in Inheritance and Family Law.
After 12 years in leading commercial law firms, I bring a deep understanding of the requirements and the professional tone expected in entrepreneurial mandates. In corporate succession, I focus on the legal interface between the business and the family.
My focus lies in the precise drafting of prenuptial agreements, wills, and gifting agreements that secure the company’s continuity while preventing family conflict. I see myself as a specialist partner who synchronises your private provisions with your business goals—working in close coordination with tax advisors and corporate specialists.
Learn more:
12 Years of Firm Experience
My background in commercial law shapes my approach: I value structured, precise mandate management and clear, resilient solutions for complex cases.
§
Specialist Focus Inheritance Law
From Wills and statutory shares to gifting and inheritance contracts—I understand the interplay between inheritance and corporate law.
Cologne & Nationwide
Personal advice on-site or via video conference. I represent clients in courts across Germany.
Transparent Fees
Billing is based on an hourly rate agreed upon in advance. Should statutory fees (RVG) be higher in specific cases, these form the basis of the invoice.
OUR PROCESS
1
Initial Consultation
A brief telephone call or email exchange to determine if and how I can assist you—followed by an appointment for a formal consultation.
2
Analysis & Strategy
Articles of Association, family structure, inheritance position—I gain a comprehensive overview of your situation and develop a tailored succession strategy.
3
Drafting & Coordination
Whether it is a Will, a Gifting Agreement, or an Inheritance Contract—I prepare the drafts and coordinate them with all parties involved, including your tax advisor.
4
Implementation
Notarial certification, land registry filings, and commercial register entries—I oversee the full legal implementation of your succession plan.
How We Work together
FAQ
Answers to Your Questions
What happens to the company if I don’t have a Will?
Under statutory intestacy, the share falls into the estate—often creating a "community of heirs" (typically the spouse and children). Whether they can actually become shareholders depends on the Articles of Association. In the worst case, heirs may only have a claim to a cash buyout, potentially under unfavourable conditions.
What role do the Articles of Association play in succession?
A central one. Many Articles of Association (partnership agreements) contain clauses that restrict transfers upon death—such as redemption clauses or specific qualification requirements for successors. If a Will makes a provision that the Articles of Association exclude, the corporate agreement generally takes precedence. Both documents must be perfectly aligned.
What is "Usufruct" (Nießbrauch) in the context of succession?
Usufruct means that the departing entrepreneur continues to receive the company's income (e.g. profits or a director's salary) after the transfer, even though legal ownership has already passed to the successor. This secures the transferor’s livelihood while simultaneously reducing the taxable value of the gift.
Can I transfer the business to one child without disadvantaging the others?
Yes, but children who are passed over are entitled to a "compulsory share" (Pflichtteil) amounting to half of their legal intestate share. This claim is calculated based on the total value of the business. Through strategic planning—such as gifting with an offsetting clause, a waiver of statutory shares in exchange for a settlement, or deferment agreements—this risk can be managed effectively.
Is a lifetime gift better than an inheritance?
This depends on the individual case. A lifetime gift can offer tax advantages and reduce compulsory share claims in the long term; however, gifts made within the last 10 years are still "virtually" added back to the estate. In return, the departing entrepreneur retains control over the process and can incorporate maintenance rights.
What are the costs of the consultation?
I bill on an hourly rate basis—unless the statutory fees under the German Lawyers' Remuneration Act (RVG) are higher, in which case those apply. I will inform you of my hourly rate in advance, so you know exactly what to expect from the start.
Get in Touch
Please send an email to kontakt@drschmidt-legal.de. A response will follow shortly. Alternatively, contact by telephone is also possible.
Note on Fees: Services by DR. SCHMIDT LEGAL are generally provided based on hourly fee agreements which may exceed the statutory rates set by the German Attorney Remuneration Act (RVG), except where statutory fees are higher in a specific case (for further details, please refer to "Costs"). This allows for the intensive, high-quality representation of your interests.
Jakordenstraße 8, 50668 Cologne, Germany
+49 (0) 221 292 40 370
Office Hours
Mon – Thu
Fri
9 a.m. - 7 p.m.
9 a.m. - 5 p.m.
and by appointment
