More inheritance questions

[bryansmith]

I have been happily married for 20 years second time around. I have children from my first marriage who deliberately cut themselves off from me 25 years ago.

Do I understand from previous postings that I must make provision for them in my will (even if I most cetainly do not wish to) and cannot avoid leaving part of my estate to them ?

[Teamedup]

I'll put it this way, if you do nothing and you purchase a property here either just in your name or with your wife, then your children automatically inherit just about your half of the property or all of it if it is just in your name.

No one on here can tell you everything, you need to get legal advice. In France the blood line is protected and it is hard to get around it if not almost impossible.

[Richardbk]

[quote]I have been happily married for 20 years second time around. I have children from my first marriage who deliberately cut themselves off from me 25 years ago. Do I understand from previous postings t...[/quote]

unfortunately if you own property in france and are resident in france there is nothing you can do about it. There are no loop holes, e.g trusts are not recognised etc etc. Your previous children have a right to your share of the property and if residence, all other assets in your name.  If you are not resident in france you can by via an SCI company( more admin and cost) and the property does not come under French inheritance laws and neither do the other assets. If you change your marriage regime you could in effect pass the property to your wife, but here you need permission of your children.

 

regs

 

Richard

[pooch]

Here are 2 scenarios:

1. A couple, married, both with childrenfrom previous marriages. They buy a property in France.

They buy, with no tontine and no will.  What happens when the first one dies?

2. A couple, not married, both with children from previous marriages. They buy a property in France.

They buy, with tontine and a will. What happens when the first one dies? What happens if they thenm marry?

Any answers to these please? Could they have done anything better?

 

 

[Tourangelle]

just an element of an answer with regard to both of the scenarios is that how many children you have will make a difference. If you have only one child, then you have more "freedom" than if you have 3 to do what you want with what you have because they have the right to a part.

[Will]

Pooch - the best thing they can do is probably to get married and then adopt the children so that they are, effectively, children of both partners (that's assuming they want the children to inherit without loads of complications). Get a notaire to ensure that their marriage contract in France is suitable for their future needs.

If they do not marry then the surviving partner stands to either lose everything, or to pay inheritance tax at the maximum rate (60%). It can be different if it they are tax resident in France or it is a holiday home, and the value of the house can also affect the tax position.

There are many variables so you need to get specialist advice for your particular situation.

[pooch]

So - basically, from a ""business"" point of view - working on the basis that when a couple buy a house in france - and working on a 50/50 purchase basis - when one of the couple pass away - having children of course, the survivor discovers that they have made a bad investment as they walk away with only a fraction of their investment. And with one partner not being able to leave the property to the other half in its entirety as is normal in britain and most people would expect to do. If they decide that they no longer want to stay in France by themselves, they have to sell up, pay up (kids and inheritance) and come back to England and have to live by what they have left? e.g.only 50% of their initial outlay (25% of the value of the propety?). In our case it would only be enough to buy a caravan possibly or having to go into rented accomodation and living of the state for some. I have spent weeks now studying the books and internet and I can't believe that so many british still thing it is a good idea under these circumstances. We are gutted at the moment.

In our case, I have 3 children from a previous marriage, my partner has one. We are not married but the notaire told us we would have to marry as not to be would be a terribly bad situation to be in!!!. We want(ed) to buy a house 50/50 and become residents until one of us dies. Neither of us would want to stay in France by ourselves so in the event we would come home a lot worse off. We are seriously considering NOT doing this now after discovering the limitations. Our Franch solicitor here mentioned his wonderment at the number of british people who buy in France without considering the aspects of French law and who are total ignorant of thier personal scenario. I wonder just how many people have had bad wake up calls.....? any more thoughts?  

One avenue I am asking advice about today is starting up a UK company and buying a property throught the company and "renting" it. That way it would be a company asset. My partner and myself would be directors. I know there are other tax implications but we will see what the advice is. I will keep you posted......... does anyone know anything about doing this. Has any one done it?? 

