Done to Death

[Nick]

Sorry if this subject has been done to death but.....

We have bought our house in Tontine and wish to keep it that way.
My partner has children by their first marriage, I have none.

Does anyone know a way of safeguarding each other financially as in maybe a life interest Quasi usifruct ( sorry about spelling) but for the capital to go to each others children/family after the death of the final survivor?
Is this possible?

By the way we are married.

And does anyone know of an English speaking notaire in Brittany? You can pm me if you prefer.

[Bevdeforges]

One of the toughest things for us foreigners to accept in France is that your options when it comes to inheritance are pretty narrowly restricted - especially in these cases where one of you has children and the other doesn't. (Which just happens to be my situation as well.)

The tontine is a good idea - but should your partner be the survivor, her kids will then inherit the house on her death and your family is out of the picture.

As far as just general financial protection, you may be able to do something with a donation entre époux. We did ours before the last big change in the inheritance law, so I'm not sure if the same options are still available. It used to be that spouses could not inherit from each other, so the donation gave the surviving spouse the option of either getting a one-quarter share of the estate of the deceased or getting the usufruct interest of the entire estate, with the nue-propriété (remaining) interest going to the heirs of the deceased (i.e. to the kids of your partner, should she die first).

The way they changed the laws in 2002 (I think it was), if there are children from another marriage, the surviving spouse is entitled to 25% of the estate - period - without the usufruit option. The children get the rest. It could well be worthwhile setting up a donation entre époux simply to put the usufruit option on the table, but leave the choice open until the time comes. (Given how relationships with step-children and step-parents can change over time, the advantages and disadvantages of the various options tend to shift, too.)

Sorry, but I don't know any English speaking notaires at all. (Wish I did.)
Cheers,
Bev

[Nick]

Thanks Bevdeforges

I wish I could get a difinitive answer, perhaps as you say, there isn't one.
We can deal with a french only speaking notaires but its just making sure that they fully understand what we want to achieve.

[frogblogger]

Be very careful with advice from a notary. They are really only underqualified lawyers. One cost me £9,000 in unnecessary tax when advising me that I could buy a property in the name of a UK company without any extra tax implications (nothing in writing), whereupon I discovered after a tax deadline had passed that there was a special form to complete once a year, failing which a percentage .... something like 2 or 3 % of the purchase cost - was due in tax. Annually. Try as I might, I could not wriggle out of it

Obviously I never missed another declaration date...

[Bevdeforges]

Originally Posted by Nick

Thanks Bevdeforges

I wish I could get a difinitive answer, perhaps as you say, there isn't one.
We can deal with a french only speaking notaires but its just making sure that they fully understand what we want to achieve.

I'm not really sure if an English speaking notaire would even help in such a situation. I know there are dual-qualified attorneys, because you have to find one in order to get one of the documents you need to get married in France. What would REALLY be useful would be dual-qualified notaires (well, someone qualified in property law in the UK or US and also a French notaire).

The problem seems to be that the French notaires don't really understand what we're trying to accomplish due to the different cultural "norms" involved. And there's the French approach to the whole "service" issue. The notaire will answer questions, but rarely will they try to determine what you want to do. There are certain things the State will allow you to do, but how to combine them to your own advantage or to get around an "awkward" or unusual situation never seems to occur to them. (French attorneys are the same way as far as I can tell.)
Cheers,
Bev

[parsnips]

Originally Posted by Nick

Sorry if this subject has been done to death but.....

We have bought our house in Tontine and wish to keep it that way.
My partner has children by their first marriage, I have none.

Does anyone know a way of safeguarding each other financially as in maybe a life interest Quasi usifruct ( sorry about spelling) but for the capital to go to each others children/family after the death of the final survivor?
Is this possible?

By the way we are married.

And does anyone know of an English speaking notaire in Brittany? You can pm me if you prefer.

Hi,
We are in your situation and after 16 years in France wrestling with the french succession rules have just about got it covered.
I take it from your question that you have substantial assets apart from the house --and you are aware of the results of the tontine, which you accept,and that your present marriage has no children .


There are two ways to use the Quasi-Usufruit in successions of non-real estate .
1.The spouse with the children makes a will specifying that all their "biens mobiliers" go in a Quasi-Usufruit "au sens de l'article 587 du Code Civil avec pour usufruitier mon époux/épouse(as appropriate) et en nus-proprietaires mes enfants"--then give names ,dates and places of birth of their children.
If that spouse dies first, the surviving spouse will inherit the house outright (under tontine) and will take all the cash,investments etc. in virtual full ownership . The nature of the Quasi-Usufruit can be expanded on in the will in words like the following "la durée dudit quasi-usufruit sera viager et mon époux/épouseaura le droit de tirer les dividends et interets,de realiser les plus-values, et de vendre les titres,actions et parts de fonds ou pour encaisser les produits ou pour les re-investir,et de utiliser ou disposer de tous mes biens comme il/elle juge convenable. Il/elle devra acquitter tout impot du sur ces démarches. Pour jouir de son quasi-usufruit il/elle sera disponsé(e) de fournir caution". In order to finally benefit the children, as much as possible of the assets should be in the name of their parent, so as to pass under the quasi-usufruit and create a "creance "against the survivor's estate.
2. Another way to use the quasi-usufruit is for funds to be put into life assurance plans in the name of the spouse with the children , with the beneficiary clause written in quasi- usufruit as above; again a "creance" for the amount paid to the survivor is created for the children.
If with the passage of time the non-real-estate assets of the survivor diminish, then the creances created at the succession of the childrens' parent may well partially or wholly cover the value of the house at the succession of the surviving spouse.
I have written the above on the assumption that the children may not be co-operative. If, on the other hand they are prepared to fully co-operate with you both then there are other possible ,and better, courses you could take. If this is the case PM me.

