The "Wittelsbacher Ausgleichsfonds" or How the Bavarians Probably Got the Best Deal When the Monarchy Ended

The Great Hall of Schloss Nymphenburg

They came to power during the 12th century in the days of Holy Roman Emperor Friedrich I Barbarossa - and on November 7, 1918, their head of the family was the first German King forced to abdicate. But in the end, the former Royal Family of Bavaria may just have gotten the best deals of all the formerly reigning families in Germany. You see, the German nobility is full of curious inheritance cases like the Sayn-Wittgenstein-Berleburg's or the Thurn und Taxis'. In addition to these internal family matters, there are also some interesting constructions between former German reigning family and the German state - or one of its federal states. Case in point: The Wittelsbacher Ausgleichsfonds. It was established as a public foundation in 1923 within the framework of the apportionment of assets and liabilities between the Free State of Bavaria and their former royal family, the Wittelsbachs.

Five years prior, in 1918, the monarchies in Germany had come to their ends and all German-speaking monarchs (save for the Prince of Liechtenstein) had to abdicate. After the future Prime Minister of Bavaria Kurt Eisner had proclaimed the Free State on November 8, the Bavarian parliament decided that same month that property claims of the Wittelsbach family were not eliminated by the revolution but instead to be seen as a civil legal claim. Consequently, it became important to distinguish between private and state property - something that wasn't always too easy as private property had sometimes slowly become state property over the years and vice versa.

Bavaria is perhaps the German state with the highest density of well-known castles, not least due to a potentially mad king and his love for architecture. Until the end of the monarchy in 1918, the Wittelsbachs had ruled Bavaria for a staggering uninterrupted 738 years. You can imagine that during more than seven centuries of interweavement lines tend to get blurry. (In 1818 for example, many private assets were nationalised as the state needed money and a civil list was established in return.)  Up for debate weren't only castles and palaces but also large landholdings and art collections. Pretty soon after the end of the monarchy both sides agreed that, due to partly lost records and the sheer volume of assets, it was better to balance them. There were some castles (like the three palaces of Ludwig II, Schloss Nypmphenburg and the Residenz in Munich, among others) that came into the hands of the state, others (like Schloss Leutstetten or Schloss Wildenwart on the shore of Lake Starnberg) remained in the possession of the more extended branches of the Wittelsbach family - and another few were added to a foundation. 

This agreement between the Bavarian state and the former Bavarian royal house allowed the transfer of assets of the House of Wittelsbach, such as Schloss Hohenschwangau and Schloss Berchtesgaden along with a few others, 11,000 hectares of agricultural land and real estate into a foundation. At the same time, the Wittelsbach family voluntarily agreed to add further private assets, mainly art treasures, to that foundation so that way they would remain permanently accessible to the public. In addition, they also waived all further property claims against the state. The agreement was implemented by law a couple of weeks later and became known as the Wittelsbacher Ausgleichsfonds (or Wittelsbach Compensation Fund).

So what did the heirs of the last King of Bavaria get in return? A pretty good deal! How? The Wittelsbacher Ausgleichsfonds has two main goals: To keep up the endowment fund but also to financially support the members of the Wittelsbach family. While the Foundation itself was public knowledge, it was perhaps one of the best kept secrets of Bavaria for almost one hundred years how much money exactly Duke Franz of Bavaria, the head of the family, and his extended family (well, male members, widows and unmarried princesses) received each year. That was up until a couple of years ago when it became a public point of discussion how much exactly the assets were worth and why the fund wasn't regularly looked into by the Bavarian Court of Audit, which is usually the case for public foundations. 

After long debates, it was finally revealed that the assets of the Wittelsbach Compensation Fund amount to 421 million euros in 2017, according to the Ministry of Finance, and that in between 2004 and 2014 the Wittelsbach family received on average 13.7 million euros from the fund each year. When will the payments end? The day there is no (male) Wittelsbach left as it was agreed in the 1923 law that on that day, all the assets would fall to the Bavarian state. Another right of the head of the Wittelsbach family until then? To live in apartments at Schloss Nymphenburg in Munich. Many of their (former) assets in a public foundation and thus a lot less taxes than if they would be privately owned and still getting millions of euros out of it, plus a right of residence in their former summer residence courtesy of the state? Not many, if any, other formerly reigning German families getting close to that come to mind.