This is one of those concepts that doesn’t really translate very eloquently: “the version of the last hand.” Definitive version is the term often used in English, but this is not ideal—as it asserts that there is a definitive version (and, more to the point, suggests that a particular edition is it). In general, I don’t believe in definitive versions. Then again, recognizing that some state of a work is inevitably the version left by a composer (either intentionally or not), I see no problem with the idea of a Fassung letzter Hand; but that doesn’t make it intrinsically more valuable than other states of a work.
It should be noted that Urtext and Fassung letzter Hand—either of which at different times has been the sought-after ideal in critical editions—are conceptually opposite. An Urtext (Ur-, as in Ur of the Chaldees) seeks an original version of the text as definitive, before it is corrupted in transmission—rather than a text that is authoritatively revised by a composer having second thoughts. The idea to reconstruct an Urtext came about when the original sources—and perhaps countless generations thereafter—are lost. The Fassung letzter Hand is usually an editorial strategy to priortize among a plethora of surviving sources.
Occasionally on this blog I have brought up my work on the William Walton Edition; in that project the stated goal was to seek the text as the composer ultimately came to prefer it—which meant, for example that his opera Troilus & Cressida is presented in the edition in a text neither heard nor notated by the composer: the text of that volume gives essentially the 1976 cuts (made for a Covent Garden production featuring Janet Baker, for whom the highest soprano material had to be transposed down) in the 1954 keys. In one of the volumes I edited, the Henry V film suite had the chorus restored to the ensemble on the basis of a letter in which Walton indicated “of course the Agincourt song is far better with the chorus.” These examples manifest a letzter Hand so late as to be even posthumous.
For Settling Scores posts dealing in one way or another with Fassung letzter Hand issues, click here. On Urtext editions and those posing as them, see my post about Rosalyn Tureck’s edition of Bach’s Italian Concerto or another post about a misguided attempt at a new Urtext of the Goldberg Variations.