Help with French inheritance laws

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Help with French inheritance laws


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Old 30th December 2010, 01:55 AM
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Default Help with French inheritance laws

My husband and I bought a vacation house in France last year. I'm afraid it's recorded "en indivision". Husband has adult children from previous marriage (not in good terms) and we have one child together (minor). Could you give us advise how to get out of this mess? I believe we are too late to record it "en tontine". So, what can we do so in the event of husband's death I don't share control over the property with his children? Thank you.

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Old 30th December 2010, 07:44 AM
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Unfortunately, you have very limited options when it comes to property ownership in France - and those are generally based on your "marital contract" (or the French presumption of what your marital contract is, based on where you were married and when). Unless you have what's called a "separation de biens" contract, any property (like a house) was pretty much going to wind up "en indivision" if acquired in the usual way.

Parsnips is the forum advocate of tontines and should be able to shed some light on what your options are there.

You may also want to consider converting the house into an SCI (a sort of "corporation"), which gives you somewhat more flexibility in assigning the ownership interests and would give you the option to buy out the shares of your husband's children. (It would be possible to take out a life insurance policy to cover the cost of the buy-out.) You would have to check with a notaire, but it might be possible to set up the SCI to mandate the buyout of the deceased partner's shares rather than allowing them to pass to the heirs automatically.
Cheers,
Bev

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Old 30th December 2010, 11:22 AM
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My husband and I bought a vacation house in France last year. I'm afraid it's recorded "en indivision". Husband has adult children from previous marriage (not in good terms) and we have one child together (minor). Could you give us advise how to get out of this mess? I believe we are too late to record it "en tontine". So, what can we do so in the event of husband's death I don't share control over the property with his children? Thank you.
Hi,
I'm afraid you are correct, it is too late for a tontine. There are several possible solutions, none of which guarantees total control but will ensure undisturbed occupation for your child and yourself during your lifetime;
Your husband can make a french will leaving the quotité disponible of his french estate to you (the size of this depends on the total number of his children), on his death you would have ,in addition to your 1/2 , at least another 1/4 of his 1/2, and your mutual child would have a part (depending on the total number of children).
He should also leave you the "usufruit" or life interest in the balance of the french estate. You and your child would then own over 5/8 of the house with a life- interest (secure from interference by his other children)in the rest.
The only problem could arise if you wished to sell the property-as you would need to have the agreement of his children you would probably have to pay them the value of their parts. As your life-interest has a value which would be deducted from their parts the amount to be paid to them would be further reduced.
This is the cheapest option.

You could discuss with a notaire the possibility of adopting the french marriage regime of "communauté universelle"(for your french estate only) but this
would be expensive , and as the notaire should explain, leaves his children with the option of taking legal action to reduce your share back to that set out above.
Only you can judge whether his children would be inclined, or capable of doing so, and indeed whether their gains would be worth the expense of legal action.

Your husband could give you his part of the house as a "donation", but this would also have a cost in fees and taxes (although free of gift tax upto a value of 79 533€). This could also ,in theory, be challenged at his succession,but to me that seems unlikely , unless the house is very valuable.

You need to find a good english-fluent notaire to discuss your options. Take a copy of this thread with you as an aide -memoire.

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Old 30th December 2010, 04:29 PM
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Thank you very much for your excellent and very clear response.

My husband's children have not talk to him in 20 years, so they don't know about the house in France. It appears that your suggestion of adopting the french marriage regime is the simplest. Perhaps we could insert a special clause (clause d'attribution intégrale au conjoint survivant) which allows all the assets to pass on the first death to the surviving spouse. I doubt his children will contest it in a French court.

But, just to be clear, if the above regime adoption is done and later my husband dies, will I be able to sell the house having a minor child? In other words, will I have 100% control over the property?

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Old 30th December 2010, 05:10 PM
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Originally Posted by ACL View Post
Thank you very much for your excellent and very clear response.

My husband's children have not talk to him in 20 years, so they don't know about the house in France. It appears that your suggestion of adopting the french marriage regime is the simplest. Perhaps we could insert a special clause (clause d'attribution intégrale au conjoint survivant) which allows all the assets to pass on the first death to the surviving spouse. I doubt his children will contest it in a French court.

But, just to be clear, if the above regime adoption is done and later my husband dies, will I be able to sell the house having a minor child? In other words, will I have 100% control over the property?
Hi,
Be guided by the notaire in this, I believe that notaires can change you to this regime (yes you should include an "attribution integrale ") without notifying children , but they have to make clear to you the possibility of possible future action to overthrow the regime change. This option can be quite expensive when taken after the house purchase.You would have full control as your child would have no rights in the house (until your death).
Another possibility has occurred to me, which you should discuss with the notaire--the "legs residuel". In this your husband makes a will in a prescribed form and leaves the house to you as first beneficiary, and to your mutual child (strictly speaking it should be to all his children-but see what the notaire says) as second beneficiary. On your husbands death you inherit the house in full and have the right to sell it (but not give it away or bequeath it). If you sell, the secondary beneficiaries have no claim on the proceeds. This might be cheaper than the marriage change and achieves the same outcome;both being equally subject to (unlikely) action by the husband's children.