 

[Teamedup]

It all always seems a  little less complicated in the UK as one can make wills easily enough, but partner doesn't actually mean anything, or have any legal standing in english law. And it doesn't in France either. I would not be in France and not married, quite simply, I like having a legal contract that says that we are teamedup.

Once kids by other relationships come into the equation, then everyone, married or not, needs very very good legal advice before even approaching this minefield. It can be hard enough with kids from the relationship.

AFAIK a company would only be OK if you were not french residents. And the british tax man, so it has been said, may want tax on your income from this property. Nothing is easy.

 

[Richardbk]

[quote]So - basically, from a ""business"" point of view - working on the basis that when a couple buy a house in france - and working on a 50/50 purchase basis - when one of the couple pass away - having ch...[/quote]

The main difference is culture, which many brits find hard to understand. This is not the UK ! - In france it is considered normal that your blood lines have more priority than the spouse or partner ! The fact that in the UK you can disinherit the whole family and leave it to the cat is considered very strange by the French.

If you buy via a UK company, the UK tax man may see it as a benefit in kind and you may be taxed on it. If you are resident in France and are the sole directors with income coming only from france the company could be considered within your worldwide assets and as such would still come under French inheritance law.

As I have said the French have blocked every loop hole on this one - Unless you are under a community marriage regime or use a tontine(there is a limit to the amount that can be freely transferred with a tontine), the only real option is to be outside france for >183 days/year and use a French SCI as a holding company.

regs

Richard

[pooch]

Thanks richard. You have shed most light on my thoughts. As I have had one experience (in GB) of what can happen when one spouse dies and the family all try their very best to get a slice of the cake, I do know how ugly things can get.

I don't think I want to be party to that ever again. So I think I would rather stay with the devil I know in this country. As far as the maths go it seems like a far better idea - despite our rising council tax etc.

Here, my partner and I own 50% each of our property and have set up a trust and respective wills to cover all aspects. Neither of us will be left with less than we want and need and neither of us will ever be without a home ..... we shall see.

[Hagar]

I don't think I want to be party to that ever again. So I think I would rather stay with the devil I know in this country. As far as the maths go it seems like a far better idea - despite our rising council tax etc.

I am no expert here - only basing this on things I have read here and elsewhere.

Would it not be posible to enter into a "communauté universelle" whereby the property falls to the surviving spouse. You would need to be married and would need written consent from the children.

On first death the surviving spouse then sells up and returns to UK. From then on inheritance is under UK law.

Must be a flaw in that as it sounds too simple - and looks like you would be evading french inheritance tax.

rgds

Hagar

 

 

 

[WJT]

We changed our Marriage regime to the CU and did not get permission from Husband's children from previous marriage and was told by our French Notaire and our (--) UK based Solicitor and Agent that when one of us dies that the house will belong wholly to the surviving spouse with no inheritance tax due. Our Notaire, Philippe Laurent based in Sarlat advised us on this issue, our agent, Agence Wilson and Turner & Co. Solicitors did as well. We paid substantial fees for this advise.

Before I was told off, I self edited my post.

[Richardbk]

[quote]We changed our Marriage regime to the CU and did not get permission from Husband's children from previous marriage and was told by our French Notaire and our (--) UK based Solicitor and Agent that whe...[/quote]

I am afraid that even though you have spent a lot a money you have been given very dodgy advice. Technically you can change the regime without asking permission. I.e there is no form to fill in. However, your children can request to a french judge that the change of marriage was illegal as it deprived them of their inheritance rights. It is almost certain than in such a case they would win as there are similar cases. Remember that not all notaires and many UK based notaires are not experts in inheritance and international situations.

For children under 18 it is also technically possible to change a marriage regime, but again this is inadvisable, since again you are depriving them, of a right without them having a legal say. In addition this is a possibility that is not available to French citizens. Similarly on reaching 18 they could contest the regime change.

