After you're gone ....

[Hoddy]

I thought of this because of something Llwyncelyn wrote in the "When did you take the leap ?" thread.

We have four children between us and we discussed the buying of our holiday home with them before we actually bought it. All thought it a good idea.

As things have turned out, some of them like it more than others and I am now a little worried about what will happen if some of them want to keep it, but cant afford to buy the others out when we die.

Has anyone thought of any easy solution to this ?

Hoddy

[Patf]

We are in the same position as you with 4 children between us. I've never thought of the problem you mention, and I thought I was the world's biggest worrier! What does concern me though is the time it will take our poor offspring to sort out all our belongings here after we've gone, if we end our lives here. I did this for my mother and it took months, though she didn't have much. We do intend to eventually sell the house here and return to UK. They would prefer this, I think. Perhaps your question relates more to the legal side of things - couldn't you make provision for it in your wills? I should add that we are not great believers in acquiring property etc and hanging onto it to hand on to the next generation. Our parents didn't do it and our children don't expect it. Pat.

[cooperlola]

With you there Pat, I tell my mother to spend all her money and have a good time and not to worry about me!  (I did let her take me to Canada last year though...)

[Hoddy]

Cooperlola wrote

"I tell my mother to spend all her money and have a good time and not to worry about me!"

That's exactly what I've done and I'm not bothered about furniture and so on. What bothers me if some of them want to keep the house and others to sell.

I was wondering if anyone had devised or discovered a way of leaving it to them jointly so that one couldn't force the others to sell.

Hoddy

[cooperlola]

I think there are some complicated legal issues here too.  If French inheritance law applies to the property (does it? as Hoddy lives in the UK?) then I believe you have little control as to how it will be divided up when you go, although much depends on the contract you made when you purchased.  Do a search on "inheritance" as this is discussed in great depth on a number of threads.

[Hoddy]

I know the legal position and French law does, of course, apply because the house is in France. I would in any case want each of them to retain their quarter interest in the house.

What I was hoping was, that among the talented, knowledgeable and experienced people here, someone had been able to devise some sort of ingenious private agreement where the ones who love the place could carry on using it without the others exercising their right to sell.

It looks as though it’s impossible, but I’m an optimist. Any ideas ?

Hoddy

[Catalpa]

Why not have in your will a paragraph expressing your preference that the house be sold and the proceeds split? It may have no legal merit but might apply a little moral pressure.

The other thing that occurs to me in this type of discussion: instead of focussing on what might happen if your kids disagree after your death, think how nice it will be if they are all still happy and healthy and able to disagree. Nowhere is it written that children will always outlive their parents.

There's a thought to ponder over Saturday lunch.

[Albert the InfoGipsy]

In effect, either way you are disadvantaging one or more of your offspring. Why should the ones tho don't want to use it as a holiday home 'subsidize' the ones that do? I get the feeling that you are more interested in keeping the house in the family than the benefits your kids will get.

There are various possible combinations and maybe if only one wanted out the remaining three could raise the sheckels to buy them out. As the ratio changes it gets harder for the 'keepers' to buy out the 'leavers'.

If they all want to keep it, great. Otherwise surely each one will have a chunk of money to put towards their own piece of paradise.

[powerdesal]

Hoddy,

I think that I'm right in saying that even if some of the co-owners want to sell, the property cant be sold without 100% agreement of ALL the owners. Therefore it follows that those who want to use it will be able to but cannot be forced to sell against their will. Of course the subsequent family arguments may be another matter. [:(]

[Cat]

Under the changes to French inheritance law that came into play 1st January 2007 it is now possible for your children to sign a Pacte de Famille (witnessed by 2 notaires) to agree to something now, which cannot be revoked after your death.

Obviously you'd need to speak to a notaire about this, but the changes to the law do seem to make it a little easier to sort out this type of thing whilst you are still very much alive and kicking, rather than leaving your family to fight it out after you've gone.

