Estate planning in Denmark is surprisingly family-friendly compared to many other countries. There is no inheritance tax between spouses or direct descendants, gift tax is generous, and a well-structured will can protect your family’s financial future. This guide covers everything you need to know about Danish estate planning — from inheritance and gift tax to wills, property types, powers of attorney, and trusts.
Inheritance Tax (Arveafgift)
Denmark’s inheritance tax rules depend entirely on your relationship to the deceased. The system is straightforward but the rates differ significantly based on familial ties.
Spouse and Children
Spouses and direct descendants (children, grandchildren) pay 0% inheritance tax. There is no inheritance tax between spouses and no inheritance tax when parents pass assets to their children. This is one of the most generous inheritance tax regimes in Europe.
Siblings
Siblings pay 15% inheritance tax on inherited assets. This applies whether you are a full sibling or half-sibling.
Unrelated Persons
Unrelated persons — including friends, partners not in a registered partnership, and other non-relatives — pay 15% inheritance tax on the value of inherited assets above DKK 306,500 (2026 threshold). Amounts below this threshold are tax-free.
Summary Table
| Relationship | Tax Rate | Tax-Free Threshold |
|---|---|---|
| Spouse | 0% | Unlimited |
| Children/descendants | 0% | Unlimited |
| Siblings | 15% | None |
| Unrelated persons | 15% | DKK 306,500 |
The inheritance tax must generally be paid within three months of the death. The estate’s executor or administrator is responsible for filing the inheritance tax return (opgørelse af boet) with SKAT.
Gift Tax (Gaveafgift)
Gift tax in Denmark follows the same structure as inheritance tax. The rates and thresholds are identical.
Spouse and Children
Gifts between spouses and from parents to children are completely tax-free. There is no limit on how much you can gift to your spouse or children.
Siblings
Gifts to siblings are taxed at 15% on the value of the gift.
Unrelated Persons
Gifts to unrelated persons are taxed at 15% on the value above DKK 73,600 (2026 threshold). This means you can give someone up to DKK 73,600 per year without triggering gift tax.
Annual Gift Exemption
You can give each of your children up to DKK 73,600 per year tax-free (2026). This is a powerful estate planning tool. A married couple with two children can gift a combined DKK 294,400 per year to their children without any tax liability.
- To each child: DKK 73,600 per year
- Married couple with two children: DKK 294,400 per year combined
- Spouse: Unlimited tax-free gifts
Over 20 years, a married couple could potentially transfer over DKK 5.8 million to their children completely tax-free using this annual exemption alone.
Will (Testamente)
A will (testamente) lets you decide how your assets are distributed after your death. Without a will, the default rules of the Danish Inheritance Act (arveloven) apply.
What Happens Without a Will
If you die without a will, the rules of arveloven dictate the distribution:
- Surviving spouse receives half of the estate
- Children split the other half equally
- If there is no surviving spouse, children split the entire estate
- If there are no children, the estate passes to parents, then siblings, then the Danish state (via the crown)
This default distribution may not match your wishes. For example, if you want your surviving spouse to inherit everything, you need a will.
What a Will Can Do
- Direct who inherits your assets
- Set specific bequests (e.g., a particular property to a specific child)
- Name an executor (testamentsfuldmægtig) to manage the estate
- Create trusts or conditions for inheritance
- Override the default rules of arveloven
Writing a Will in Denmark
A will must be either:
- Handwritten and signed by the testator (holographic will)
- Notarised — signed in the presence of a notary or two witnesses
Notarised wills are strongly recommended. They are registered with the court system (Domstolsstyrelsen) and reduce the risk of disputes.
Costs
- Handwritten will: Free to create, but may be more vulnerable to challenges
- Notarised will: Typically DKK 1,000–3,000 depending on the notary
Where to Register
Wills can be registered with Domstolsstyrelsen through the Danish court system. Registration ensures the will is found and executed after your death.
Types of Property (Formueordninger)
Denmark recognises different property regimes that determine how assets are divided in a marriage. Understanding these is essential for estate planning, especially if you have children from a previous relationship.
Fælleseje (Joint Property)
Fælleseje is the default property regime in Danish marriages. All assets acquired during the marriage are considered joint property and are split 50/50 on divorce or death.
