The Federal Court of Justice Confirms That the Statute of Limitations for the Statutory Share Begins Immediately Upon the Transfer of Real Estate in Exchange for a Life Annuity
If descendants or a spouse are disinherited by will, they are entitled to a statutory share. Since this entitlement is limited to the assets that actually form part of the estate at the time of death, attempts are often made to reduce the estate through gifts made during the testator’s lifetime.
To prevent the statutory share from being eroded, Section 2325 of the German Civil Code (BGB) grants the beneficiary of the statutory share a so-called “supplementary claim to the statutory share.” Accordingly, the beneficiary is entitled to a minimum share of the value of the decedent’s gifts equal to their statutory share. As a rule, only gifts made within ten years prior to death are taken into account. Under Section 2325(3), a “phasing-out model” applies, such that the value to be considered is reduced by 10% for each year that has elapsed. After ten years have elapsed, the gift is completely disregarded in the calculation of the statutory share. This 10-year period generally begins to run upon the “transfer of the gifted item” to the donee.
However, according to the established case law of the Federal Court of Justice (BGH), the period begins only when the donor has definitively relinquished the “enjoyment” of the gifted property and no longer reserves any right of use. In the case of a gift subject to a right of usufruct, the donor has not “economically relinquished” the real property, so the 10-year period does not begin to run. The same applies to the reservation of a far-reaching right of residence.
The Federal Court of Justice (BGH) recently addressed the question of when the 10-year period begins to run in the case of a gift if, instead of a right of use, the donor secures a monthly life annuity that is secured by a real encumbrance in the land register. In a ruling dated June 24, 2026 (Case No. IV ZR 141/25), the BGH clarified that, in the case of a transfer of real property in exchange for payment of a monthly life annuity, the 10-year period for claims to a supplementary compulsory share begins immediately.
The judges justified this deviation from the reservation regarding extensive rights of use on the grounds that the life annuity is a pure claim for payment and that the donor had completely relinquished the power of control over the property associated with her ownership. Even the fact that the calculation of the life annuity is based on rental income does not mean that the donor receives the rent herself. Rather, she would continue to receive the life annuity even if the property were no longer rented out.
Nor does the security provided by a real encumbrance alter this, as it serves only as financial security and does not confer any right of use over the property.
This decision provides valuable legal certainty for forward-looking estate planning. A transfer of real estate in exchange for payment of a life annuity now makes it possible to reduce future statutory share claims in a legally secure and continuous manner, while one’s own retirement income remains secured through ongoing monthly payments.
The above summary of the Federal Court of Justice’s decision is intended to provide an initial overview of the topic of reducing claims to a supplementary statutory share through gifts. Every real estate transfer should be tailored individually to the family’s and financial situation and should also take tax implications into account.
If you have specific questions regarding anticipated succession, we are always available for an initial consultation. The cost of such a consultation is a maximum of 190.00 EUR plus VAT. The duration of the consultation and the size of your assets are irrelevant in this regard.
Helen Brache
Attorney
at Law, Certified Consultant for Business Succession (DStV e.V.)