French will

[wmw]

Having updated our will in UK (where we are resident) our solicitor advised us to make a separate French will to cover our property in France. Is this advisable/beneficial? Other contacts have given conflicting advice!

[cooperlola]

Your property in France is subject to French law for inheritance purposes and you have little or no choice as to whom your property goes - especially if you have children.  Thus, imo, it's well worth consulting a Notaire (especially if you have a complicated family set-up or have no blood relatives to leave it to).  It costs very little (ours was 60€) and gives you some idea of what will happen when either or both of you dies.

[Clair]

This might help: http://www.completefrance.com/cs/forums/2158709/ShowPost.aspx

[Fay]

I'm widowed and don't have children so consulted a French lawyer based in the UK. Was pretty horrified to learn that my sister (my closest living relative) is not counted under French law as a 'blood relative'! Only parents and children fall into that category.

My sister would therefore be liable for an enormous French inheritance tax bill that might even have to be paid before UK probate was granted.

As a result I have had to make amendments to my UK will to ensure that, if I fall under a bus tomorrow, my sister would not be bankrupted by inheriting the house.

As to the French will itself, it's a one-page document that the French solicitor drew up, of which I have French and English copies. The French one has been lodged with the notaire via whom we bought the house; the English one is filed with my will at my UK solicitors.

Cost a tidy sum, but was worth it for the advice re my sister.

[parsnips]

[quote user="Fay"]I'm widowed and don't have children so consulted a French lawyer based in the UK. Was pretty horrified to learn that my sister (my closest living relative) is not counted under French law as a 'blood relative'! Only parents and children fall into that category.

My sister would therefore be liable for an enormous French inheritance tax bill that might even have to be paid before UK probate was granted.

As a result I have had to make amendments to my UK will to ensure that, if I fall under a bus tomorrow, my sister would not be bankrupted by inheriting the house.

As to the French will itself, it's a one-page document that the French solicitor drew up, of which I have French and English copies. The French one has been lodged with the notaire via whom we bought the house; the English one is filed with my will at my UK solicitors.

Cost a tidy sum, but was worth it for the advice re my sister.[/quote]

Hi,

     For information ,your sister , if she inherited would have 15697€ tax free, then 24069€ @35%, and the balance @45%.

If you are both UK resident,and particularly if your sister has children, a way round this would be to set up a sale of the property to her in "viager", she pays a deposit and then a monthly "pension" to you and on your death gets full possession of the house. As UK residents it would be easy for you to pass the money back to her in the UK.(What you do there is of no concern to the french authorities).

     

[Chancer]

Well every cloud has a silver lining Fay.

I have a sister who is how shall we put it, rather greedy, envious and lazy and has been badgering me for some years regarding inheritance provision in France. in return for her wishing me dead I enjoy winding it in to her and love telling her that I have not made a French will and am quite happy for the money to go to the state, I do of course know this is untrue.

Anyway word has got back to her that after 5 years of hard labour my investment here is no worth quite a bit and will soon be bearing fruit so not surprisingly she has announced that she will be visiting.

I am going to tell her that I took her advise and have made a French will with her as the sole inheritee as she is the only one to show any interest in my affairs, it will be hard keeping a straight face saying that!

Then I can hit her with the bombshell re the 45% tax and that she will have to stump it up before probate can be granted on my UK assets [:D]

At least now I can look foward to the visit!

P.S. I cant wait to suggest the viager to her [6]

[Fay]

Thank you Parsnips! That's very helpful indeed. (We are both UK residents and my sister does have two grown-up children.)

[Fay]

Chancer - lol!

[parsnips]

[quote user="Fay"]Thank you Parsnips! That's very helpful indeed. (We are both UK residents and my sister does have two grown-up children.)[/quote]

Hi,

    Your nephews/nieces have 7849 € tax free, before paying @55% on the balance, so by manipulating the proportions in a will there is 31 395€ tax free available , plus 24069€ @35%.

For a house worth 150 000€ ,say, this gives a total tax bill of 50 965€ or 34%.  It is possible to defer payment of droits de succession ,until the house is sold, for instance.

If you go the sale in "viager" route, you should discuss with an english fluent notaire (no need to mention what arrangements you might make in the UK). 

[Judith]

I had a similar problem of who would inherit from me - also my sister.  We have arranged to our own satisfaction with advice from the notaire how ownership passes beween hubby and I, and onwards to sister (no, I don't want to know all the pitfalls, these have been well discussed with the aforesaid notaire), but what I have done is subscribed to an assurance vie (before I became French resident) , with my sister as beneficiary, thus even / when she has to pay tax, the AV should cover it (that is assuming that I have not spent it all before them of course!!:).

[Fay]

All this information has been great - many thanks again. I will look into the suggested options carefully and Take Steps!

[wmw]

Thank you for replying.

We have already taken a French marriage contract (Communaute Universelle) so we have no problem as to what happens when one of us dies. We are interested to know why our UK solicitor should advise us to make a separate French will and not include the French property in our UK will.

[parsnips]

[quote user="wmw"]Thank you for replying.

