Heinz Herrmann Thiele worked his way up in one of the world’s most important industrial companies for commercial vehicle technology and took over this in practice. Under his leadership, Knorr-Bremse AG developed into a global player with great success. Mr. Thiele also had a financial share in this, so that he was a billionaire at the end of his life. So he had thought about his succession and decided to set up a family foundation. This project was already in the process of being implemented, as he suffered a relatively early death. This resulted in several hurdles until his last will could be fulfilled. We trace this path and investigate why the record inheritance of Mr. Thiele, unlike what he planned, became taxable.

1. Heinz-Herrmann Thiele Record Heritage – Introduction

One of the richest people in Germany died in 2021 and left behind a record legacy: Heinz Herrmann Thiele. Although he had planned his property succession ahead of time, so that if possible no tax is incurred, the heirs ultimately had to pay about EUR 3.65 billion in inheritance tax. How did this happen? Was Heinz Herrmann Thiele wrongly advised? Let us dive into this exciting story. Perhaps we gain insights from this that are interesting for one reader or the other reader.

2. Who was Heinz-Herrmann Thiele?

Before we turn to the inheritance case, let us briefly consider who Heinz Herrmann Thiele was. Heinz Herrmann Thiele was born in Mainz in 1941. In 1969 he joined the then medium-sized company Knorr-Bremse. This company had established itself as a supplier for commercial vehicle technology, thus producing brakes, clutches and other things that were installed at that time, especially in rail transport. Thiele worked as a lawyer in the patent department. After ten years, he became Sales Manager. Already in 1985 a change to the Executive Board of the company still operating as a GmbH followed. A dispute among the then shareholders proved to be an extraordinary stroke of luck for him. One year later, Thiele acquires 71% of the shares from one of the shareholders.

Under his leadership, the company, which has since been converted into Knorr-Bremse AG, is expanding strongly. It acquires several foreign companies, including in the US, and becomes a global player. Between 1987 and 2005, turnover increased ninefold from approximately EUR 300 million to EUR 2.7 billion. In 2017, it was even EUR 6.2 billion. Heinz Herrmann Thiele had already exchanged the position of CEO for that of Honorary Chairman of the Supervisory Board. At that time, an IPO was organized, with Heinz Herrmann Thiele placing parts of his private stock package on the market. This point is still important for us later, because the proceeds from the sale of his shares flowed to him privately. In any case, he was able to achieve an amount of EUR 4.2 billion.

Whether Heinz Herrmann Thiele had much pleasure in his considerable increase in his liquid assets is unknown to us. However, he hardly had much opportunity to do so. He died unexpectedly on February 23, 2021.

3. How Thiele had prepared the transfer of his record inheritance

As befits a wealthy person, Thiele had dealt intensively with the question of his succession. It is therefore hardly surprising that he had made concrete preparations for this even before his death. His long-time tax consultant Robin Brühmüller was to watch over the execution of his last will as executor of the will. Indeed, Thiele intended that disputes between the heirs should be avoided in the succession of assets. In 2017, there were first problems.

At that time Thiele disagreed with his son Henrik apparently so violently that the latter pronounced a renunciation of the compulsory part. The son would have granted 12.5% of the inheritance. Instead, he received an almost tiny amount of only EUR 25 million as compensation. Irony of fate: this was also probably about the orientation of the group, because son Henrik also worked in a management position at this industrial company at the time.

So his wife Nadia Thiele and his daughter Julia Thiele-Schürhoff remained as candidates from his closest family circle for the inheritance. Therefore, Heinz Herrmann Thiele decided to set up a family foundation. He had already taken the first steps before his death. In addition, he used his wife as a preliminary heir for relatively small parts of his assets. The majority should be received by the family foundation. In it, his daughter Julia was reserved a position on the board.

4. How the Thiele Record Heritage Actually Happened

4.1. Thiele Record Heritage: Son Erik and his compulsory part waiver

Thiele's unexpectedly early end of life came at the wrong time. Although the establishment of the family foundation had already started, the supervisory authority had not yet issued a final confirmation.

Now Henrik Thiele filed objections to his earlier decision regarding his former renunciation of compulsory parts. This resulted in a court case which, of course, took time. In the end, he was denied his desire. The Court of First Instance did not see any basis for annulling the waiver of the compulsory part.

4.2. Thiele Record Heritage: Widow Nadia Has Legal Concerns

In addition to this delay, another, much more serious, which also had legal reasons. Because his wife Nadia was dissatisfied with several consequences of the inheritance, as she had planned her husband. On the one hand, Nadia Thiele also claimed a position in the family foundation. She probably did not want to become dependent on daughter Julia. At least one seat on the foundation board was still open at that time. This would have allowed Nadia Thiele to exercise a certain say in the foundation. This procedure also delayed the establishment of the foundation, because the supervisory authority could only carry out the recognition after these legal matters were clarified.

The biggest obstacle, however, was the legal dispute with executor Robin Brühmüller. He had charged a fee of about EUR 225 million for this activity, which Nadia Thiele thought was excessive. She argued that her late husband never accepted such a large amount because it was very frugal by nature. So she suspected fraud. But the fee corresponded to the customary practices to which the executor referred.

In addition, Nadia Thiele seems to have displeased that in addition to the daughter, he should also have a seat on the board of the foundation. She sued Robin Brühmüller, but this did not succeed. Mrs Thiele was not at all impressed by this. So she started several attempts to enforce her views, including the initiation of criminal investigations. But even this one was not successful. Finally, the widow agreed with the executor. Only then could the supervisory authority make the recognition of the family foundation.

4.3. Thiele’s record inheritance passes to the Family Foundation

It was already 2024. After all legal disputes were resolved, the supervisory authority was able to declare the recognition of the family foundation. However, this meant that a significant part of the inheritance still came from the sales proceeds from Heinz Herrmann Thiele’s sale of shares. Without this liquid assets, a significant part of the inheritance would probably have consisted of company shares. This, in turn, could have been obtained tax-free by the foundation by submitting an application for a relief needs test. But the money meant that there were assets available to pay the inheritance tax. This led to a taxation of the record inheritance of Heinz Herrmann Thiele. In total, approximately EUR 3.65 billion were transferred.

5. The record legacy of Heinz Herrmann Thiele – Conclusion

Heinz Herrmann Thiele actually wanted to transfer his fortune quietly and secretly, especially without media echo and thus hidden from the public. But his arrangements were apparently too late. In addition, he supposedly wanted to rule out that his legacy would lead to division among his family members. Apparently, he had already recognized the potential during his lifetime, so that he also made preparations for this. Instead, the record inheritance of Thiele has been handed over to the media interest of the general public and escalated to the bone of contention of his bereaved.

What can we learn from this? The first idea here should probably be that you should think about the asset succession as early as possible if you are wealthy. Because just as Mr. Thiele ended surprisingly early, so can anyone and everyone. Actually, he had done everything right, at least with regard to the succession regulation. However, he had not yet had the opportunity to convert the liquid assets stemming from the sale of the shares into other assets that do not constitute harmful assets within the meaning of § 28a ErbStG. If he had succeeded before his death, Thiele’s billion-dollar record legacy would have gone quietly and without taxes.

We could now speculate whether he was aware of this fact. If so, the realization that his plan remained unfinished may have been a shock he had to experience in his final minutes.