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Old 30th December 2010, 05:40 PM
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Thank you for your response. I emailed the notaire who handled the purchase with the 2 options (regime adoption and donation or gift) He responded that my husband should donate his part to me; there won't be any gift tax due since the amount is under the exemption; then, I'd be the sole owner. He did not comment on the regime adoption. The notaire doesn't speak English (I use Google translator to communicate) so I want to make sure the donation is the way to go. What do you think?

Also, in the event I die first, what rights will my husband have (if I was the sole owner) with a common child, and my mother alive? I also have a sister.

Regarding your suggestion of a will with "legs residuel", I believe the french will allows you to control only the "disposable" part of the estate. In other words, there is portion call "legal reserve" which goes to the blood hiers (héritiers réservataires) which cannot be overwritten by a will. The rest can be determined by a will.

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Old 30th December 2010, 05:55 PM
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Hi,
If you die first , even without a will, your husband would inherit 1/4 and your child 3/4, but your husband couldinstead choose a life-interest in the whole house.Your parents have no rights to your succession.
You could make a will leaving 1/2 to your husband and a life-interest in the rest , or you could have the notaire draw up a "donation entre époux" which gives the surviving spouse a choice of how to inherit; in any case your husband can obtain the right to use and habitation of the house for his life-time. Again , be guided by the notaire.

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Old 30th December 2010, 06:51 PM
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The more I read there more confused I am, so please forgive my stubbornness.

I'm not sure my Notaire is understanding or any good for that matter. He is suggesting my husband donates his half to me now, so the property is solely on my name. What Parsnips is proposing (donation entre époux) is different and very interesting. As I understand it, everything will remain the same until the first death, at which point the donation will kick in. But, will this give the surviving spouse 100 % ownership and control over the property (to sell, rent, etc) or just the lifetime use of it? Will it still give rights to the other children upon the death of the last spouse?

Thanks!

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Old 30th December 2010, 09:29 PM
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The more I read there more confused I am, so please forgive my stubbornness.

I'm not sure my Notaire is understanding or any good for that matter. He is suggesting my husband donates his half to me now, so the property is solely on my name. What Parsnips is proposing (donation entre époux) is different and very interesting. As I understand it, everything will remain the same until the first death, at which point the donation will kick in. But, will this give the surviving spouse 100 % ownership and control over the property (to sell, rent, etc) or just the lifetime use of it? Will it still give rights to the other children upon the death of the last spouse?

Thanks!
As you're noticing, this stuff is really tricky. One principle in French inheritance law that you can't really get away from is that you CANNOT disinherit your children - even if you haven't spoken to them in 20 years.

Another principle is that donations quite literally come back to haunt you on the death of the person who donated the property. This is a weird aspect of inheritance law, that I only partly understand - but basically it means that if your husband makes a gift of his interest in the house now, on his death that interest will be reassessed when the inheritance is being worked out as if the transfer of property were taking place as part of the estate.

As Parsnips suggested, you either need to talk to a notaire who speaks English (and has some understanding of "anglo-saxon" law so they can explain things in terms that are familiar to you) or you need to visit the notary with someone who can translate for you (and again, someone with some understanding of both French and anglo-saxon law would be real useful).

I've got a donation entre epoux that gives me the rights of first option to buy out the house from my husband's kids. Under the terms of the donation, they can't refuse to sell me their interest in the house on the death of their father, and I have five years to pay them off. Something like that, coupled with a life insurance contract to provide the funds (which is NOT part of the estate) might be the surest way to assure what you want here.

Once the house is in your name, free and clear, nothing will pass to his children on your death unless you have set things up that way.

But things may be further complicated by the fact that this is a vacation home and it sounds as if you are not resident in France, so the house may be the only asset that is subject to French inheritance laws.
Cheers,
Bev

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Old 3rd January 2011, 06:31 PM
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Originally Posted by Bevdeforges View Post
As you're noticing, this stuff is really tricky. One principle in French inheritance law that you can't really get away from is that you CANNOT disinherit your children - even if you haven't spoken to them in 20 years.

Another principle is that donations quite literally come back to haunt you on the death of the person who donated the property. This is a weird aspect of inheritance law, that I only partly understand - but basically it means that if your husband makes a gift of his interest in the house now, on his death that interest will be reassessed when the inheritance is being worked out as if the transfer of property were taking place as part of the estate.

As Parsnips suggested, you either need to talk to a notaire who speaks English (and has some understanding of "anglo-saxon" law so they can explain things in terms that are familiar to you) or you need to visit the notary with someone who can translate for you (and again, someone with some understanding of both French and anglo-saxon law would be real useful).

I've got a donation entre epoux that gives me the rights of first option to buy out the house from my husband's kids. Under the terms of the donation, they can't refuse to sell me their interest in the house on the death of their father, and I have five years to pay them off. Something like that, coupled with a life insurance contract to provide the funds (which is NOT part of the estate) might be the surest way to assure what you want here.

Once the house is in your name, free and clear, nothing will pass to his children on your death unless you have set things up that way.

But things may be further complicated by the fact that this is a vacation home and it sounds as if you are not resident in France, so the house may be the only asset that is subject to French inheritance laws.
Cheers,
Bev
French Law certainly is a nightmare. English probate and inheritance tax laws seem simple by comparison.

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