[Bevdeforges]

Parsnips, just a question on this. How does this quai-usufruit differ from the "everything in usufruit" option under a standard donation entre époux? (For a married couple with children all from the current marriage, this would be the standard distribution of the assets.) And, is the tontine on the house counted as an early distribution of assets when time comes to settle the estate? (I've just been reading some articles on how prior gifts to the children have to be revalued to make sure no one was "privileged" - and was just wondering if a tontine would come into play here.)
Cheers,
Bev

[parsnips]

Originally Posted by Bevdeforges

Parsnips, just a question on this. How does this quai-usufruit differ from the "everything in usufruit" option under a standard donation entre époux? (For a married couple with children all from the current marriage, this would be the standard distribution of the assets.) And, is the tontine on the house counted as an early distribution of assets when time comes to settle the estate? (I've just been reading some articles on how prior gifts to the children have to be revalued to make sure no one was "privileged" - and was just wondering if a tontine would come into play here.)
Cheers,
Bev

Hi,
The tontine lies outside succession rules as no-one is deemed to own the house until the other partner(s) are dead. The fisc can challenge it if there is a discrepancy between the ages of the parties. This is unlikely where the partners are married.
The quasi-usufruit differs from the "standard" usufruit in that in the standard although cash can be spent by the usufruitier in return for a creance, any other investment assets are strictly controlled with the usufruitier only allowed to draw any interest generated. If the investments are of a type which generates gains via capital growth ( equity growth funds for example) this is very restrictive.
Under a quasi-usufruit, the usufruitier can use the investments as if he were the owner and the nu-propriétaires get a creance for the full value of all non-fixed assets. The nu-proprietaires can take court action to restrain the usufruitier only if they can demonstrate that he is irresponsibly wasting the assets.

[Nick]

Originally Posted by parsnips

Hi,
We are in your situation and after 16 years in France wrestling with the french succession rules have just about got it covered.
I take it from your question that you have substantial assets apart from the house --and you are aware of the results of the tontine, which you accept,and that your present marriage has no children .


There are two ways to use the Quasi-Usufruit in successions of non-real estate .
1.The spouse with the children makes a will specifying that all their "biens mobiliers" go in a Quasi-Usufruit "au sens de l'article 587 du Code Civil avec pour usufruitier mon époux/épouse(as appropriate) et en nus-proprietaires mes enfants"--then give names ,dates and places of birth of their children.
If that spouse dies first, the surviving spouse will inherit the house outright (under tontine) and will take all the cash,investments etc. in virtual full ownership . The nature of the Quasi-Usufruit can be expanded on in the will in words like the following "la durée dudit quasi-usufruit sera viager et mon époux/épouseaura le droit de tirer les dividends et interets,de realiser les plus-values, et de vendre les titres,actions et parts de fonds ou pour encaisser les produits ou pour les re-investir,et de utiliser ou disposer de tous mes biens comme il/elle juge convenable. Il/elle devra acquitter tout impot du sur ces démarches. Pour jouir de son quasi-usufruit il/elle sera disponsé(e) de fournir caution". In order to finally benefit the children, as much as possible of the assets should be in the name of their parent, so as to pass under the quasi-usufruit and create a "creance "against the survivor's estate.
2. Another way to use the quasi-usufruit is for funds to be put into life assurance plans in the name of the spouse with the children , with the beneficiary clause written in quasi- usufruit as above; again a "creance" for the amount paid to the survivor is created for the children.
If with the passage of time the non-real-estate assets of the survivor diminish, then the creances created at the succession of the childrens' parent may well partially or wholly cover the value of the house at the succession of the surviving spouse.
I have written the above on the assumption that the children may not be co-operative. If, on the other hand they are prepared to fully co-operate with you both then there are other possible ,and better, courses you could take. If this is the case PM me.

Thank you Parsnip, I think we can see away forward now.

[Nick]

I take it from your question that you have substantial assets apart from the house --and you are aware of the results of the tontine, which you accept,and that your present marriage has no children

Just when I think I have it covered.....................

Now I know there is no inheritance tax between married couples when one partner dies.
Can anyone explain what Tontine Tax is? I believe it has to do with the value of the property now to what we purchased it for..is that correct, could anyone explain.