WILLS AND INHERITANCE

Le testament is an important document for all those considering entering the French property market.

When you own French property the rules concerning its disposition are French. Even if a dispute about ownership or inheritance originates in the UK the law that will decide the outcome will be French.

Livret de famille

Under French law every family is required to keep a livret de famille (family booklet). A marriage opens a new livret and details of births, adoptions and deaths are added. When a couple divorce two separate copies are created and when a death occurs the livret is handed in.

It is an offence not to keep the livret up to date. Although the French issue certificates for births, marriages and deaths, it is the livret that provides the onus of proof in the law of inheritance.

Non-French residents are not required to maintain this document. However, the livret demonstrates two things:

• The French are keen on written evidence. Proving a will in France may prove difficult without a full set of family certificates, affidavits and decrees.
• There are important precedents in French civil law about the status of the family and the members of the family group. This begins to explain why rules of succession are more important than the wishes of the individual in matters of inheritance.

Rules of succession

The French are required by law to leave most of their estate to their family. Residents’ assets are dealt with under the rules of domicile, but these do not include property, which is always passed on according to French laws of succession.

Precedence is given to ascendant and descendant heirs – the héritiers reservée. The inheritance rules are:

• One child will inherit at least half the estate.
• Two children between them will inherit at least two-thirds of the estate.
• Three or more children will share at least three-quarters of the estate. Rules have recently been changed so that, within certain parameters, children do not have to be equally provided for.
• The surviving spouse (who is not a héritier reservée) will inherit half, a third, or a quarter of the estate, or a life interest in the estate which will pass to the children on his or her death.
• The remaining portion of the estate is freely disposable (quotite disponible).If there are no surviving ascendants, descendants, or spouse, the whole estate becomes freely disposable.
• The surviving spouse is entitled to continue to enjoy the marital property during his or her lifetime.

Residents have made various attempts to get round the rules of succession. One of these is to set up trusts, but they have generally not been recognised in French courts.

There is one legal way to offset some of the impact of the inheritance rules. This is to arrange the property purchase as a co-ownership with a contract clause that allows the surviving partner to inherit.

The survivor could then choose:

• To sell the property and take the net proceeds beyond the rule of French law.
• To stay in the property as sole owner. If this happens the estate of the survivor will become subject to the normal rules of domicile and succession.

A French lawyer can draw up a contract of co-ownership, although he would be surprised if he was asked to perform this service for a married couple. Married couples normally arrange for an en tontine clause to be incorporated within the deeds at the time of purchase. En tontine was originally intended to avoid the break up of large (generally agricultural) estates. Traditionally it meant that those who would ordinarily have rights under the rules of succession are bypassed in favour of the surviving owner, or the last surviving héritier reservée. A similar arrangement was outlawed in the UK more than a century ago because it led, quite literally, to murder.

En tontine in France is now invariably restricted to married couples. When the first partner dies the survivor becomes the absolute owner of the property. Typically the form is:

‘. . . that it is expressly agreed between the purchasers that the first to die will be deemed never to have had any right to the property . . . and the said property will be deemed to always have been that of the survivor.

‘Until the death of the first purchaser each purchaser shall be a joint owner. Neither of them can sell the property purchased, and any act of management or of disposal must take place with the unanimous consent of the purchasers. The purchasers declare that they have taken into account the chancy nature of this arrangement in determining the share of purchase price payable by each of them.’

An en tontine clause is probably right for married couples if neither partner has children by previous marriages. This is because en tontine can be challenged by children on the grounds that the clause deprives them of their rights under France’s succession rules.

Under the en tontine clause the second (surviving) partner has to pay French succession tax at the rate of 60% of one half of the value of the property. But although neither en tontine nor co-ownership avoid succession duties they generally delay their imposition and may also help to ensure that the property is disposed of according to the owner’s wishes.

The will as a document

Three kinds of will are provable under French law:

• The testament olographe is handwritten, signed and dated by the testator. Any written addition, including the signature of a witness invalidates it.
• The testament authentique is dictated by the testator and witnessed by two notaires, or one notaire and two adult witnesses.
• The testament mystique is a handwritten or typescript document signed by the testator and sealed in an envelope in the presence of two witnesses. The witnesses then hand the envelope to a notaire who signs the sealed envelope himself. He dates it, notes the names of the witnesses and adds a written declaration that he understands the envelope to contain the will of a named testator.

Rules for validating wills in France are very strict. The more complex the document and the greater the number of witnesses, the more likely it is to become void.

The rules for proving a will in the UK are as different as the kind of document that is acceptable. Rules on intestacy are also different. In France the whole of the property would be divided according to the laws of succession, which favour children. In the UK the law favours the surviving spouse. It is always worth noting that in France marriage does not automatically revoke an existing will.

Intestacy profits nobody but the lawyers, and this is doubly true for double intestacy. The importance of taking good advice when property and assets are held in more than one country cannot be over stressed.

Executors

Under UK law an executor is technically the owner of the testator’s assets and property. He discharges the responsibility of ownership by paying debts and duties and distributing the residue estate in accordance with the testator’s wishes, as indicated in the will.

In France the position is different. Property is deemed to pass directly to heirs under the rules of succession and an executor is not necessary. Debts and duties are the responsibility of the heirs, but an executeur testamentaire may be appointed to help supervise other aspects of the process of inheritance.

This service is important if specific items of furniture and jewellery are intended to pass to named beneficiaries within that part of the estate which is freely disposable (quotite disponible).A notaire can be appointed to carry out this service but any adult can be asked by the testator to accept the responsibility. The executeur testamentaire must be named in the will and should not be one of the major beneficiaries.

MARRIAGE CONTRACTS

The French have a choice as to how assets are held by a married couple. The choice made is recorded as a contract which is drawn up by a notaire before the wedding. If no such contract is agreed the law assumes the married couple are subject to the régime de communaute reduite aux acquets. Briefly this means that assets belonging to each of the married couple at the time of the marriage remain their personal property but assets later acquired together would be equally divided in the event of divorce. This is by far the most common form of written or implied contract. The alternatives are:

• Régime de la séperation des biens. This is broadly similar to the legal position in the UK. In effect husband and wife each retain their own assets.
• Régime de la participation aux acquets. Here the husband places limitations on the sharing of assets.
• Régime de la communaute universelle. All assets are shared regardless of who brought them to the marriage.