19 December 2013

French inheritance laws

I am not an expert in this area and I am just translating material about French inheritance laws that I've found on French Wikipedia.

Under French law, your surviving spouse and your children, legitimate or illegitimate, from whatever marriage, cannot be disinherited — they have a status called « réservataire » when it comes to your estate. Each child has a right to inherit an equal part of your estate. Your surviving spouse can elect to take either a lifetime right to the whole estate, or to take outright ownership of a one-quarter share.

If you leave behind descendents when you die, those descendents take precedence over any other family members. If are survived by children, they divide up the inheritance in equal shares. However, if the one of your children has died before you die, any children of that child (your grandchildren) will inherit your deceased child's share.

If you have no descendents when you die, the inheritance will go to your other family members including ascendents (parents or grandparents) or collateral relatives (siblings, aunts and uncles, cousins).
 
If you are survived by your parents and/or siblings but no descendents, your mother and father each inherit one quarter of your estate and the remaining half goes to your siblings, each getting an equal share.If one of your parents is deceased, his or her one-quarter share is given to your siblings. If both your parents are deceased, the entirety of your estate is inherited by your siblings.

If you are not survived by your parents or any siblings, your estate is inherited  by your surviving aunts, uncles, and cousins. One half of the estate goes to surviving relatives representing your maternal line and one half goes to those representing your paternal line. If all the relatives in one line or the other are deceased, the inheritance goes in its entirety to the surviving relatives of the other line.

As for your parents, siblings, aunts, uncles, and cousins, they can all be "disinherited" by drawing up a last will and testament that designates your surviving spouse as your sole heir. This is called a « donation entre époux » and has by law to be set up by a notaire in France.

Starting in August 2015, French inheritance laws will no longer be "unilateral". In other words, the inheritance rules and laws that apply in an individual's case will be those of the country where the death occurred. The law will apply to real property and all other assets.

There is also a provision explaining that your last place is residence is the criterion on which the decision about the laws regarding your estate is based, but that's not at all clear to me. What if my place of legal residence is in Saint-Aignan but I happen to die in an accident while I'm visiting my family in the U.S.? What inheritance laws would apply? Does having dual nationality play any role in all of this?

In France, when you inherit you inherit property and assets you also inherit the deceased's debts. Because of that fact, nobody can be required to accept an inheritance. If your deceased parent's debts amount to more than the value of the estate you would inherit, you can simply refuse the inheritance.

None of this deals with the issue of inheritance taxes, which are higher as your relation to the deceased is more distant. The surviving spouse and children inherit tax-free, I believe, but all other relatives pay significant inheritance taxes — up to 60% or more of the value of the property inherited. I'll have to look more into those issues. (See this post for more information.)

I think that all this is very interesting and that it might be helpful to you who now live in France or are thinking about moving here and buying property.

10 comments:

  1. Wow..you've given Niall & I plenty to think about! Thanks for all the information.

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  2. It all makes work for the working man to do... in this case the notaires!!
    What a minefield... no wonder there are so many decaying, deserted properties around...

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  3. I read somewhere that you can disinherit a child in exceptional circumstances - if they are convicted of your attempted murder, for instance!

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  4. So... I'm not sure that I read in there... if there is just a surviving spouse, but no descendants, does everything go to that spouse, or does it all follow the lines you explained here?

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  5. The "Death Tax" is treated very differently here in the U.S. In fact, for most people here it is nonexistent.
    From the irs.gov website:
    Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $5,250,000 in 2013.
    (The estates of each and every U.S. citizen are subject to the federal estate tax, but not every estate actually has to pay the tax. The Internal Revenue Code gives each U.S. citizen a "coupon" that can be applied against their estate tax bill. In 2013 the "coupon" is $5,250,000. Thus, in 2013 if the value of the net estate - meaning the gross estate reduced by allowable estate tax credits and deductions - does not exceed $5,250,000, then the estate will pass to the heirs free from federal estate taxes.)

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  6. Pauline, that seems like a reasonable exception to the law protecting the offspring's right to inherit.

    Judy, if there are no descendents, the surviving spouse inherits the estate provided one of two conditions is met:

    - the deceased's parents are also deceased (in the absence of a testament, each living parent automatically inherits 1/4 of the deceased's estate)

    - the deceased has willed the entirety of the estate to the surviving spouse by setting up a donation au dernier vivant (entre époux) in consultation with a notaire.

    Collateral relatives enter into the equation only if no spouse, children, or parents are surviving.

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  7. Even though the 'Feds' allow most of us to escape the "Death Tax" as Dean has outlined, each state can impose their own taxes. Here in Oregon, we are taxed by our state. In the past 10 years the total estate value before being taxed has increased...but it is definitely something to consider. As a side note, most U.S. states have decided estate tax is a double tax on earned income and have consequently eliminated it.

    Mary in Oregon

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  8. Ken, there's a current thread on Fodor's France forum where your information might be very useful. A Canadian couple is interested in buying a house in France and advice to them included some information about inheritance, which was not as clear as your post is.

    http://www.fodors.com/community/europe/buying-a-house-in-the-languedoc-the-hunt-begins.cfm#last-comment

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  9. Very nice post. Inheritance in France is very weird for Americans (Brits too).

    Should be mentioned here that the EU has new rules for inheritance and this impacts French law. It appears that we will have the right to choose which country's laws we want applied and it can be our country of nationality, not the country of residence.

    http://ec.europa.eu/justice/civil/family-matters/successions/

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  10. Victoria, do you know if these reciprocal agreements apply only among European countries or if the are across-the-board agreements including the U.S., Canada, Australia, for example?

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