- Default rule — applies unless you have a prenuptial agreement
- Includes: salary, savings, pension, home, furniture, vehicles acquired during marriage
- Excludes: assets owned before marriage (unless mingled with joint assets)
- On death: the surviving spouse’s share of fælleseje passes to them, then to heirs
Særeje (Separate Property)
Særeje is a prenuptial agreement that protects specific assets from being divided. Assets covered by særeje remain with the original owner in the event of divorce or death.
- Protects assets from 50/50 division
- Common for: family businesses, inherited property, significant pre-marital wealth
- Must be created before or during marriage through a notarised agreement
- Can apply to all assets or specific assets
Brugsdelingsæreje (Usage Separation)
Brugsdelingsæreje is a hybrid arrangement where assets are jointly owned but usage rights are separated. This is less common but can be useful in specific situations.
- Joint ownership but separate usage rights
- Useful for: separating business use from personal use
- Complex and typically requires legal advice
Særeje and Estate Planning
Særeje is particularly important in second marriages where either spouse has children from a previous relationship. Without særeje, assets may be split under fælleseje rules, potentially leaving children from the first marriage with less than intended.
Powers of Attorney
Danish law provides for several types of powers of attorney that are relevant to estate planning.
Fremtidsfuldmagt (Lasting Power of Attorney)
Fremtidsfuldmagt lets you appoint someone to manage your finances and personal matters if you lose the capacity to make decisions yourself.
- Covers: financial decisions, personal care, medical decisions
- Must be registered with Domstolsstyrelsen to be valid
- Can be general (covering all decisions) or specific (limited to certain areas)
- Revocable — you can revoke the power of attorney at any time while you still have capacity
Why Fremtidsfuldmagt Matters
Without a fremtidsfuldmagt, your family may need to apply for a formal guardianship (værgemål) through the court system if you lose capacity. This process is:
- Time-consuming
- Potentially expensive
- May result in someone you wouldn’t choose being appointed
A registered fremtidsfuldmagt avoids this entirely and ensures the person you trust manages your affairs.
How to Set One Up
- Choose your representative — someone you trust completely
- Draft the power of attorney — can be done through a lawyer or using approved templates
- Have it notarised — signed in the presence of a notary
- Register with Domstolsstyrelsen — submit the document for registration
Life Insurance
Life insurance in Denmark serves a specific estate planning function. When you designate a beneficiary on a life insurance policy, the payout goes directly to that person — not to your estate.
Why This Matters
- Avoids estate administration — the payout is not part of your estate and does not go through the probate process
- Immediate access — the beneficiary receives the payout quickly, often within weeks
- No inheritance tax — life insurance payouts to designated beneficiaries are generally not subject to inheritance tax
- Protected from creditors — in some cases, life insurance payouts may be protected from the estate’s creditors
Common Uses
- Mortgage protection — ensures your family can pay off the mortgage if you die
- Income replacement — provides financial support for dependants
- Specific bequests — ensures a specific person receives a specific amount
Designating Beneficiaries
When you take out a life insurance policy, you name a beneficiary (beneficient). This can be:
- Your spouse
- Your children
- A trust
- Anyone you choose
You can change the beneficiary at any time by contacting your insurance provider.
Pension Beneficiary
Pension savings in Denmark are not part of your estate. Instead, they pass directly to the beneficiary you have designated with your pension provider.
How Pension Beneficiary Works
- Designated beneficiary — the person named on your pension account receives the savings
- Not part of estate — pension savings do not go through the probate process
- No inheritance tax — pension savings passed to a designated beneficiary are generally not subject to inheritance tax
- Different from estate rules — even if your will says something different, the pension beneficiary designation takes precedence
Why This Is Important
Many people forget to update their pension beneficiary after major life events. If your pension beneficiary still names an ex-spouse, that person will receive your pension savings — regardless of what your will says.
When to Update
Update your pension beneficiary when you:
- Get married or divorced
- Have children
- Experience a death of a beneficiary
- Change your relationship status
- Enter a registered partnership
How to Update
Contact your pension provider directly. Most providers allow you to update your beneficiary through their online portal or by phone.
Trust
A trust can be used in Danish estate planning to protect assets for your children, manage assets on their behalf, or provide for specific conditions.
Testamentarisk Trust
A testamentarisk trust (testamentary trust) is created through your will. It takes effect after your death and allows you to set conditions on how and when your children receive their inheritance.
