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Fritz
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If anyone's interested I've just had this done. All very straightforward, the notaire's fee was €600 and all sorted in three weeks. No complications I suppose, because no previous marriages etc.

Apart from the usual birth and marriage certificates, all they needed to do was look at the deeds of our French property, check his big book of law and knock out a four page document.

To recap, this is a civil contract which enables a surviving spouse to inherit the French assets of the deceased spouse and deferring any tax liability until the death of the survivor. I think.  

The tontine thingy only enables the surviving spouse to inherit, but not to avoid paying tax. I think.

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Not quite. It means everything you own you own together. Not 50/50, but the whole thing. Therefore there is no inheritance at all when the first person dies, because they don't own anything independently!

Tontines only apply to property and nothing else.
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This is really good news, we're struggling with a reluctant notaire having completed the acte authentic in the last week, first of all he denied this could be done, then when we quoted the appropriate parts of the civil code (thank you to the person on another forum who posted an extract from their CU document) he then agreed it might be possible but is currently claiming to need permission from our Maire in England, who of course we dont have!

Could you let me know which region you are in and which notaire you used? 

Thanks

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  • 2 weeks later...
Does the notaire need to know HOW MUCH money/shares/investments you have in order to do this?  I think it's a good idea for my parents to do it because their wordly goods are substantial enough to make inheritance tax etc horrendous, but my mum is very cagey about letting anyone know exactly what she has got, other than saying she has money in the bank!
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My understanding is that what can be included is dependent on whether you are habitually resident in France or not. If not resident the CU can only apply to French real estate property. My understanding also was that you had to adopt the CU before buying the property. To change after purchase and have it affect the property meant that you had to sell the house back to yourselves but under the new CU status - the catch being that you ended up paying the notaire's fees on this 'sale'.

We adopted the CU when we bought our house in France last year and signed the CU at the same time as we completed on the house but literally signed the CU first and then went on to sign for the house purchase.

If you are habitually resident in France the CU can apply to other assets (moveable property, chattels etc). I do not think there is any need to specify the value of these assets.

However my understanding is that the CU does not reduce inheritance tax, it merely defers it so that there is no tax on the death of the first spouse. The surviving spouse owns all the assets so on their death the inheritance tax kicks in on the full amount and indeed could be higher because there will only be one exemption.

We went for a CU because it means that on the first death the survivor owns the property totally and no share passes to the children as it would do under French inheritence law otherwise. I have nothing against my children, they get it all when we both depart this earth but when the first of us goes the survivor will still have full control over our French house. Our estate agent explained that without adopting CU whilst you might not think the surviving spouse would be unhappy sharing ownership with your children you may find that one of them has married and their partner would rather they convert their share of the property to cash so there could be pressure put on the surviving spouse to sell. The converse also applies so that if the surviving spouse decided they no longer wanted to keep the French house once they were on their own, it was their choice alone to sell it. Without the CU the pressure could be the other way round then with the surviving spouse wanting to sell and the children who had inherited a share not wanting to.

There is more information on this on the French Notaires site at www.notaires.fr and also on the French Property Forum at www.headdonconsulting.com
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[quote]Not quite. It means everything you own you own together. Not 50/50, but the whole thing. Therefore there is no inheritance at all when the first person dies, because they don't own anything indepe...[/quote]

Tontines are not only for property . They are simply a general tax  assistance mechanism to reduce taxes on transfers of any type of assets up to 75000euros for married couples. If a tontine is used for jointly held property which is worth more than this then the remainer comes under basic inheritance law.

regs

 

Richard

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We arranged our CU well after the purchase and it was no problem. The document refers to the property we bought and it was all controlled by Blake Lapthorn who seem to know what they are doing (and if it all goes pear shaped they are obliged to carry professional indemnity cover!)

Andy

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  • 3 weeks later...
We are still struggling to get our notaire to do this - he clearly doesn't want to! Currently we are stalemated with him saying he needs a letter from our Maire in UK and with us saying a)no you don't and b)we don't have a Maire in the UK anyway....other than this our house purchase and most of the much vauinted French paperwork has been considerably easier than expected.
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It certainly is possible, you just have to find the right lawyer. I understand it's rather more complicated than doing it before you sign the final documents for buyng a house, or for when there are not previous marriages involved, which is why not all notaires like to do it - and the fees can be higher of course.
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As I understand it, the problem with a CU if you have children by a previous marriage is that ita application can easily be overturned. Under French law you cannot deliberatetly set out to disinherit your children. Technically, a child of a former marriage of the first partner to die would be disinherited. In such a case, this child could successfully challenge the validity of the CU and have it deemed null and void. This clearly could cause problems for the surviving partner who could end up having to sell the home.

