Property Ownership Options
- Adopt a French Marriage Contract
- Enter into a French Civil Partnership
- Make a Family Inheritance Pact
- Make a Will
- Create a Trust Structure
- Adopt European Succession Law
Financial Planning Options
- Buy or Improve with a Mortgage
- Make a Gift Between Man and Wife
- Make a Gift to Children/Grandchildren
- Make a Gift to Others
- Take out Life Insurance
It is possible to enter into a pre-inheritance contract, in which one or more protected heirs (children) gives up, or defers, some or all of their future inheritance in favour of another person(s).
The contract is called a pacte successoral or pacte de famille.
Such an agreement could operate in a variety of different circumstances.
In the case of a family with children from a previous relationship a child could agree to defer taking up their inheritance until the death of the surviving partner.
In such circumstances, children from both within and outside of the relationship then benefit from an inheritance as part of a more global settlement for division of the estate of the wider family.
Notable examples where it is used is where there is a disabled child in the family for whom it is necessary to make specific provision, or where one of the inheritors is to take over a family business.
It might be a way to avoid complicated multiple ownership of real estate, while the remaining child(ren) would be compensated by way of cash or other assets.
Clearly, in such circumstances there may well be limits to any equal division of the estate, particularly if it consists primarily of the main home. It will depend on family circumstances.
Even if an agreement on unequal division of assets cannot be reached, the pact is a means by which specific parts of the estate can be allocated to particular children.
In other circumstances the pact would enable grandparents who wish to favour their grand-children over their own children, which they could do through a pacte successoral.
The taxation implications of such an agreement would need to be carefully weighed, as it is likely to result in an increased liability to inheritance tax for inheritors.
As there are reasonably generous limits for inheritance tax, for most families this would not be a major problem, but you need to do your sums.
The use of this procedure is one that is irreversible, and given the severity of the consequences there is a strict process which must be adopted.
A pacte successoral can only be undertaken through the auspices of a notiare.
Indeed, given the serious nature of such a pact, it is obligatory for the child(ren) to have their own notaire, who would provide them with independent, personal advice.
However, minors are expressly not permitted to sign such an agreement. In order to enter into the pact, the children must be at least 18 years of age.
Indeed, the process requires that two notaires be engaged, one on behalf of the parents and the other acting on behalf of the children.
To further ensure complete objectivity and impartiality the notaire acting on behalf of the children must be appointed by the Président de la Chambre Départementale des Notaires, the professional and disciplinary body for notaires.
Despite the presence of two notaires and the potential complexity of the operation, the cost is surprisingly inexpensive, at around a fixed rate of €200. As no property transfer actually takes place, no stamp duty is payable.
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