Schemes that do not involve the children in the process are considered as basically trying to circumvent the system and are treated accordingly. Consequently French courts and judges pratically always side with the children, upholding the basic principals of inheritance under french law.

regs

Richard

[Guest CFrost]

The problem I have with some French laws is the seeming inconsistency from department to department and even within departments.  From what WJT said it even exists within partnerships.  I say that because just last week I raised the topic of changing our marriage régime to la communauté universelle (C.U) with the partnership mentioned.  With both of us having children from a previous marriage the reply was absolutely ‘pas possible’!  I am still waiting for a reply from another notaire who to my surprise did not rule it out immediately.

 

 I have read all that I could on this subject and yes, I now understand and reluctantly accept that with previous children involved, the answer has to be categorically ‘no’.  And yet I know of people who have children from a previous marriage / relationship and they have said that they have changed their regime to C.U.  Was the notaire not on the ball, was the existence of children ‘from another bed’ not disclosed?  I really can’t see how this can happen.

 

The books say that C.U was basically designed for elderly couples (no business risks) without children (no problem in forsaking initial tax free allowance) and in fact it is not used very much by the French (0.17% of married population in 2002).  If unfortunately a couple do change their régime to C.U and there are other children involved these children on the death of their parent have the right to sue for what is legally theirs by ‘action en retranchement’ in accordance with article 1527 du Code Civil. Arrangements which are intended to benefit the surviving spouse and THEN the children fall into the category of legitimate estate planning.  Arrangements intended to disinherit children outright do not and can be subsequently struck down by the courts.

 

I have also read on this forum that a change to C.U is possible with children from a previous marriage if said children ‘give their permission’!  I can find absolutely no reference to this anywhere. Can they actually sign away their legal rights without even knowing what they comprise or when and if they would come into force?

 

I have been round the buoy time and again on this one (hence this outpouring) and have now definitely resolved to give up all attempts to change our regime to C.U and stick with our very costly ‘en tontine’  ……unless of course someone out there knows better!

[Tourangelle]

I read the other day that CU is used a lot in Alsace, apparently they have different ideas there and it is gaining in popularity in the rest of France. I think it was in Que Choisir special argent.

I can't see how it could work with two lots of children because one lot automatically loses out.

Communauté universelle seems not to present a problem at all if the children (aged 18+) agree, but only if they are from the marriage or if it is done before they are born, otherwise it looks like a minefield...

[Jo53]

As I understand it (only from what I've read locally, I'm not an expert) any French couple getting married can choose their regime, and the majority of couples marrying for the first time now choose communaute. If you don't actively choose communaute, then your marriage is classed as 'separation des biens'. That is why English mariages are classed as being 'separation' - which is stupid, because the laws we actually married under are much closer to communaute than separation.

BTW, how much does it cost to change to CU once you are French resident? We were told by our notaire that we could have done it for free before we left the UK, but now it will cost us about 1500 euros in legal fees. Has anyone changed, and how much does it cost? We have 3 small children together, none from any other relationships.

 

Jo

[Teamedup]

I was told that a couple with under age children could not 'change' their regime. You can ask about it, but doing so would be changing the children's rights and that was why I was told it couldn't be allowed.

[WJT]

Scorpio and Richardbk, I am totally bewildered Jo53, I have also heard that most French couples nowadays adopt the CU when getting Married which is not consistent to the statistic Scorpio read so even more confusing. However as far as the fees, we are still based in the UK at the moment and it wasn't free for us but I guess somewhat marginal regarding the Notaire charges. The Notaire charged us about 350 euro if I am remembering correctly, this was last July. This does not include the fee we gave our UK Solicitor for his advise regarding a CU which I believe in addition to the £2,500 fee was about £300.

I find all of this very confusing. Our Notaire is meant to be quite a respectable one in the area and because of the language barrier he made a point with our Agent present to try and be as clear about it as possible. In fact he made a drawing for us showing a triangle, spouse, spouse, children. When first spouse dies house will be owned by surviving spouse then crossed out children of the first spouse and told us they receive nothing. He then leaves the room for us to discuss further and returns a few moments later for us to sign the CU.  By the way both of my Husband's children are well over 18 (of which we have made provisions for in the UK, mind you not that they have a need for any) and I have none but as far as I can remember the Notaire never asked us the age of the children and certainly never asked about consent.

