Has anybody experience of selling a house under a tontine?

[nectarine]

Hello all, I'd love some clarification or personal experiences please.

Mr. Nectarine and I have, in our time, bought two houses under a tontine arrangement and each time the notaire has taken great pains to explain that, in the event of a death, the deceased's family are disinherited and have no claim to ownership in the house. This suits us (complicated family ... please, don't go there!) .

My understanding is that, technically, when you purchase a house en tontine, the house is not considered to be owned by anybody until the first death, when the survivor is deemed to have always owned the property. Thus the effective way to shut off the deceased's family from a claim.

However, in the last few weeks, I've had three discussions with people about tontines. Each time I've been told that the tontine only enables the survivor to live in the house for their lifetime, but if they sell then the money from the sale has to be split between the survivor and the deceased's reserved inheritors. I've debated the point strongly, but, no, three people have told me I'm wrong. En tontine just gives the survivor the right to live in the house for their lifetime ... try to sell it and French inheritance rules come into play.

Now I'm baffled. Some may say "ask a notaire" but I did, and even one notaire said to Mr. N. "you are disinheriting your children, you understand that, they will never be able to have a claim on this". We went through the nuts and bolts (I'm a bit of a detail freak) and were confident our French home would safely pass to each other, including its monetary value if either decided to sell.

So please, any experiences of selling a house en tontine after the death of one of the owners?. Was this an issue? I'd be grateful to have this clarified.

Thanks.

[AnOther]

I believe your understanding is correct and that tontine does completely disenfranchise the normally reserved heirs of the first to die.

Tontine used to be employed to ensure a survivor could remain in a property after the first death and not be forced out by a grasping family however the law was changed in 2002 to the effect that the survivor of a married couple is entitled to the use of the marital home until their death regardless.

Tontine is probably the best regime for non married couples especially if there are hoards of progeny on one or both sides from previous relationships.

Why the can't just have married or not and be done with it I don't know !

[Pommier]

I may well be wrong on this, but I thought buying 'en tontine' was only of value if the property had a very low value (somewhere around €50.000 comes to mind). We asked a notaire and he said we needed to change our marriage regime to 'Communaute Universelle' which would give the result that all our possessions are jointly owned. 

[AnOther]

I don't think the price has anything to do with tontine nor any other regime.

A useful précis here:

http://www.bllaw.co.uk/pdf.aspx?page=19487&theme=pdf&nopersist=true

[parsnips]

[quote user="Pommier"]I may well be wrong on this, but I thought buying 'en tontine' was only of value if the property had a very low value (somewhere around €50.000 comes to mind). We asked a notaire and he said we needed to change our marriage regime to 'Communaute Universelle' which would give the result that all our possessions are jointly owned. [/quote]

Hi,

      The inheritance tax exemption is restricted to properties under 76000€, BUT, now that married and PACSed couples are exempt from inheritance tax, the tontine gives total tax exemption to the surviving spouse / PACSee.  Only where other people use the tontine ie; concubines etc. does the restriction still come into play.

      The type of marriage contract is irrelevant.

       And the three people who said it was only effective for the life of the survivor were all WRONG.

[nectarine]

thank you all for your replies. I'm not worried about the tax aspect as I understand there's none between spouses, and heck whoever inherits after us can deal with that.

And thank you for your confirmation that the survivor has total rights over the property and proceeds from a sale. I KNEW I was right, this is something I really really researched ...

yours, rather more relieved than I was this morning ...

[idun]

But I also thought that it was illegal in France to disinherit one's kids. You need legal advice about this.

It is so easy for us just to talk about the kids getting money from their parents. I has to be remembered that if you are poor, your kids will be expected to contribute, as well as the grand kids and great grandkids if you end up in care.

For me, that covers the family unit and it works both ways and my feeling is still that one cannot disinherit one's children.

 

Also when I asked about a tontine, there was a plafond that was applicable at the time, and was for very low valued property and a notaire told me that in our region he would never do a tontine contract.

 

Get plenty of proper advice.

[nectarine]

thanks, food for thought, but I've bought two houses and each time we've had a tontine ... and the notaire has specifically told me that the children are disinherited. It's apparently the only technicality where the deceased's family are 'cut out', that's why some notaires don't like it but more liberal ones will tell you the consequences but proceed to insert the clause in the house contract.

[Loiseau]

[quote user="nectarine"]... It's apparently the only technicality where the deceased's family are 'cut out'...[/quote]

I thought selling "en viager" could cut them out too, or is that possible only if you don't have children?

(Sorry, going off at a tangent here, as it's not the point of selling "en tontine", I know.)

Angela

[Judie]

When I was still selling houses in France, the main notaire we used  hardly ever did anything but tontine purchases for our mainly Brit clients. He went to great pains to explain the consequences to the buyers. The great thing about it was that it allowed the surviving spouse to remain in the property without concerns about having to sell straight away. We usually found though, that the house would come on the market fairly soon afterwards as the call of the UK was very strong.

[AnOther]

[quote user="idun"]a notaire told me that in our region he would never do a tontine contract.[/quote]

Notwithstanding any genuine, legitimate, and legal constraints which may exist how can it be the place of a Notaire to deny a purchaser the

right to employ the regime of their choice !

That just falls into the same category as prefectures wrongly demanding translations of driving licences etc.

