clause tontine

[Rivington]

Hi! we bought our house near Crozant, Creuse about seven years ago and are planning to move permanently just as soon as our uk house is sold. (of course in the present climate we could be in our graves before that happens!)  [:'(] I have been having some misgivings about the the fact that we bought with a clause en tontine. We were advised at the time that it was fine for us as we have only ever been married to each other and have two children from the marriage. It was an article in the LF magazine about the changes in succession tax which began to worry me.

There is no longer inheritance tax to pay between spouses, which I assume applies to the en tontine regime as well, but there was a suggestion that this may not last. The clause has never been looked on favourably apparently, because it is possible that one's children could be disinherited by it in some circumstances, it was suggested that the tax might be reinstated between husbands and wives in this case.

I know the regime can be changed to the communaute universelle (?) don't think that's the right spelling! -but I'm not sure exactly what that is and whether it would be better. I'm sure there are lots of knowledgeable people out there who can help and I would welcome the advice![8-)]

[tinabee]

Is the LF magazine article available on-line?  It sounds a bit odd and it would be good to see the original text which caused you the worry.

There is a good explanation of tontine here:

http://www.french-property.com/guides/france/finance-taxation/inheritance/tontine/

I can't see any problems with this in your situation since your children will ultimately inherit from the surviving spouse, except tha the children could end up paying more inheritance tax.

However, it would certainly be advisable to consult a notaire once you are resident in France to determine the best approach to inheritance planning for your particular situation.

[Kitty]

There is a load of stuff on this Forum about tontine.  Here's a link:

http://www.completefrance.com/cs/search/SearchResults.aspx?q=tontine&f=&u=

In one of the threads recently, I remember that there was a discussion about swapping over to a different type of clause (communauté universelle):

http://www.completefrance.com/cs/search/SearchResults.aspx?q=communaut%c3%a9%20universelle&f=&u=

Happy reading!  Perhaps you can post the outcome?

 

[Jo]

We researched this in detail when we were about to purchase our house as everyone was advising us to buy "en tontine" however, on further investigation it appears that "en tontine" is more suitable for those with more than one marriage and step children to consider, not something that applied to us. "en tontine" means that when one partner dies the other inherits the property, regardless of dependents, for their lifetime, but does mean you can pay up to 60% in death duties. We are an "original" couple and all the children are our own, so we opted to change our marriage to a communaute unverselle, which means we both own the property in it's entirety, and on the death of the first partner the survivor only pays 1% tax, the majority being paid on the death of the second parent, sorry kids!![6] This however must be done BEFORE you purchase the property.

[Ysatis]

I have a few of questions if someone can answer.

 

   If a property is bought en tontine, and for example the husband dies leaving the wife to completely own the house 100%...

 

a) Is the wife legally shown on the deeds to be the sole owner?

 

b) If the wife remarries to someone who has children of his own, and she dies before him, will his children inherit anything or will it be solely only her children?

 

c) What would be the position if a property was bought en indivision on the event of the surviving spouse remarrying someone who had children?

 

Regards,

 

 

[milkeybar kid]

[quote user="Jo"]We researched this in detail when we were about to purchase our house as everyone was advising us to buy "en tontine" however, on further investigation it appears that "en tontine" is more suitable for those with more than one marriage and step children to consider, not something that applied to us. "en tontine" means that when one partner dies the other inherits the property, regardless of dependents, for their lifetime, but does mean you can pay up to 60% in death duties. We are an "original" couple and all the children are our own, so we opted to change our marriage to a communaute unverselle, which means we both own the property in it's entirety, and on the death of the first partner the survivor only pays 1% tax, the majority being paid on the death of the second parent, sorry kids!![6] This however must be done BEFORE you purchase the property.
[/quote]

WRONG in your statement of " BEFORE you purchase property". We were "en tontine" simply because it seemed like a good idea at the time! 4 years  AFTER "tontine " we decide to change to Communaute Unverselle, all done through the Notaire this cost us approx 600 Euro's complete and inc of fees . Simple and painless.[:D] I am aware of an instance where a French man married to an English person had the same done (no problem) but the cost was much more expensive as it has to go before a court -just different procedure if one is a French national.

