Judgment of the Regional Court of Koblenz on March 14, 2024 – Case No.: 3 O 457/23
The gifting of savings books can be effective even without an assignment declaration. This was decided by the Regional Court of Koblenz in a judgment on March 14, 2024 (Case No.: 3 O 457/23).
Lifetime gifts are an interesting option to optimally utilize tax exemptions during wealth transfer. To avoid interpretive ambiguities, a gift should be as clearly identifiable as such, according to the law firm MTR Legal Rechtsanwälte, which advises, among other things, on inheritance law.
This is also evident in the underlying case before the Regional Court of Koblenz, even though it was presumably less about the optimal utilization of inheritance or gift tax allowances. Specifically, the defendant woman was in possession of two savings books belonging to her deceased brother. The savings books had a balance of around 92,000 euros. In his will, the deceased had stipulated that his wife should inherit half and his sister a quarter. The rest went to more distant relatives.
Executor Demands Return of Savings Books
However, there was neither a notarized gift certificate nor an assignment declaration for the savings books. The executor therefore demanded the return of the savings books from the sister of the deceased. Due to the lack of an assignment declaration, the savings books should be attributed to the estate. A gift could not be considered because the sister had not paid gift tax, argued the executor.
The defendant sister, on the other hand, claimed that her brother had given her the savings books and transferred them to her through assignment. Her brother had told her that she could dispose of the balance. It was a gift.
Regional Court of Koblenz Dismisses the Lawsuit
The Regional Court of Koblenz sided with the sister and dismissed the lawsuit. The court reasoned that the effectiveness of a gift of movable property generally does not depend on a notarized contract. Instead, the gift of movable property is completed directly by delivery.
However, in the case of a savings book, the delivery alone is not sufficient to complete the gift, the court restricted. This is because the savings book certifies a claim against the bank. This claim against the bank does not transfer to another person just because the ownership of the document, in this case, the savings books, is transferred to that person. To transfer the balance to another person, one must agree with them on the assignment of the claim against the bank. Therefore, in the case of a savings book, the gift is generally completed by an assignment agreement between the donor and the donee, according to the Regional Court of Koblenz.
Assignment Declaration Can Also Be Implied
However, such an assignment declaration can be made explicitly or implicitly, the court further clarified. If a savings book is handed over to another person with the intention of “you can keep this,” it is usually associated with the notion that everything is settled and the balance has effectively transferred to the donee. Therefore, in certain cases, the case law assumes that the assignment agreement was made implicitly, so the gift is already effective upon the delivery of the savings book, the Regional Court of Koblenz further elaborated.
However, the circumstances of each individual case must always be considered, even though the delivery of the savings book is generally a significant indication of the assignment of the claim, the court noted.
Gift Effectively Made
In the underlying case, the defendant claimed that her brother had handed over the savings books to her with the express declaration that she could freely dispose of the money. The siblings had always maintained a close relationship, and the deceased had wanted to secure his sister financially for old age with the gift of the savings books, the Regional Court of Koblenz explained. It also favored the defendant that she could not have come into possession of the savings books other than through a deliberate transfer from her brother. To the court’s satisfaction, the defendant had received the savings books from her brother with the corresponding intention to transfer.
Even though no assignment agreement was filed with the bank in favor of the sister, this did not prevent an effective gift, the Regional Court of Koblenz decided. The lack of notification of the gift to the tax office could have many reasons; presumably, the sister was unaware of the notification obligation. She must bear the tax consequences, but this does not change the effectiveness of the gift, the court further ruled.
MTR Legal Rechtsanwälte will advise you on questions regarding gifts and other inheritance law issues. Feel free to contact us!