 

 

[Gastines]

With reference to Powersdeal's reply,I  seem to have read recently that the government have/are changing the 100% to 2/3rds. The main purpose is to bring onto the market a quantity of houses that are not used but perhaps one inheritor is preventing the others from selling. No doubt so-one will correct me if I'm wrong. We have a property near us in a location I'd like to be, the house has fallen into a very sorry state over the last few years and is only used by one brother for August holidays.The rest of the family want to sell but so far he has prevented it. They obviously can't afford to maintain it but I presume they would all be liable for their share of outgoings/taxes etc. I keep hoping to hear they've come to an agreement.

Regards.  www.chambre-d'hotes.

[Anton Redman]

There is no easy solution but if you are say 55 rather than 85 those who might want to keep the house might think about taking out an joint life policy on you for enough money to cover buying the other missing share of the house if you pop your clogs unexpectedly. Fairly sure they would have an insurable interest and am pretty sure it becomes very expensive when the insurance company expect you to die within the next decade. They may have a problem with inheritance tax anyway even if all 4 want to keep it. 

[Loiseau]

[quote user="Hoddy"] ...We have four children between us and we discussed the buying of our holiday home with them before we actually bought it. All thought it a good idea. As things have turned out, some of them like it more than others and I am now a little worried about what will happen if some of them want to keep it, but cant afford to buy the others out when we die. ...[/quote]

Reading - perhaps wrongly - between the lines here, Hoddy, I am not sure that the four children are the children of *both* of you?
If yours is a "famille recomposée", there would be the extra complication of which of you two dies first, because *their* children get a cut right away, while those of the survivor do not.  Or not until their own parent dies.

Angela

[Iceni]

[quote user="Hoddy"] Has anyone thought of any easy solution to this ? Hoddy[/quote]

Stop worrying or you will shuffle off before your time. When you are gently decomposing your children will find a solution one way or another.

John

not

[bejay]

Hoddy

I see you describe it as a holiday cottage. If you are a UK resident then I guess that this cottage may be part of a larger UK  estate..Perhaps it might be possible to make financial provision in an English will to compensate for the requirements of French Inheritance law.

bj

[Hoddy]

Thanks for all the replies.

As John not Di pointed out, when I am gently decomposing I shan’t be worrying about it which is why I want to sort it now if I can.

Louiseau, you are right, we are both widowed and have two grown up kids each.

We believe that when the first one of us dies there won’t be a problem because the survivor will be able to keep the house, we have that angle covered.

When the trouble might occur is when the second one of us dies, or if we both die together in a car accident, for example.

Cat I’ll look into the Pacte de Famille idea next time I’m in France and I’ll also look at Anton’s insurance idea.

You’re right Patf - I do worry too much.

Thanks again for your thoughts.

Hoddy

[mint]

hoddy

you're NOT worry too much because this is a matter that you can do something about.  you're only worry too much if it's about something that you can do NOTHING about.

i do believe that sometimes it is only through worrying that we find solutions

[Albert the InfoGipsy]

Hoddy, I think the French inheritance rules mean that the two offspring of the survivor inherit in the end & the other two lose out. Better double-check that.

[Teamedup]

How have bought this property? You need to have usufruit of the place for the survivor and then you could have it so that which ever of you dies first then their children own that half and when the other dies then their children own the other half. And the usufruit means that the remaining spouse can't be kicked out. IF you managed to leave it to all four of them after the second death, then the children of the parent who died first would pay just about 60% in inheritance tax.

Yes this sounds like it needs sorting out and you need very good legal advice.

[Hoddy]

Yes, we did take good legal advice and I think we're OK up to the second death wne all four of them will have to decide what to do.

You're right though - I do need some more advice and as I said we will take it when next in France. When we bought all four were keen to keep the house. Now some of them are less enthusiastic than the others which is what set me thinking.

Thanks again.