We have already taken a French marriage contract (Communaute Universelle) so we have no problem as to what happens when one of us dies. We are interested to know why our UK solicitor should advise us to make a separate French will and not include the French property in our UK will.[/quote]

Hi,

      As regards the two of you, with the CU (provided you have a clause of "attribution integrale") you don't need a french will. A french will is only necessary to stipulate what you each want to become of the house, if it is still owned by the second of you to die. By leaving a french will for this eventuality, you will save your ultimate heirs a lot of trouble and expense.

[Laurier]

Very interesting, Fay, as I am also a widow with no living parents nor children and had assumed my sister would be my 'blood relative' to inherit (if and when I buy a place.) That has really surprised me and changed my thinking.

Thanks for the info, Parsnips. I am now wondering if there is a similar arrangement I could invoke to leave the place to my step-children.

Also, if one has no husband, parents nor children, who is considered the next 'blood' relative, I wonder?

Laurier

[Laurier]

Re my last posting - forgot to mention that my step-children are not UK residents so I wonder if and how I could will a French residence to them without them incurring huge expenses.

Would appreciate any further advice.

Thanks

Laurier

[Fay]

Good question, re nearest blood relative, Laurier. It would be logical for French law to take that into account, but...

I'm thinking I might make an appointment to see my Notaire to ask about that.

This has really shaken up my thinking about what happens to the house in the future. (I'm also now, frankly, a bit p'd off with the British-based French lawyer who didn't give me the info that Parsnips kindly did!)

[allanb]

I don't want to raise your hopes uselessly, but it seems that there are circumstances in which your sister would be exempt from the inheritance tax: namely. if at the time of your death (a) she is single, widowed, divorced or separated, and (b) she is over 50 or disabled, and (c) she has lived with you continuously for the previous 5 years.

I'm sorry if this doesn't apply in your case.

[Fay]

Thank you, allanb... a) and b) apply already but c) is, I think, unlikely - much as I love her!

[Laurier]

... also applies to me, Fay. a) and b) OK but c) unlikely also much as I love her! Thanks allanb.

Laurier

[parsnips]

[quote user="Laurier"]Re my last posting - forgot to mention that my step-children are not UK residents so I wonder if and how I could will a French residence to them without them incurring huge expenses.

Would appreciate any further advice.

Thanks

Laurier[/quote]

Hi,

       If you mean your step-children are french resident it makes it more difficult to transfer money to them but what many people are unaware of is the system of "presents de usage". A person can give such a present in kind or in cash(cheque etc.) to another with whom they have a relationship (including friendship without any blood-relationship) at "special occasions" such as Xmas, birthdays ,weddings etc.

   Such gifts are entirely outside the scope of gift (succession) tax. They can be quite substantial and there is case law to indicate permissable amounts before they can be re-classed as taxable donations.  It all depends on the principle that the giver should not "impoverish " himself.  Over time court decisions have indicated that a donor can give a gift to the value of 1.22% of his total estate to each recipient , on each suitable "occasion". Thus a person with a total estate worth 500 000€ can give Xmas gifts worth up to 6 000€ to each recipient. If wishing to return the money paid under a sale "en viager" it would be wise to split the amount between the smallest amounts possible and include the step -grandchildren (if any) for example, and use all permissable "occasions"--birthdays Xmas, passing exams, engagements, and other like events.

[parsnips]

[quote user="Laurier"]Very interesting, Fay, as I am also a widow with no living parents nor children and had assumed my sister would be my 'blood relative' to inherit (if and when I buy a place.) That has really surprised me and changed my thinking.

Thanks for the info, Parsnips. I am now wondering if there is a similar arrangement I could invoke to leave the place to my step-children.

Also, if one has no husband, parents nor children, who is considered the next 'blood' relative, I wonder?

Laurier[/quote]

Hi, In such circumstances, the right to inherit is determined in accordance with the mechanism of the "Fente" ,a sort of table of ever-diminishing relationships radiating out from the deceased. 1st degree: children and parents, 2nd degree: grand children,sisters /brothers, 3rd degree:niece/nephew ,grand niece/nephew, then if none of these found 2nd degree; grandparents, 3rd degree: great grand parents, uncles /aunts 4th degree;cousins ,great-aunts/uncles, -----some cases may exist where there are no traceable heirs and without a will the estate goes to the french state.

   Unfortunately the distant heirs ,although nearest in the bloodline, will still usually pay heavy inheritance tax in line with their degree of relationship. The only exception being grand children where their parents are dead, and nephews/nieces, where their parents are already dead , who get their parents' allowances and rates under the rule of "representation".

[Laurier]

Parsnips

Thanks so much for the info. It really is mind boggling and sounds so dreadfully complicated. I can feel myself getting agitated just thinking about it and trying to work it out. Anyway, I will try and absorb some of it and get some clear focus. It is tempting to think that I will be dead so why should I care how they sort it out afterwards, for the sake of a small pad, but I can't bring myself to do that! Incidentally, my step-children live in USA, Aus and Zimbabwe so I can only guess that the problem is even greater ...

Thanks again - really appreciate the advice.

Laurier