Inheriting property

[scaries]

My wife and have both been married previously and have 2 children each of those marriages. We have no children in this marriage. Due to a long and involved saga our wills in this country bestow our estate to a charity. We seem to have hit a road block re French law. We wish to ensure when the surviving partner dies the estate goes where we agree, a charity, and not to any of the children. Is there a legal way to make this happen in French law. We have spoken to so called expert solicitors in this country who are alleged French law experts but they want a minimum of £300 up front. All I want is a simple answer, can we make sure our estate goes to a charity when we both die. I am perfectly willing to pay solicitors fees if we can purchase with the above proviso.

[Will]

The answer is basically no - under the Napoleonic code your offspring cannot be disinherited. There are possible ways around it involving holding French property through a company but this has other implications as far as tax is concerned, in both UK and France, and really needs to be set up by a specialist at the time of purchase.

The best person to advise on French law is a French lawyer, that may sound obvious but they will know far more than any English solicitor.

If it's any consolation your offspring are not likely to get much out of it, as children from previous marriages can be hit very hard with inheritance tax of some 60%. Sorry if its not the answer you wanted to hear, but it's the French way, and a way that we all have to observe.

[Teamedup]

By chance, I was reading Femme Actuel from 25/1/04 yesterday. The have a legal section and someone had written in and asked if they could leave a small sum to charity when they died. Even for this, the legal eagle was clear, they could leave this money, if their children were in agreement, as the parents would be in fact, taking away funds that are rightfully their childrens'.

 

So to your question, you can't give everything to the remaining spouse, as soon as one of you dies then their children will own their parent's part of the estate. 

 

Apart from setting up a company as Will suggested, I don't know how you could get around this and even then I'm not sure that a company wouldn't have pitfalls associated with it.

[Teamedup]

-> Peut-on déshériter ses enfants ?

Non, car les enfants sont, comme les parents du défunt d’ailleurs, des héritiers dits " réservataires ". Cela veut dire qu’ils hériteront obligatoirement d’une partie du patrimoine du défunt, appelée la " réserve héréditaire ", que ce dernier le veuille ou non. La portion de la réserve héréditaire varie selon la composition familiale du défunt. Ainsi, le défunt doit laisser la moitié de son patrimoine s’il laisse un enfant ; les 2/3 s’il en laisse deux et les 3/4 s’il en laisse trois ou plus… S’il n’a pas d’enfant, il doit obligatoirement laisser la moitié en usufruit de son patrimoine à ses père et mère (1/4 à chacun) et 1/4 si seulement l’un des deux est encore vivant. Il est impossible de faire une donation ou un testament sur cette fraction de patrimoine dès lors qu’il existe de tels héritiers.       And that is what Immonot say, it's the notaires web site. Do a search on google.fr......desheriter les enfants. Lots of information on there.   I know there are people on here who have done all sorts of things to make their affairs a l'anglaise, but this isn't autre manche and the law protects the blood line here. Any of us can try and do as we please, but our children can make a claim against our estates if they are not in agreement, it is after all their 'right' under french law to inherit from their parents.

[Coral]

I believe I read somewhere about being able to set up a trust where the property is donated to the trust. Both husband and wife are made beneficiaries of the trust with the charity being named as the beneficiary in the event of the death of the survivor. The property does not form part of the estate so the children would have no claim.

How this would be accepted in France I do not know.

I have also heard of elderly French couples selling the ownership of the house to the bank and retaining the right to remain in the property for their lifetime. Whether this is done because they are *****d off with their off-spring or they are in need of money --- that:s your guess

Any comments?

Coral

[Clarkkent]

I cannot add very much to this debate other than to say consult a French lawyer.

However:

"I believe I read somewhere about being able to set up a trust where the property is donated to the trust."

I think I read on this forum once that the English law concept of "trust" does not exist in French law.

"I have also heard of elderly French couples selling the ownership of the house to the bank and retaining the right to remain in the property for their lifetime. Whether this is done because they are *****d off with their off-spring or they are in need of money --- that:s your guess"

Could this be rent viager - which is a way of realising the equity contained in real property?

[Will]

By a lucky chance, we were able to discuss this and related issues yesterday evening with a consultant working in France and the French notaire he works with.

