Under French 'forced heirship' rules, children are protected heirs but spouses have few rights. Applying 'Brussels IV' or other estate planning tools may help avoid local succession law restrictions and help ensure your legacy passes to chosen heirs.
As we get older, many of us think more about the legacy we will leave to future generations; specifically, how and to whom our assets will pass on our death. For peace of mind, review your estate planning arrangements regularly to ensure your wishes will be fulfilled, taking account of regulatory reforms or changes in your family.
Estate planning is made more complicated for British expatriates by French succession taxes (which can be as high as 60%) and the ‘forced heirship’ succession law. Here we focus on succession law.
French Forced heirship
France’s Napoleonic code dictates how your assets must be distributed on your death. The key points are:
- For French residents, succession law applies to worldwide assets (excluding real estate outside France).
- For non-residents, French real estate is subject to the succession law rules.
- Assets do not automatically pass in accordance with your will.
- Children are protected heirs, inheriting up to 75% of your estate.
- Spouses are not automatically protected.
- There are ways of circumventing the rules, but take care to ensure they do not have unexpected consequences.
- You can use the EU succession regulations to opt for the succession law of your nationality instead of French law.
Proportions allocated under French forced heirship rules
Provided you have a will, under French law your estate is divided as follows:
| Number of children | Reserved for children | Freely disposable |
| 1 | 50% | 50% |
| 2 | 66.6% | 33.4% |
| 3 | 75% | 25% |
If there are no children (from current or previous relationships), the surviving spouse will be a protected heir and entitled to 25% in full ownership. This does not extend to PACS (civil) partners – the succession rights of PACS parties are considerably less than married couples. The rest of the estate is freely disposable according to your will, and so can also be left to your spouse.
Allocations if there is no will
If you have not made a will, it gets more complicated.
Where the children are just from this marriage, the spouse can choose between ownership of 25% of the estate or a life interest (‘usufruit’) to receive income of 100% of the estate. If the deceased has children from a previous relationship, the spouse only has the legal right to 25%.
Where there are no children, the spouse will receive half the estate in freehold, and the deceased’s parents the other half (25% each). If one or both parents have died, their share goes to the spouse.
With or without a will, provided a family home is owned solely by the couple, the surviving spouse has the right to claim to live in the property for the rest of their life.
How stepchildren are treated under French succession law
The problem many couples find in France is that if they both have children by previous marriages, then on the second death that person will not have (in Napoleonic terms) a bloodline to their ‘stepchildren’.
Unlike that person’s own children, the stepchildren will only get a small tax-free allowance and could pay 60% tax on any inheritance.
To illustrate, if Charles and Ruth each had a child from previous marriages – Charles’ daughter Jane and Ruth’s son, Alan – then if Charles died first, if Ruth then tried in good faith to leave 50% of the estate to each of Jane and Alan, Jane would suffer a much higher deduction to tax than Alan (as Jane had no bloodline to Ruth).
Careful planning is needed if you and your spouse have children by previous relationships to ensure what you wish to happen does happen, and is not usurped by the nuances of French succession law and tax.
Lifetime gifts in France
Lifetime gifts are virtually reintroduced into the deceased’s estate and the assets divided based on this virtual estate – the ‘rapport’. If one child has been advantaged more than the disposable part allows, they have to compensate the others. Note that increases in value are taken into account.
A manual gift can avoid the rapport in certain circumstances, as can a ‘donation-partage’, a lifetime to gift to all heirs which can be unequal.
Avoiding or mitigating French succession law
Applying 'Brussels IV' in France
Foreign nationals living in an EU country can use EU Regulation 650/2012 ('Brussels IV') to opt for the succession law of their country of nationality to apply on their death, instead of that of their country of residence.
So UK nationals can elect for the relevant UK succession law to apply to their whole estate. You need to do this yourself, in your will, otherwise French law automatically applies.
Note that opting for UK succession law could have the unexpected consequence of making you liable for UK inheritance tax on your worldwide assets, as well as French succession tax (with any appropriate offset). If you have set up French arrangements to reduce succession tax, this could be undone if these assets become liable to 40% UK tax. Take time to weigh up what would work better for your family.
‘Pacte de famille’ or ‘Pacte successoral’
Your family can choose to enter into a pre-inheritance contract where one or more of your children agree to give up, or defer, some or all of their inheritance in favour of other persons.
Property ownership in France
Different ways of owning property in France can impact succession law and tax, so do your homework first. For example, inserting an ‘en tontine’ clause into the conveyance ensures the property will pass to the surviving tontine holder – but this option is only available at the time of purchase.
Marriage contracts in France
Unlike in the UK, there are different types of marriage contracts in France and this can affect how assets are owned. For example:
- ‘Séparation de biens’ (separation of property) – each spouse is treated as owning the assets acquired by them personally, and owning 50% of jointly held assets (equivalent to UK ‘tenancy in common’). Most British married couples automatically fall into this regime, as do PACS partners.
- ‘Communauté réduite aux acquêts’ (community property ownership) – wealth created after marriage is considered community property (even if held in one name); assets acquired before marriage remain the property of the original owner. It is possible to change to this regime, with a clause attributing the whole marital property to the surviving spouse. Stepchildren would have the right to claim against this, however.
- Before changing your regime research the tax implications. For example, it would not avoid the 60% succession tax for stepchildren but may mean children from your current marriage end up paying more tax.
Investment capital
There are tax-efficient investment arrangements available that fall outside French succession law.
All in all, great care must be taken when setting up your estate planning in France. With complex, cross-border issues, this is a specialist area. Your estate plan must be tailored to meet your personal objectives and unique family situation.
Contact a France-based adviser
Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals are advised to seek personalised advice.