I do find it hard to believe that all three advisers, Notaire, Agent, Solicitor could have it so wrong. I will ring his office tomorrow and put this to him.

For me this is all very difficult and I am sure sounds very selfish to some that are in different situations. However, when as a couple you decide to move to rural France things could change very quickly if something happens to one of you. For my husband and I, neither of us would probably want to live in that situation alone and at an older vulnerable age would need to know we could do as we wish or need to with the property.

[Teamedup]

WJT, as you are still in the UK you may be OK with a CU.

The notaire I spoke to also mentioned this. He did understand that the basic marriage in the UK was the equivilant of the CU in France.

He also said that if we had married with the intention of moving to France and had not made a specific contract in the UK then the french would consider that a marriage without a formal contract was the equivilant of the separation de biens. (In our case, he knew we had no kids when we married.)

But if we had married in the UK without the intention of coming to France, then we could claim that we married under UK terms and that we considered that our marriage was already a CU and would like if officially considered as such by the french.

In our case after 14 odd years here at the time, he thought that we were pushing it a bit. And as I simply hadn't got enough free cash to take it to court to see the judge at that time didn't do it.

We opted for the donation and usufruit. Tontine in our region isn't something that a notaire would suggest, property prices are way too high for that.

Minefield isn't it. I cannot even begin to say how I felt about all this when I found out about it. I could have screamed from the roof tops that this land was injust. But there again, when did fairness ever come into this sort of thing. If people don' t make wills and sort out their affairs in the UK then it can be equally unfair too.

The excuse apparently for not making a will in the UK is that a person will die if they do. 

 

 

And being married is the easy bit. Not being married in France, well I simply would not be. You would have to have every last little thing clearly registered somewher as to who exactly owned what, even including putting payments say into a joint mortgage. And if one doesn't as everything was say considered 'joint', then the children could claim their money and that along with the tax on anything left is about 60% too for a concubin(e), one could end up in dire straights. 

We have not even mentioned tutors being assigned to protect under age children's rights when a parent dies. The other parent can't do just what they want here. I am not sure how this works, but there is a system in place for this.

[Tourangelle]

JO53 I don't think most couples are getting married with the communauté universelle. The two main marriage contracts are called communauté something, most French people get married with communauté reduite aux acquets because it is the default one, if you don't do any thing then that is what you get automatically.

See the site http://www.service-public.fr/

I know for sure that separation de bien is not the automatic thing at all I have two lots of French friends who have done the contract.

TU I was told that as we got married in Britain with the aim of coming to France then we were considered to have a French marriage from the outset and we would therefore have the communauté réduite aux acquets. This was what the consulate in London told us... but in our livret de famille it just says aucun dans l'acte originel, enigmatic! I think it is something to do with the Treaty of Amsterdam, but I might have read that on here!!

[pooch]

Well, after we have exhausted every imaginable avenue concerning inheritance rights in France, and speaking with a french solicitor yesterday, who clarified our concerns, we have now very reluctantly decided that it would be financial suicide for the remaining partner to move there and buy a house. Therefore, we are withdrawing from the french property market and taking our house in UK off the market and will continue to live here, knowing that whoever survives can leave peacefully, without any worries about where and how they will be able to spend there remaining days. Maybe it is for many, a case of "the grass is greener on the other side". We can remain partners and not have to marry (although we will at some stage) because french law would otherwise "punish" us even more so, we own our house here together, with a trust in place to take care of our respective children and our own wills, which enable our wishes to be carried out exactly. All straightforward.

One concern that I still have, however, is the conflicting information that is apparantly being given to brits regarding this subject. Many people, it seems, have been badly advised. This is very worrying and something should be done about it to protect everyone's interest. I hope this will happen some day.

We will continue to visit France as we do love it very much and thanks to everyone who has helped us reach this conclusion.