The consultant, and the notaire, were definite about the fact that French property has to be subject to French law, and as such you cannot prevent your children inheriting it. The fact that they are from previous marriages complicates things, in that when one spouse dies the estate has to be shared between the remaining spouse and the deceased spouse's children, who will all be liable for inheritance tax (depending on the value of the estate and unless special arrangements have been made, e.g. change of marriage regime which is not always the most efficient solution). When the remaining spouse dies, the property passes to the remaining spouse's children, with tax payable again. The only way you can bypass this and leave the money to somebody else, or to a charity, is by agreement of the children (who must have reached the age of majority) and the remaining spouse; even so some notaires may see this as flouting French law and refuse to cooperate. Inheritance tax will still be payable though.

An SCI is unlikely to solve the problem as the shares in the company have to be distributed according to French law in the event of the death of a shareholder resident in France. It is also true, according to the consultant and notaire, that a trust could be set up but this is unlikely to work as French law does not recognise trusts.

If there aren't any children, or surviving parents, brothers, sisters etc, you have more freedom, as Mac1003 says, but depending on how your estate is set up the French government is likely to claim a large proportion.

Moreover, if you are French residents, these provisions apply to your worldwide assets; not only those in France.

If anybody would like details of the consultant - who is based near Caen and whose name will be known to many who have followed this forum - please contact me. I can't recommend him personally because we haven't actually used his services - yet. But he has over 20 years of financial and banking experience in France so should be able to speak with some authority.

[Will]

Further to my earlier posting, and in response to Mac1003's comment, it does appear that there is a fairly new law in France concerning making gifts during your lifetime. It seems to be designed to reduce inheritance tax liability for your children, rather along the same lines as similar provisions in the UK. However I think (though I could well be wrong because this is very much second- or third-hand information) that it can also be applied to gifts to charities. I believe the actual sum one is allowed to give is comparatively small, compared with the potential size of one's estate, something like 20,000€ in a ten-year period. So it might help a bit - you would need to see a reasonably progressive French lawyer or inheritance specialist, as many old-fashioned notaires might not know much about it, being new.

[Teamedup]

Obviously giving away one's own money when alive is quite a different thing... had anyone else realised that there were restrictions on this too. I seem to remember hearing about this a while back.

[Will]

[quote]It's not often I disagree with Will, but I am fairly sure that some clients of ours have left their property to a charity. It may be,of course, that there were no children involved. I would contact Vi...[/quote]

Thinking further about what Martyn (Mac1003) says above, I think that if anybody can find a way around this problem then Victoria Headdon can. The difficulty is not so much interpreting the law to find a loophole, there are lots of loopholes and contradictions in French law, but finding a notaire or avocat who agrees with your interpretation and is prepared to implement it. Headdon is experienced in doing things in France 'à l'Anglais' so would certainly be worth contacting. We can't guarantee that they will come up with an ideal solution for you but you never know. They aren't cheap, but it could prove a good investment for you.

[Sue Smith]

We live permanently in France and own no other property, although we do have endowments etc. which are not paid out for a few years yet. We have no children and no living parents and have had a "Donation Entre Epoux" drawn up by a notaire which ensures that when one of us dies, the house and monies etc. go automatically to the remaining partner. We THOUGHT that we could then make a French will, leaving house, monies etc. owned by the surviving partner to whoever we choose. However, we do have relatives in the U.K. Having read the above, and various similar threads in the past, does this mean that any surviving relatives must inherit or can we leave our money/property as we wish? This is really complicated stuff and we THOUGHT we had got it all sorted!!!

Regards,

Sue.

[scaries]

Thank you to all who have replied. i'm not happy with the answers but at least I know where we stand. Again thank you.  Scaries

[Will]

[quote]We live permanently in France and own no other property, although we do have endowments etc. which are not paid out for a few years yet. We have no children and no living parents and have had a "Donat...[/quote]

Sue, I think you need to talk to a specialist in French law or finance about this. The donation entre epoux is a good way of protecting the rights of the surviving spouse, but after the decease of the surviving partner French inheritance law, and perhaps more significantly inheritance tax, then applies.

Scaries - sorry we couldn't give you the answer you wanted, but at least you have an insight into the minefield of French inheritance and a couple of useful contacts who may be able to give a definitive answer.

[Richardbk]

[quote]I believe I read somewhere about being able to set up a trust where the property is donated to the trust. Both husband and wife are made beneficiaries of the trust with the charity being named as the ...[/quote]

trusts are not recognised in france - for the simple reason that if they did people could get around the inheritance laws !