French inheritance law is very complicated and it seems that some of the best advice comes from the English firms of solicitors who have set themselves up to deal with this speciality. One has already been mentioned and I would add Turner & Co in Birmingham as another to be recommended. They can be contacted on +44 121 200 1612.
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It is funny that a firm and the number can be mentioned on the site but when someone has had a very bad experience with said firm the post is deleted. However, the first post is left as almost an advert for a very poor service indeed for the possibility of others being hurt !
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  • 3 weeks later...

Hi, I've read with interest the postings on this MB regarding inheritance and in particular the situation of the surviving spouse. We are considering France as a retirement destination but have heard all sorts of stories regarding 'forced' sales of houses to pay off relatives and children following death of one partner. Following postings on the 'CU' (which seems to remove this problem), does anyone have an answer (or a suggested information source) related to the following:

If a CU is adopted to cover all assets of the marriage and one is resident in France then upon the death of one partner is the surviving partner free to sell the French property and do with the proceeds as he/she sees fit? or at this point, would the proceeds of sale have to be shared amongst dependant children and IHT become payable? There are no previous marriages that need to be factored into the situation.

Any comments gratefully received.Thanks

 

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og, There are people who have posted and said that they have taken out CU when they have children. The advice I was given was that if one has young children then it would have to go to court and they would decide if this was possible to do, or if the children are major then they must give their permission. In theory if the parents just take CMU and have not asked permission, then their offspring could take them to court and ask for their inheritance anyway. It would depend on how 'nice' and reasonable one's kids are, or their other half's are.

The reason is that the parent who does this is disinheriting their children and in France it is the child's right to the parents estate when they die. And saying that the child gets it all when both go isn't quite true. The child gets a tax allowance after the death of each parent, if they get their money after the death of both parents then they get taxed on the single amount for which there is only one tax allowance and they end up paying a lot more in death duties.  

The grey area I suppose is getting this done in the UK before moving. And until there is a case where the children demand their money then we'll not know how this could play out.

 

It is all very complicated with so many variables that each person should get as much legal advice as they can and from more than one source. I would also say in France rather than the UK, french notaires after all should know the intracacies of their own system.

The system is quite different here, that is the way it is. The blood line is protected. It is one thing that has really worried me in the past, it seemed unfair, unjust, but I live here and you have to accept that it is just one of those things. Another reason why we don't want to be here in our old age as we know we have to go one day.

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The donation entre epouses is basically what the law was changed to a couple of years ago. It means that the survivor can remain in the property or rent it out and keep the proceeds. If they sell up however, then the children can claim their money.

This information is on the service-public.fr website.

 

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[quote]The donation entre epouses is basically what the law was changed to a couple of years ago. It means that the survivor can remain in the property or rent it out and keep the proceeds. If they sell up h...[/quote]

T.U.

I know you did say 'basically' rather than implying that that was all a D. entre E. did but that was a bit broad brush (esp. for you: usually v. precise!).

We did the D. entre E. because we have no children and one existing parent between us (my mother). Without the DeE, should I pre-decease my wife then my mother inherits a portion of the estate which, on her death, would go jointly to her remaining children (i.e. my 2 brothers: one great, one ghastly). A situation we find quite untenable.

However, after the D e E, the situation is that should I pop off first, then my mother has usufruit (?) a right to live in that portion of the house as before, however now on her death, it reverts completely to my wife.

Since both her parents are gone, on her death, the estate is entirely mine.

 

This may be suitable for those (few) settlers out here on their first marriages, and with no children.

paul

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GP, you situation sounds rather complicated.

Why has your mother got usufruit if you die first? If there is donation entre epoux wouldn't your wife have the usufruit and your mother have nue propriete on the portion of your estate that she should  inherit from you as she is your heriter reservataire.

And why would the place then revert to your wife in the event of the death of your mother, I believed that the nue propriete  would be part of your mother's estate and would go to her descendants? Although I'm sure that she could make a will to leave part of it to your wife.

 

You have left me confused now. I had hoped that I had got to grips, well pretty much got to grips with this.

 

So yes, this  is complicated, and yes I did generalise as the law did change and really does bring into action a donation entre epoux if no provision has been made by the couple. And does have the usufruit etc that benefits the remaining spouse and means that they have a roof over their heads or the rent from the place if that is their choice.

 

 

 

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