[parsnips]

[quote user="AnOther"][quote user="idun"]a notaire told me that in our region he would never do a tontine contract.[/quote]

Notwithstanding any genuine, legitimate, and legal constraints which may exist how can it be the place of a Notaire to deny a purchaser the

right to employ the regime of their choice !

That just falls into the same category as prefectures wrongly demanding translations of driving licences etc.

[/quote]

Hi,

 You can always go to a better notaire, but unfortunately you can't chose a better prefecture (without moving house).

[idun]

It was not wise in our region because of the tax implications, that is what I was told. I hadn't seen anything valued at the price a tontine would have come under for years, when I asked.

Also, this desinheriting kids, surely it is against the law in France to deliberately do that, and the kids can appeal?

[pachapapa]

French law, contrary to forum opinion, does not restrain disposal during ones lifetime.

It does so after death, so give all your money to the local SPA before dying.

However your successors may not be keen on this benevolence.

They will try to get you declared "dotty" as a march hare.

Look at the L'Oreal  comings and goings.

Détournement of a succession...check out the punch-up between Marine and Eva.

[parsnips]

[quote user="idun"]

It was not wise in our region because of the tax implications, that is what I was told. I hadn't seen anything valued at the price a tontine would have come under for years, when I asked.

Also, this desinheriting kids, surely it is against the law in France to deliberately do that, and the kids can appeal?

[/quote]

Hi,

     As has been said , now that IHT is abolished between spouses, the tontine is very interesting for married  and PACSed couples, for any value of property.

It is possible for children from previous relationships to attempt to overturn a tontine, but to do so they have to show that the relative risks of the two spouses were greatly disproportionate.  For example if the husband was 75 and the wife 45 and the husband contributed 75% of the purchase price --and the plaintiffs could prove this , then they might get some of the value of the property restored to them .  If in the same case the wife could prove she had provided, say, 80% of the price then it is likely the action would fail.  The probability of UK -based offspring being willing and able to take protracted action in the french courts must be quite low.

     In the case of children being of both spouses , it would be pointless, as the childrens ' inheritance has merely been delayed.

[Pommier]

Hi Parsnips,

You say that the tontine clause is merely delaying the children's inheritance, but surely it is doing more than that in that it is denying the inheritance since the surviving partner can presumably sell the house and then do as they wish with the money.

Have I misunderstood?

[parsnips]

[quote user="Pommier"]

Hi Parsnips,

You say that the tontine clause is merely delaying the children's inheritance, but surely it is doing more than that in that it is denying the inheritance since the surviving partner can presumably sell the house and then do as they wish with the money.

Have I misunderstood?

[/quote]

Hi,

  What you say is correct, but , if the children are the natural offspring of the surviving spouse, they will inherit that spouse's estate (or what is left of it) eventually.  This would be the same if the house was left to the survivor under a "legs residuel", or an estate consisting of liquid assets left under a "Quasi-Usufruit" where the survivor can spend the money.  You have assumed that there is never a way round the forced heirship rule, but , as with any complex system, like the french law, there are always (quite legal) loopholes.

    As I have said any step-children have a (theoretical) means of challenging the tontine.

[Araucaria]

[quote user="parsnips"][quote user="Pommier"]

Hi Parsnips,

You say that the tontine clause is merely delaying the children's inheritance, but surely it is doing more than that in that it is denying the inheritance since the surviving partner can presumably sell the house and then do as they wish with the money.

Have I misunderstood?

[/quote]

Hi,

  What you say is correct, but , if the children are the natural offspring of the surviving spouse, they will inherit that spouse's estate (or what is left of it) eventually.  This would be the same if the house was left to the survivor under a "legs residuel", or an estate consisting of liquid assets left under a "Quasi-Usufruit" where the survivor can spend the money.  You have assumed that there is never a way round the forced heirship rule, but , as with any complex system, like the french law, there are always (quite legal) loopholes.

    As I have said any step-children have a (theoretical) means of challenging the tontine.

[/quote]

But of course before either spouse dies, both of them together can just as easily spend it and "deny the inheritance" to their children. I don't see why it's bad if the widow/er does it but not so bad if they do it together. And it's called Ski-ing ....

[parsnips]

[quote user="Araucaria"][quote user="parsnips"][quote user="Pommier"]

Hi Parsnips,

You say that the tontine clause is merely delaying the children's inheritance, but surely it is doing more than that in that it is denying the inheritance since the surviving partner can presumably sell the house and then do as they wish with the money.

Have I misunderstood?

[/quote]

Hi,

  What you say is correct, but , if the children are the natural offspring of the surviving spouse, they will inherit that spouse's estate (or what is left of it) eventually.  This would be the same if the house was left to the survivor under a "legs residuel", or an estate consisting of liquid assets left under a "Quasi-Usufruit" where the survivor can spend the money.  You have assumed that there is never a way round the forced heirship rule, but , as with any complex system, like the french law, there are always (quite legal) loopholes.

    As I have said any step-children have a (theoretical) means of challenging the tontine.

[/quote]

But of course before either spouse dies, both of them together can just as easily spend it and "deny the inheritance" to their children. I don't see why it's bad if the widow/er does it but not so bad if they do it together. And it's called Ski-ing ....

[/quote]

I COULDN'T AGREE MORE!