 

back to the first question - can you leave it all to a charity. If you are resident in france the answer is absoutely no. If you are non resident an SCI company could be used ,as the shares would be distributed acording to non-French law.

 

regs

 

Richard

[Mutts]

As a point of interest, I'd like to add my experience to this thread. My grandfather died in 1965 in Paris. He was British, my grandmother was French. To avoid French Inheritance laws my grandmother went to solicitors in London and had them produce  documents which persuaded the authorities that my grandfather's estate be dealt with under English law, not French, on the basis that they married in England (six weeks later they married again in France) and their first matrimonial home was in England.

No idea if this could happen in current times - perhaps the law has been tightened up. I'd be interested to know if anyone else has experience of this or was it a one-off?

I'd also be interested to know of any genealogy hints and tips for France.

http://jonesfamily.activeservice.co.uk

 

[IAN_S]

Will

My wife and I have six children from other marriages, all over 18.

Disregarding the tax issue, is it possible to set up a situation whereby all six will eventually inherit our property when we are both dead.

We had the tontine clause inserted in the contract when we bought our house thinking only to protect each other and not worrying about inheritance, a common mistake I suppose.

We are due to see our notaire shortly about wills and any information in advance would be appreciated.

 

 

 

[Will]

I'm not qualified to give a legal opinion but it seem that the best thing would be to adopt the children so they are, as far as French law is concerned, children of your present marriage. This can be done in France even when they are over 18. We are about to go down a similar route - which was suggested to us some time ago, but was complicated by the fact that the kids' natural father owned property in France himself; now that's sold there should be no obstacle.

I'm sure the notaire will tell you whether adoption is possible in your case and whether it is right for you - though if you don't get the answer you want, do talk to another lawyer (e.g. an avocat) as notaires don't always give the best advice.

[Tourangelle]

To reply to Sue, I think that you are right, if you have no parents or children, you can do whatever you like with you money, however it may be necessary to disinherit brothers, sisters, nieces, nephews formally in your French will.

[Mazan]

All I want is a simple answer, can we make sure our estate goes to a charity when we both die.

Having been personally involved in a similar situation that dragged on for 10 years I can only hope you are fully aware that if a French resident leaves money to a non-French charity it will probably be subject to French tax at a rate of 60%. (I was more disgusted by this than anything else I have seen in France in 30 years of living here, and that is saying something.)

There are ways around this, just as there are ways around having to leave money to children you don't like but you need to sort it out before you die.

And try and be sure that any advice you get comes in writing with a signature and guarantee. Notaires and similar French professionals are very good at giving bad verbal advice and then accepting no responsibility for it later.

[Sue Smith]

Hi janealain,

We're hoping that we and you are right. We won't have much to leave - and some nephews/nieces are much more needy than others. Would seem sensible to leave what bit we'll have to those who need it most.

Regards,

Sue.

[Will]

I found in a back issue of Living France (March 2004) an article by Bill Blevins of Blevins Franks about setting up an offshore trust. He seemed to think it was possible, but the article was written in a very vague and non-commital way when it came to trusts set up by French residents and/or taxpayers. It may be worth getting hold of a copy, or contacting that company.

I'm not saying it's impossible to disinherit blood relatives, which includes siblings, nephews, nieces etc, but it's very difficult as it goes against the fundamental principles of Napoleonic law (as opposed to common law which applies in UK, most of the USA and many other places).

[Cazs]

I have read with interest this thread and have a question.

We are a married couple with a daughter age 10. My husband 10 years my senior has a daughter from a previous marriage. If I purchased the house in my name only, then who will inherit if a) I leave a will or b) I dont?

 

 

 

[Teamedup]

You need good legal advice about this. What you are suggesting would disinherit your husband's daughter.

If you bought in your name and did nothing, then upon your death your daughter would get the lot, maybe your husband might get a little, but if she was major, and you really had done nothing, I suspect that the new law may not apply and she could kick him out and sell it if she wanted. I also suspect that if she was minor, then the court would appoint someone to protect her rights, this is what is done here.

 

As I said, you need good legal advice.

 

 

[Cazs]

Does the Napoleonic law just refer to property or cash, savings, bonds, shares etc...?

 

[Teamedup]

Property certainly and I feel pretty certain that some of the other things are included. I know that life insurance policies can be left to who ever one wants.

Get legal advice.

Under french law you main heir is your daughter. And both your husband's daughters are his main heirs.