Mrs MBK

[WJT]

[quote user="milkeybar kid"]

[quote user="Jo"]We researched this in detail when we were about to purchase our house as everyone was advising us to buy "en tontine" however, on further investigation it appears that "en tontine" is more suitable for those with more than one marriage and step children to consider, not something that applied to us. "en tontine" means that when one partner dies the other inherits the property, regardless of dependents, for their lifetime, but does mean you can pay up to 60% in death duties. We are an "original" couple and all the children are our own, so we opted to change our marriage to a communaute unverselle, which means we both own the property in it's entirety, and on the death of the first partner the survivor only pays 1% tax, the majority being paid on the death of the second parent, sorry kids!![6] This however must be done BEFORE you purchase the property.
[/quote]

WRONG in your statement of " BEFORE you purchase property". We were "en tontine" simply because it seemed like a good idea at the time! 4 years  AFTER "tontine " we decide to change to Communaute Unverselle, all done through the Notaire this cost us approx 600 Euro's complete and inc of fees . Simple and painless.[:D] I am aware of an instance where a French man married to an English person had the same done (no problem) but the cost was much more expensive as it has to go before a court -just different procedure if one is a French national.

Mrs MBK

[/quote]

Do you know if the opposite is possible? Can you change from a Communaute Universelle to a tontine after the fact?

[milkeybar kid]

Sorry, I have no idea. Somebody out there surely must have actually done that or tried- [blink][:D]

[Will]

[quote user="WJT"]

Do you know if the opposite is possible? Can you change from a Communaute Universelle to a tontine after the fact?

[/quote]

I rather doubt it - the two are different things. CU is a marriage regime, tontine is a way of buying property so that on the death of one spouse it becomes the property of the survivor as if the first spose had never existed.

There's no reason why you should not be able to change from CU to separation des biens, or any other marriage regime. In fact I have heard that French people sometimes do this in order to protect the marital home from the consequences of a business failure. But if you did not buy 'en tontine' to start with it is very difficult to change this; you would have to consult a notaire.

Incidentally, I am told that under Sarkozy's latest rulings, the CU has lost many of its advantages, particularly for those with children from previous relationships. Tontine is again the favoured option with many notaires.

 

[Clarkkent]

I have a few of questions if someone can answer.

 

   If a property is bought en tontine, and for example the husband dies leaving the wife to completely own the house 100%...

 

a) Is the wife legally shown on the deeds to be the sole owner?

 

b) If the wife remarries to someone who has children of his own, and she dies before him, will his children inherit anything or will it be solely only her children?

 

c) What would be the position if a property was bought en indivision on the event of the surviving spouse remarrying someone who had children?

 

Regards,

 

My only qualification for answering this is that my wife and I bought en tontine and she subsequently died.

I believe that the concept of deeds (in the English legal sense) does not exist in France, but that evidence of ownership is found in the records of the French equivalent of the Land Registry. (This is therefore similar to registered land in England, where there are no "deeds" but a certificate detailing ownership.) When my wife died, I went to the notaire who prepared an amendment to the existing record stating that I was the sole owner.

The property is now entirely mine and should I remarry, my new wife will acquire no rights in the property at all - unless I choose to give them to her.

[Ysatis]

Thanks Clarkkent,

 

That's made things a little more clearer.

 

 

[WJT]

[quote user="Will"][quote user="WJT"]

Do you know if the opposite is possible? Can you change from a Communaute Universelle to a tontine after the fact?

[/quote]

I rather doubt it - the two are different things. CU is a marriage regime, tontine is a way of buying property so that on the death of one spouse it becomes the property of the survivor as if the first spose had never existed.

There's no reason why you should not be able to change from CU to separation des biens, or any other marriage regime. In fact I have heard that French people sometimes do this in order to protect the marital home from the consequences of a business failure. But if you did not buy 'en tontine' to start with it is very difficult to change this; you would have to consult a notaire.

Incidentally, I am told that under Sarkozy's latest rulings, the CU has lost many of its advantages, particularly for those with children from previous relationships. Tontine is again the favoured option with many notaires.

 

[/quote]

Thank you for the response Will, unfortunately it is what I expected.

I think you are right about the latest rulings about no inheritance tax between spouses taking away some of the advantages of the CU. However, I have read recently that they may change the ruling in regards to the tontine. So, it is very difficult to know what is best. But it doesn't matter in our case if you can't add the tontine clause after the fact. We will wait a little while and look into it further if they don't change the ruling. Thanks again.