PACS

[Claire]

Having read through all the information regarding PACS and inheritance we are getting rather nervous. Our situation is as follows:- My parner bought our house in 2003 in his sole name. Being ignorant of French inheritance laws we did not enter a Tontine clause or any other such clause. We are not marrried and he has three grown up children from his first marrige. We are planning to enter into a PACS agreement to minimise the risk to me in later years. Are we doing the right thing ? Is there any other alternative ? Can we now with hindsight have the house put into joint names. There is no mortgage and the house is worth a considerable amount of money. Ideally we wish for me to remain in the house after his death until my death. We would also like for me to be able to sell the house and downsize or return to England if this became necessary. Is this possible ? Some friends of ours in a similar position have had something drawn up by their notaire stating that his partner can remain in the house or rent it out for her lifetime if she so chooses. Has anyone else heard of this arrangement

[Cat]

Hi Claire

I'll start by saying that I'm no expert, but I am in a similar position to you, and have, with my partner, spoken to a notaire on the subject and both drawn up wills.

Entering into a PACS agreement would mimimize your inheritance tax liablilty, but the amount would still be substantial. Without going into actual figures (as these differ depending on circumstances) for an unmarried couple without a PACS, very, very high inheritance tax for the survivor, for a PACSed couple, very high inheritance tax for the survivor, for a married couple, less inheritance tax.

If your partner has children from a previous marriage, it would not be possible to sell the house in the event of his death and keep 100% of the profits.

You can draw up an will at the notaires (whether PACSed or simply living together) to allow you use of the house after his death (usufruct). It only takes around half an hour. You can even rent it out if you like and downsize to a smaller property. But the house remains the property of your partner's children, and you would be in effect a life tenant, but paying no rent.

The first thing to do would certainly be to make an appointment for you both to speak to a notaire. Remember to ask about not only the house itself, but also the about contents and any income from lettings or investments that you or your partner might have, as these do not fall into the same category as the house in a will and would also need to be specified.