- Protects assets — children cannot access the inheritance until they meet specified conditions
- Manages assets — a trustee manages the trust on behalf of the beneficiaries
- Sets conditions — e.g., assets released at age 25, or when the child completes education
- Useful for: minors, children who may not be financially responsible, protecting assets from creditors
How to Set Up a Trust in Denmark
- Include trust provisions in your will — specify the terms, trustee, and beneficiaries
- Appoint a trustee — someone you trust to manage the assets
- Register the trust — depending on the type of trust, registration may be required
- Seek legal advice — trusts in Denmark are complex and require professional guidance
Considerations
- Trusts in Denmark are less common than in common law countries like the UK or US
- Danish tax treatment of trusts can be complex
- Legal advice is essential to ensure the trust is structured correctly
- The trust must comply with Danish inheritance law
Worked Example: Married Couple with Two Children
To illustrate how Danish estate planning works in practice, consider this scenario.
The Setup
- Hans and Marie are married (fælleseje)
- Two children: Emma (25) and Lars (22)
- Total estate: DKK 4,000,000
- No will — default rules of arveloven apply
Hans Dies
Hans dies. His estate is divided as follows:
Step 1: Determine Marie’s share of fælleseje
Under fælleseje, Marie already owns half of the marital assets. Her share: DKK 2,000,000.
Step 2: Divide Hans’s half of the estate
Hans’s share of the estate is DKK 2,000,000. Under arveloven:
- Marie receives: DKK 500,000 (the “ægtefælledelen”) plus half of the remainder
- Marie receives: DKK 500,000 + (DKK 1,500,000 ÷ 2) = DKK 500,000 + DKK 750,000 = DKK 1,250,000
- Emma and Lars each receive: DKK 750,000
Step 3: Inheritance tax
- Marie: 0% inheritance tax (spouse)
- Emma and Lars: 0% inheritance tax (children)
Total distribution:
| Person | Amount | Tax |
|---|---|---|
| Marie | DKK 2,000,000 (fælleseje) + DKK 1,250,000 (inheritance) = DKK 3,250,000 | DKK 0 |
| Emma | DKK 750,000 | DKK 0 |
| Lars | DKK 750,000 | DKK 0 |
With a Will
If Hans had written a will leaving everything to Marie, the distribution would be:
| Person | Amount | Tax |
|---|---|---|
| Marie | DKK 4,000,000 | DKK 0 |
| Emma | DKK 0 | DKK 0 |
| Lars | DKK 0 | DKK 0 |
This illustrates why having a will matters — the default rules may not match your wishes.
Practical Tips
Follow these tips to ensure your estate plan is effective and up to date.
Write a Will
Without a will, the default rules of arveloven apply. These may not reflect your wishes, especially if you want your spouse to inherit everything or want to set conditions for your children’s inheritance.
Consider Særeje If It’s a Second Marriage
If you have children from a previous relationship, særeje can protect your pre-marital assets and ensure your children receive their intended inheritance. Without it, fælleseje rules may apply, potentially reducing your children’s share.
Update Pension Beneficiaries
Pension savings pass to your designated beneficiary — not through your will. Check and update your pension beneficiary after every major life event.
Consider Life Insurance
Life insurance provides immediate financial protection for your family. It bypasses the estate, avoids inheritance tax, and ensures your dependants have funds quickly after your death.
Register a Fremtidsfuldmagt
A registered power of attorney ensures someone you trust can manage your finances if you lose capacity. Without one, your family may need to apply for formal guardianship through the courts.
Review Annually
Review your estate plan at least once a year and after any major life event — marriage, divorce, birth of a child, death of a beneficiary, or significant change in assets.
Seek Professional Advice
Danish estate planning involves complex legal and tax considerations. Consult a lawyer (advokat) specialising in estate planning and inheritance law to ensure your plan is structured correctly.
Key Takeaways
- No inheritance tax between spouses and children in Denmark
- Gift tax follows the same structure — spouses and children are tax-free
- Annual gift exemption of DKK 73,600 per child (2026) allows gradual wealth transfer
- A will lets you override the default rules of arveloven and decide who inherits
- Særeje protects assets from 50/50 division in divorce or death
- Fremtidsfuldmagt ensures someone you trust manages your affairs if you lose capacity
- Life insurance and pension beneficiaries bypass the estate — update them regularly
- Trusts can protect assets for children but require professional legal advice
- Review your estate plan annually and after major life events
For the latest thresholds and rules, visit SKAT’s guide on inheritance and gift tax.