another will question

[shimble]

Just a question concerning wills. i own a property in france, and have no debts or mortgage, my parents are in their eighties and should i die tomorrow would find dealing with my property a great strain. i have no children. i am not married although i have a long term french girlfriend however we are not paxed either. am i able to write a will that will share my assets between my parents if they are still alive my sister my girlfriend and possibly one or two very close personal friends. in the event of my death i would ideally like my property to be used and shared by those named in the will. which leads onto inheritance tax as i would not wish to leave those around me with a large bill can someone expalin how inheritance works and how this would be affected in this situation. hopefully i will behere for many yars to come and i will have time to sort this situation to the benefit of all concerned, many thanks

[Pickles]

Please take legal advice on your situation: there are two issues with which you need to concern yourself: the first concerns the niceties of French inheritance law, but then the French TAX law will probably cause a significantly bigger headache.

My understanding is that in the absence of children and spouse, parents and siblings become automatic inheriters of a proportion of your estate under French law. If you are not French resident, then you may use the Hague Convention to make a UK will govern the shareout .... BUT you need to be aware that this does not prevent the French taxman from taking his share - and in the case of unrelated legatees, the maximum tax-free legacy is of the order of 5000 € per person - or at least it was the last time I looked at it, and the percentage of tax payable in the case of an unrelated legatee rises very rapidly once the 5K threshold is breached, and I seem to recall it possibly hitting 60% after a few very small steps.

 Hence if you are not careful, you could end up with your chosen heirs having to sell the property in order to pay the tax bill!

Regards

Pickles

[Teamedup]

I thought that someone unrelated only got an abattement of 1500€ and then paid 60% on the rest.

You need good legal advice about this from at least one notaire.

[Chancer]

I am in a similar situation, I live here in my house, am unmarried with no French partner.

I have a will in the UK that divides my estate up between surviving relatives (they are diminishing!) this covers my property and savings/bank accounts in the UK but makes no mention of my French property as I had not decided to make the move at that time.

My UK bank holds and is the executor of the will, I have not and don't really want to be bothered with doing a French one at the moment.

If  I were to die am I right in assuming that my french assets would be sorted out by the executor (the bank) any French taxes paid and the rest divided amongst my heirs in accordance with my will or in accordance with the French regulations?

I should point out that I am not interested in forking out now to reduce the inheritance taxes of my heirs but would like to know the position.

My siblings were very dissapointed to find that both my father and grandfather had the temerity to actually spend and enjoy their money whilst alive and to pass on the remainder to their partners.

They are now showing an uncomfortable (for me) amount of interest in my affairs, despite them being considerably older than me, the more they pressurise me to make a French will for their benefit, which is laughable because in all probability I will outlive them by many years, the more stubborn I become.

[allanb]

I'm sure the only good advice is to consult a notary, but I can tell you what my notary told me when I consulted him about making a will in France:

If you were resident in France (however that is defined) at the time of your death, all your assets (no matter where) are subject to French inheritance law, and a French notary will be responsible for distributing them.

If you have a will (whether French or English) it will be effective only to the extent that there are disposable assets left after the legal distribution.  However, from a practical point of view it is better not to leave an English will, because of the possible conflict between the duties of the UK executor and those of the French notary (the notary has to take steps, through the Foreign Office, to establish his rights).

So finally his advice was:

Revoke your English will in any case.  Make a French will if you want to give special directions for the remaining disposable assets; otherwise, you don't need to.

I certainly don't suggest that you should rely on this, but it would be interesting to know whether other people have had similar advice.

[Teamedup]

That is exactly what we were told too, us being french residents.

[Will]

My understanding is much the same. If you are French resident, then all of your assets, wherever they are held, will be subject to French succession law (and tax of course). Even if you are not French resident, then the French authorities are likely to regard themselves as having the right to deal with any immovable property in France, regardless of any will you may have made in any other country. An English will made by a French resident may be taken into account in France, but only in the absence of a French will, and then after French succession law has been applied to the estate, and any provision in the will that is not in line with French law and practice will not be valid. So that makes a non-French will pretty useless in France.

People do come up with ideas about transferring property into a company, or buying houses in other names, or involving offshore trusts, but these are of only limited use if you are French resident. If the French authorities decide that any such measures were put into place in order to get round inheritance tax or succession law, they will apply the law and charge the tax anyway.

[Patf]

Is it possible to make a will in France giving all that you leave to charities? Can this bypass the family inheritance system? Would there be any tax advantage? Pat.

[Teamedup]

You would need legal advice about this. If there are heritiers then I don't think that we can leave everything to someone/something else.  Also depending on the charity, then the receiver of this amount may well have 60% inheritance tax to pay on any sum given. So no 'advantages', in fact a charity not carefully chosen could end up with a lot less than one would hope to give them.

[Pickles]

[quote user="Patf"]Is it possible to make a will in France giving all that you leave to charities? Can this bypass the family inheritance system? Would there be any tax advantage? Pat.

[/quote]

We were advised that a French will which passed your estate to FRENCH-registered charities would be received by the charity intact and free of tax. However, as noted above, the French will can only dispose of what is left of the estate after reserved inheriters are catered for, so it can't bypass reserved family inheriters. There is a tax advantage to the charity as it will receive the estate tax-free. We were advised that you can make a will which leaves the disposable estate (ie after reserved inheriters) to a charity with the proviso that it makes some onward payments to other people (eg distant or non-relatives) to whom you wish to leave money, but however note that these bequests will be taxed as usual from your estate - the only advantage of doing it this way is that the charity will have legal people who will be able to sort out your estate and make the payments. Note also that the charity can refuse its bequest (when you die) - which it could and probably would do if the onward payments were a substantial proportion of the estate and meant that the amount due to them is not worth the effort!

Pickles

[Patf]

Thanks to TU and Pickles. Looks like we will have to arrange to die while living  in the UK. Pat.

[Teamedup]

ROFL, I have often thought exactly the same Patf.

 

[Pierre ZFP]

I bet no-one has ever asked here what is the best country to DIE in.

How quickly can you give up French residency and become Brit resident again?  Is it a case of first signs of chest pains 'get me on a ferry - NOW' or do you have to start being taxed in UK again?  A letter to Necastle tax office perhaps?

[Teamedup]

What a good question. I have always not wanted to die in France as a french resident. I wouldn't like to die on holiday somewhere either, as it must be quite a waff on for those who are left, not that it would be my problem, but I would still rather not that 'mine' have such an awkward situation to deal with. So the UK would be the best place for me really.