Hoddy

[Loiseau]

Hmm, not sure about that, Albert the IG.  Would that just be the "tontine" system?

Whenever this topic is discussed in detail on the forum, the only thing that seems an option to gain control of who gets what is to amend one's marriage regime.  I am sure a search on that will turn up some interesting points.

My family was not quite as "recomposée" as yours, Hoddy; my husband had three children from a previous marriage, and we had one joint one.  The notaire advised us to make a "donation entre epoux", which means that on the death of one, the other automatically gets to keep on using the house and furniture, and it can't be sold over their head. The kids still get their cut in the end, but it's deferred.  That is definitely worth doing, and cost next to nothing.  It really smoothed the formalities afterwards.

On my husband's death, all *four* of *his* children had to have their cut of his half of the property. The residue came to me, along with my own half.  As it happened, we were in the throes of selling a second cottage, so I was able to pay them off with some of the proceeds. The notaire advised me very strongly to do this, so that I would own the property outright.  The children had a bit of tax to pay each, but not a lot.
If I had been the one to die first, my daughter would have had her whack from my half, but not my three stepsons, of course.

The present situation is that I own the house outright. But on my death it now apparently goes *only* to my daughter.  This didn't seem quite fair on the other three (especially since she has already had payment for her share of her father's estate!), but the notaire said I was absolutely not to leave the boys shares in it as they would have to pay ?60% inheritance tax as they are not my blood relations. 

I guess the best thing is to tell my daughter that I would like her to share out the proceeds voluntarily, if and when she sells it.  But of course it is up to her in the end.  Interestingly, like yours, two of the four children like using the house, and the others don't seem to go there.

If you were both to die in the same accident, the law might look on one of you (maybe the older one) officially dying first, which would have a huge effect on the inheritors.  It really is a complete lottery!
As far as I understand it, in your case the two children of whoever dies first would receive one-twelfth of the property value each (one-sixth divided between them) and that's it.  The surviving spouse gets the residue to add to his/her half and then, on the second death, his/her children get the remaining five-sixths to share.

The best thing for you to do is to both go and talk it over with a notaire, and discuss all the possible scenarios and implications... 

Angela

EDIT 
I have taken so long writing this, that TU has popped up with most of the suggestions in rather more succinct vein!  Sorry.

 

 

[Albert the InfoGipsy]

Me? Sure?

Can't answer for the effect of a donation entre epoux but I'm pretty sure that the effect of a tontine or changing marital statut to communaute universelle in isolation would be as I described.

[Teamedup]

The inconvenience of a tontine clause starts if a property is worth more than 76k€, where inheritance taxes start to kick in. I suppose that it would depend on one's circumstances too, ie married or not, unmarried  and there would be 60% to pay. Legal advice is certainly needed about this subject.

[Llwyncelyn]

Dear Hoddy in my earlier posting within 'When did you take the leap' I failed to mention that my wife has two children from a previous marriages indeed has been married three times!  There is no hope for some people. 

Thus for us and no doubt lots of others a huge problem when it comes to French inheritance for we would truly and for hugely private reasons wish that my wife's daughter from her first marriage would not be able to get her hands on what is left here in France or indeed the UK.

In the UK (and you know what I do there!) we have drafted mirror wills the effect of which is to create a discretionary trust and have appointed two trustees and as the document suggests have discretion.  However our wishes in relation to our UK assets are clearly set out for the Trustees and if x still exists then y comes into play.  So I thought that I could at least ring fence the UK side and with our assets.  So you could with any UK property do exactly the same but in France I have tried every way I can to circumvent (and I think that is the wrong word) let us say minimise the inheritance issue but cannot.  So after one of us goes the other has a life interest and when that person goes then I can forsee some unpleasantness.  Should I worry now about that................or should we live life to the full and let them sort it out later. In any event Brown has again attacked Trusts and its now back to the drawing board.

rdgs