Settlement payment for the settlement of the inheritance dispute as a liability of the estate

The payment of a settlement to resolve the legal dispute over the status of the inheritance may be deductible as a liability of the estate.

A settlement payment made by the heir to end a legal dispute due to clarification of the status of the heir is deductible as a liability of the estate. In the case that the Federal Fiscal Court had to rule on, the testator had initially designated a married couple as her heirs. Shortly before her death, she then decreed in writing that her financial advisor should be the sole heir, which led to a legal dispute about the status of the inheritance. The compensation paid to the financial advisor for waiving his inheritance claim must now be taken into account by the tax office as an estate liability.