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My wife and I have been lurking here for about a month. We are seriously considering retiring in France, possibly Brittany, in about 18 months. We have visited half a dozen times over the years. I have some(residual) language fluency from three years of HS French and some University- 40 years ago.

I am 62 and SWMBO is 56. The compelling reason to retire there is the medical system as SWMBO has a prexisting condition and that has now become an issue in the US.

We were really looking forward to taking the plunge until I got around to checking out the inheritance tax that the one Dear Daughter (17) would have to eventually pay. My best guess is we would be in the 30-35% range and the bill would be around $4-500K!

I understand the benefits of living one's whole life in France and paying this, but at our points in life, it just doesn't seem to make sense. Had we been able to do this a few years ago DD could have attended university and medical school in their system, but we will be stuck with that in the US.

If nothing else, we will plan to spend a lot of time in France and other places.

Are there any strategies for retiring and residing in France and minimizing the inheritance tax? Are there strategies for maximizing the living periods in France and being compliant with immigration laws?
 

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The inheritance tax in France is what it is. However, there is always the same strategy as in the US - get some sort of life insurance policy with your daughter as beneficiary that will cover the amount of the inheritance taxes. Life insurance (term or US-style whole life) does not become part of your estate in the final analysis and many families take out a policy specifically to cover the taxes.

The medical system is a little bit tricky to maneuver. You'll need private health cover for the first year you are in France, if only due to the visa requirement. See the AARO website to get an idea of the cost of a policy that meets the visa requirements. https://aaro.org/medical-insurance (It's actually not a bad deal to take an AARO membership for your first couple years in France, as they have lots of information and advice about taxes and other legalities of living in France.)

You only need 3 months of "residence" to enroll in the French system - but the paperwork can take "several" months to clear, and you'll need to find a mutuelle to cover what the national system doesn't reimburse (particularly eyeglasses and dental care). Figure something like 75 to 200€ per month per person covered depending on your needs.
Cheers,
Bev
 

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My wife and I have been lurking here for about a month. We are seriously considering retiring in France, possibly Brittany, in about 18 months. We have visited half a dozen times over the years. I have some(residual) language fluency from three years of HS French and some University- 40 years ago.

I am 62 and SWMBO is 56. The compelling reason to retire there is the medical system as SWMBO has a prexisting condition and that has now become an issue in the US.

We were really looking forward to taking the plunge until I got around to checking out the inheritance tax that the one Dear Daughter (17) would have to eventually pay. My best guess is we would be in the 30-35% range and the bill would be around $4-500K!

I understand the benefits of living one's whole life in France and paying this, but at our points in life, it just doesn't seem to make sense. Had we been able to do this a few years ago DD could have attended university and medical school in their system, but we will be stuck with that in the US.

If nothing else, we will plan to spend a lot of time in France and other places.

Are there any strategies for retiring and residing in France and minimizing the inheritance tax? Are there strategies for maximizing the living periods in France and being compliant with immigration laws?
There's a sticky on 'Assurance Vie', which is one of the vehicles the French use to reduce, or even negate, inheritance tax. Worth a look.
 

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There's a sticky on 'Assurance Vie', which is one of the vehicles the French use to reduce, or even negate, inheritance tax. Worth a look.
Be very careful - there is a big difference between "assurance vie" and traditional life insurance. Assurance vie is a type of investment considered a "foreign trust" and for an American it will vastly complicate your US tax returns. Strict term life insurance (with no investment element - it simply pays out when you die as long as you have been making the payments) is what you want.
Cheers,
Bev
 

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Discussion Starter · #5 ·
I will have a look at that sticky. I did look a bit at assurance vie somewhere else and it seems to go about halfway...152.000 euros sheltered and then brings the rate down to 20 from 35ish. I (or DD) can live a lot more comfortably somewhere else on that kind of money rather than having it go to France eventually.
 

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Hi,
Are you sure you have calculated the possible inheritance tax correctly?

Depending on your marriage contract and wills your daughter can inherit each of your shares of the estate separately with 100k€ tax free for each parent; after that the rates are progressive , see here;
Le barème des droits de succession et de donation pour 2017 - Succession - Le Particulier
You will see there is no 35% rate ; as the article shows there is a fast way to calculate the tax (after deducting the 100k€ tax-free allowance) just multiply the net inheritance by the rate shown against the tranch into which it falls , then deduct the figure in the right-hand column which adjusts for the lower rates. Bear in mind your daughter would inherit in two stages , with full allowance and lower rates each time.
As has been said , investment in french life assurance plans (preferably inexpensive on-line contracts run by major companies like fortuneo and linxea) is an excellent way to avoid or mitigate inheritance tax bills , but for maximum benefit the assured person should invest before reaching the age of 70.
.
 

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Discussion Starter · #7 ·
Yes, I know there is no 35% rate , and there are exclusions, but it's just a SWAG. We are already well into in this bracket:

"de 902 839 € à 1 805 677 € 40 %"

... right now, and I am just collecting a small corporate pension. Still waiting to collect Social Security (I don't need the income yet) and if we sold our house here we would likely have cash left over as we would downsize (though I know most houses in France are smaller anyway).

Still trying to absorb all this, but it sure looks like a huge wad of cash my daughter won't get to use. We might just be better off spending 180 days per year in various apartments in Europe .

I don't know how political I can be here, but the current changes pending to preexisting conditions are the major concern. I would probably go anywhere we need to go to get covered , rather than hang around in the US and be worried about being medically bankrupt. So, we might get it down to 20% with some scheme, but that's a lot of money that either I or my daughter would rather spend.
 

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Let me just add one thought here. I fully understand your wanting to move to France for the health insurance. Just remember that health care here is mostly in French. Although there are "English speaking doctors" available - usually in larger towns - you're not assured by any means of having lab personnel or pharmacists or nurses (in hospital or in private practice) who speak English. It's not a deal breaker, but just another factor to consider.

We gets lots of requests for English speaking doctors and specialists here on the forum, and while most doctors will do their best to understand you and make themselves understood, there simply aren't that many available and not necessarily in all specialties. But in a medical situation, you really can't expect (m)any of the support staff to speak and understand English (think, ambulance crew, hospital orderlies, having to call in an emergency, etc.). The system is a good one, but it does count on the family and their legal obligations. Not having family in France can make things a bit more complicated.

On the inheritance/insurance side of things - you may want to consider getting a term policy (or paid up whole life) to cover the amount of the estimated inheritance tax BEFORE you leave the US. That doesn't enter into your "estate" either in the US or in France and would be available to pay the taxes. It's a commonly used strategy in both countries.
Cheers,
Bev
 
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