(Bremen Higher Regional Court, order of 9 November 2016 – 4 UF 108 / 16 (Sections 1741(1), first sentence, and 1767(1) and (2) of the German Civil Code (BGB))
Sometimes, when you’re Estate planning to the point where a decision is made on a Adult adoption is being considered.
The heir, who is very close to the future testator and is therefore the preferred choice, is a rather distant relative or not related at all, meaning that naming them in a will would prove very costly in terms of inheritance tax. This would drain liquidity from the estate, which, in the worst-case scenario, may not even exist. Through adoption, a de facto family relationship can be transformed into a legal kinship. A side effect of adoption is a more favourable inheritance tax classification, with correspondingly lower tax rates and higher allowances available.
However, it is precisely this side effect relating to inheritance tax that means some people are tempted to pursue adult adoption purely for financial reasons. The courts endeavour to prevent cases of abuse and scrutinise the applicant’s motives closely.
A prerequisite for the adoption of an adult is that the adoption is morally justified. This is deemed to be the case if there is a Parent-child relationship has already been created, Section 1767(1), second half-sentence, of the German Civil Code (BGB). This refers to a long-term commitment to mutual support – including in times of need and illness – as well as an inner bond that is visible to the outside world through a social family bond. If this parent-child relationship has not yet developed, an objective assessment of the existing bond and its potential for development must indicate that the emergence of a parent-child relationship can be expected in the future.
With regard to moral justification, the Higher Regional Court of Bremen, in its decision of 9 November 2016 – 4 UF 108/16 concerning the adoption of an adult, held that „the moral justification for the adoption of an adult […] is the subject of a comprehensive assessment of the circumstances of the individual case“. „What matters here is the establishment of a genuine parent-child relationship which, in its entirety, resembles the family bond created by natural parentage. If, after weighing up all relevant circumstances, reasonable doubts remain as to the moral justification, the application for adoption must be rejected.“
The second official headnote of this decision goes on to state: „The establishment of such a parent-child relationship is generally not an option where the person to be adopted has an undisturbed, intact relationship with at least one biological parent, unless that parent is the adoptive parent’s partner, and there is no age difference between the adopter and the child to be adopted that corresponds to the natural generational sequence (in this case: 61 years).“
Applications for adoption will therefore continue to be scrutinised very carefully in order to rule out motives unrelated to family ties and purely financial considerations.
Adult adoption has implications not only in the areas of inheritance law (and inheritance tax), but also in the areas of maintenance law and the law governing surnames. Both the adoptive parent and the person to be adopted should therefore seek information on the wider implications of adult adoption and should not proceed with such a plan without seeking legal advice.