Assets and succession
Foundation advice
A foundation gives assets a life of their own. It separates them from a person and ties them to a purpose: permanently, independent of succession, divorce or the founder’s insolvency. That makes it one of the most effective instruments for securing assets under German law. And one of the most demanding.
The information on this page is general and reflects the position at the time of publication. It does not take the circumstances of an individual case into account and does not replace advice. The legal structuring of a foundation is handled by cooperating lawyers and notaries; we accompany it on the tax side.
When a foundation makes sense
Not all assets belong in a foundation. It typically makes sense when one of these motives is in the foreground:
Family foundation or charitable foundation
Family foundation
Serves mainly private interests
- Purpose
- It serves mainly private interests: providing for family members and preserving the assets.
- Income tax
- It is not tax-exempt; its income remains taxable.
- Use of funds
- In return it offers the greatest possible freedom in deciding who receives what, and when.
- Special tax treatment
- It is additionally subject to the substitute inheritance tax (Erbersatzsteuer), which replicates the change of generation at fixed intervals.
Charitable foundation
Pursues tax-privileged purposes
- Purpose
- It pursues tax-privileged purposes within the meaning of the German Fiscal Code (Abgabenordnung), not the founder’s private interests.
- Income tax
- In return it is largely exempt from income taxation.
- Use of funds
- The price for that is restriction: funds may be used only for the purpose set out in the statutes, and the requirements of the Fiscal Code apply permanently.
- Special tax treatment
- Contributions to the foundation are deductible for the founder to a considerable extent.
Hybrid forms are possible. In practice much can be combined, for instance a charitable foundation with limited provision for relatives. Which structure is suitable depends on the assets, the family situation and the objectives.
How a foundation is set up
- 01
Clarifying the aim
What should the foundation achieve, who should benefit, what assets are there? The starting point is not a tax question but an entrepreneurial and family one.
- 02
Concept
Legal form, purpose, group of beneficiaries and endowment are determined. In parallel we calculate the tax consequences the transfer triggers and whether reliefs apply.
- 03
Statutes and recognition
We accompany the statutes on the tax side and agree them with the foundation supervisory authority and the tax office. For charitable foundations, compliance of the statutes is established separately in advance.
- 04
Transfer of assets
The foundation’s assets are transferred. With company shares and real estate this is the step most sensitive in tax terms.
Ongoing support
Bookkeeping, annual accounts, tax returns, the statement on the use of funds and the evidence provided to the tax office and the supervisory authority. A foundation is not a one-off formation but a permanent task.
Certification
Kyrill Seitz has been a certified foundation adviser since 2025, certified by Friedrich Schiller University Jena. This is not a specialist designation of the Chamber of Tax Advisers. The certification requires separate training in foundation law, foundation tax law and the law on charitable status, and complements his work as a tax adviser.
Let us talk about your situation
Whether a foundation is the right answer only becomes clear from the actual assets. The initial meeting serves to take stock and involves no obligation; tax advice on your individual case is charged in accordance with the German tax adviser fee schedule (StBVV).