Tontine Clause

[kfeaton]

We are buying a property in France, my husband has two children from a previous marriage and wants me to have full use and title of the property in the event of his death. We have therefore asked for the Tontine Clause to be included in the paperwork. However, the Notaire does not seem to think this is necessary. We are confused, as the day of completion is rapidly approaching.
Any advice would be appreciated

Karen

[Teamedup]

LAST EDITED ON 29-Jan-04 AT 12:35 PM (GMT)

You certainly need to do something, even with the recent law to protect spouses.

Tontines are not always the best thing though as they are only advantageous for properties under a certain value.

You will need to get the advice of at least one notaire as to what would be the best thing to protect your interests in the event of your husband's death. As his children will be his heritiers and as such entitled to most of his estate, you would only be entitled to about 10% AFAIK.

Donation entre epouse could be something to ask about, and that is probably what would be best for you, but you must discuss this with a notaire. Or you could change your marriage regime, perhaps!? but that would have to be marked on your documentation for your home too. Also, if you die first then it would be the same situation for him, and your family would be your heritiers.

[Will]

LAST EDITED ON 29-Jan-04 AT 12:44 PM (GMT)

A notaire knows infinitely more about French succession rights than I do of course. And it looks as you you have a good grasp of the principles.

In a nutshell, inheritance law isn't really geared up to deal with second marriages. Your husband's children inherit, by right, most of his share of the property - you don't. If you have no children of your own and you were to die first there would probably not be a problem. But if your husband predeceases you, you could lose your rights to continue living in your house because what was your husband's share would now belong to his children, and most of your own share could disappear in inheritance tax as you and he are not blood relatives. Buying en tontine gives you a right to live there for the rest of your life.

I can't say whether this is right for you as I don't know all the circumstances, so it's important to take advice, and get a solution you are satisfied with. It can be near-impossible to change things after the sale is concluded.

Buying en tontine isn't always the best solution; there can be financial implications. It never does any harm to ask another legal expert, not only the notaire handling the sale.

Will (50)

[kesi]

We found ourselves in a similar position but not only did we both have children by previous marriages we wanted them to inherit in un equal amounts when both of us are gone. Having found our UK notaire totally incompetant in this area we were about to pull out of the sale when our immobilier put us on to a consultant in France who resolved our problem in a couple of days. It wouldn't suit everyone but basically the house ownership was split 80% for my wife and 20% for me with a usufruit to ensure the remaining partner had full use of the property until his/her death. This may only be possible if you are paying cash for the property, and you need to be sure that there may not be a possibility of a divorce in the future!!

Good luck, KESI

[Pushkin]

I can relate to your dilemma I divorced and re-married. I had two children by that first marriage. My (now) husband had not been married before. Though the notaire said it was not necessary we insisted on a 'Clause Tontine' after taking professional advice. Though it may not be the complete answer at least you have gone some way to protecting your situation.

Sue

[kfeaton]

Just to update our situation. Our Notaire has sorted out our particular situation, and the Tontine Clause is in our contract as this is the best way for us.He is also sorting out our French wills for us. We move in a month, everything finally sorted. Talk to your Notaire, he will sort out the best for your situation.

Hope this helps anyone in a similar situation

Karen

[Bonnie]

This is so confusing!! We are in the process of purchasing near Domfront. Bear with me,as this may be a bit long winded!! Both of us have been married before. I have one child, my husband has two. None from this marriage. I am quite happy for the children to get their share, but my husband is 15 years older than me and without being too morbid, law of averages says I will out live him. I do not want to be in the position of having to sell my maison secondaire, and wish to have the right to use it until I then meet my maker. Should I be looking at this tontine clause? We will not complete until July, so would appreciate any advice.

[Richardbk]

Tontine was orginally used as a means to protect the 2nd spouse on the death of the first. It is also a general purpose facility to allow transfer of other assets, particularly between spouses. However, it only works to a certain asset value, afterwhich the surviving spouse could still have to 'move out' and or 'pay up' . However, since mid 2003 a new law came into place which prevented children of the deceased from immediately claiming their inheritance and hence forcing out the survivor. This new law still recognises the inheritance, but the survivor has a number of rights and options such as usefruct of the property and/or to take a direct share. In any cases s/he can not be chucked out. All this relates to the marriage regimes in which assets are considered as a part split between the 2 spouses this is usually 50/50, but other ratios can be used. This is the default marriage regime in the UK and the one that would apply when moving to France. For some other countries the marriage is 'transferred' to France as 'community'

Because of the above and because more and more houses are above the relatively low tontine threshold, tontine is being used less and less in france. In fact for the average family with say 2-3 direct line heirs, either from exisiting or current marriages the value of the property has to be fairly large to start atracting inheritance taxes as the thresholds are 50-75K each.

The only real way to achieve absolute ownership of a property (above the tontine limit) on the death of the first spouse is to change the marriage regime to community. Whether this can be done 'properly' depends on whether their are potential heirs under 18, agreement of heirs over 18 etc. This has been discussed in other threads. In most cases inheritance taxes, applied at the death of the 2nd spouse are more expensive using this method. However there are disadvantages to the community marriage in that it can be extremely difficult to get out of should there be a divorce, separation etc - In france most marriages seem to start with the separation of assets regime and then when in their late 50s/60s they tend to change them over to the community regime.

What remains unclear to me is whether tontine can actually be used by a non resident on a 2nd house - my understanding was that tontine could only be used on primary residence - I am also unclear whether tontine can really be used by non residents, since in effect it is a tool to reduce taxes. I am thus a little sceptical of whether all the 'inserted' tontines on this forum have much legal standing - unless anybody could fill me in on the above. As I said earlier my experience is that many notaires do not have experience in international affairs.

regs

Richard

[Joh]

Karen
You could (with your Husbands permission(not being sexist)) do as my wife and I, being in the same position as yourselves. I have two children from a previous marriage. When we purchased our property all the paper work was signed by my wife (newer model) Who went to the Notaires on her own. Giving her sole ownership. As we wanted to have something of our own that WE had worked for. Don't get me wrong I am not being hard on my children as they will get enough when I go anyway. Our intention is to retire to France so if I go first, then at least my wife has somewhere to live out her day's without worry, Sorry if this is getting a bit morbid, but you have to plan ahead.
Terry