[benson]

I am very interested in this topic as it affects me and my family.  I have just read through all the posts and I think my brain is going to explode!!  Just when I think iv'e got it straight another twist confuses me.

Here is my situation:

Me and my husband are british, we married in UK, We have 2 children together (both under 18)

I have 1 child who lives with us from a previous relationship(not marrage) who is also under 18.

My husband has 2 children from a previous marrage who do not live with us (both under 18)

We bought a property in France and live here perminantly.  We have clause tontine but no will at present.

This is what we thought having clause tontine would mean for us.

Scenario 1:

If I were to die first my husband inherits

does he have to pay tax?

then he dies.

the property is shared between HIS children so effectivly my child is disinherited?

My husband is planning to adopt my child to rectify this. (advice please on process here in France)

scenario 2:

My husband dies first I inherit

Do I have to pay tax?

When I die MY children Inherit so his 2 children from previous marrage are disinherited? (it is not possible for me to adopt them) so he would have to write a will to include them a share?

In both cases will the children also have to pay tax?

Have I got it right or not?  Please help

[pooch]

You need to consult a very good solicitor immediately.........

There are loads of well meaning people out there - each with their own thoughts but it needs to be looked at and advised by a solicitor. Every situation is slightly different so please dont hesitate.

[Iceni]

Benson

From the repeated information we have received and acted upon you are correct. The tax payable is on any property value over €75 K which is quite low but not a total disaster.

No idea if the children will pay tax - not my problem theirs and to be honest they are all well catered for and not getting anything will not matter in their lives.

To live anywhere unmarried is problematic - even in the UK it could make things difficult which is why we got married (eventually).

Finally, to not live your dream because of inheritance is sad, to live your dream without taking these things into consideration and do what you can to mitigate their effects is a disaster and we know of at least one disaster waiting to happen in France to folk who totally ignored all advice and made no provision for the death of one of them as they both have children by previous marriages. The visit to the notaire was made after the 2 year deadline and they have been told there is now nothing they can do but move and that is not an option.

 

[Richardbk]

"He also said that if we had married with the intention of moving to France and had not made a specific contract in the UK then the french would consider that a marriage without a formal contract was the equivilant of the separation de biens. (In our case, he knew we had no kids when we married.)

But if we had married in the UK without the intention of coming to France, then we could claim that we married under UK terms and that we considered that our marriage was already a CU and would like if officially considered as such by the french"

This is a very interesting angle. The partnership of notaires based in Paris that handle a lot of international issues and one which  our organisation uses to advise its staff have said that whilst marriages in scandanvia , holland and a few others are converted by default to CU in france, the default for a UK marriage is always separation of assets (50/50), irrespective of intention. If this could be tested in court the result could be quite far reaching.

On some other points, I think that this difference in approach by notaires by dept or region is probably more to do with the expertise of the notaire in international affairs, rather than by department or region.  Is it thus important that you deal with notaires that are experienced in this field.

The only criteria for changing marriage regime is to have agreement from the previous and existing children.  For children under 18  a judge would act on their behalf - in france this permission is seldom, if ever, given. Assuming you are able to change the marriage regime, the time period for changing a marriage regime, on moving from a 'hague convention country to another' (e.g UK to France) depends on when you were married. Before 1.9.1992 there is no time limit. After this time you have 10 years on moving to change, which can be done by a notaire. If it is >10 years in the latter case only a judge(much more expensive) can change the regime and this also assumes that you spent at least 1 year in the country of marriage before moving. If you moved within a year, you are deemed to be married in your new country so again only a judge could change the regime. 

CU has disadvantages as well. Divorce or separation is extremely difficult and inheritance taxes, paid on the death of the surviving spouse are generally much higher.

My information is the same as Scorpio namely that the norm for marriage in france is separation of assets, simply because they do not how it will turn out. People tend to change to CU much much older in life when they also have their childrens permission.  Note that the 2003 change in the law giving surving spouses more protection in terms of being able to remain in the house also mean that for many French consider that CU is no longer a necessity

regs

Richard