Power of attorney at the notary: how to sign online? This leaves 75% with your husband. If the man dies first his mistress gets to keep the house, is she dies first he gets the house back and her family cannot claim it!! They bought this property jointly (50% each) and moved all their assets to France. Since 2001, the surviving spouse is treated as a genuine heir except, of course, if there has been a divorce or legal separation. As it's 8pm now here in Australiaand I've had a couple of glasses of red this might not all make sence, my apologies. Because Bea and Barry live in France their estate planning will be affected by the changes to Article 913 of the Civil Code. When I read that the lawyers in some cases can not agree on a point of law, or say it is "open to interpretaion".well! There is nothing we would like more than to be able to "arrange our affairs so that our children are provided for" Again I was hoping that someone might have suggestions as to how to do this rather than simple make the point that, it is what we should be doing. They may decide it is appropriate for each to leave some of their assets directly to their own child, or they may decide a French ownership structure such as an usufruit is appropriate, to try and reduce the French inheritance tax. We have opted for the Clause Tontine but the step parent MUST make a will passing all to his/her step child otherwise French law will only see the step child as a 'stranger' and the estate goes to the nearest natural beneficarie eg a Mum or dad etc. At that point she will inherit everything minus 60% tax. This website is using a security service to protect itself from online attacks. All their children are British and live in the UK. If you are a British national owning property in France this new law could change the effectiveness of your French will, if you have elected for British law to apply in your will. Please, if some of you have dealt with this law and can advise us what to do we would be extremely grateful. Or adopting a French person, still worth looking at. We can therefore expect a period of delay and uncertainty which is likely going to be difficult for families. I don't think you should let this stop you coming to France, whilst it seems distasteful letting the government get 60% tax, hopefully your daughter will not be relying soley on this. The surviving spouse receives half of his property, and in-laws the other half as one quarter for each. However, the couple have heard that doing this might be very tax inefficient. I could be completley wrong, so it will be interesting to hear other peoples views. The closer the relationship, the greater the tax free allowance and the lower the rate of tax that is paid. There is some good written information on this that most Notaires have in their possession. Although the EU succession regulation gives foreign nationals the option to avoid French succession law, it does not change the inheritance taxation position in France. The differences between usufruct and full ownership are important, but once again there is no right or wrong solutions. Both their children can make a claim on the first death of Bea and Barry as neither receive anything at this time, and the older son can also make a claim on the second death as only the younger son is included in the will. My advice: open a bottle of good red, don't rush, research as best you can, open another bottle of good red, sift through the good and the bad, and generally go with the flow. Hope this has helped. Thank you Anne, Hi, and thank you so much to the people who took the time to reply. Thanks. I will say "thanks" but "No Thanks". If Barry then leaves all their assets equally to his child and to Beths child, the children will be taxed as follows: Barrys child 100,000 tax free. Historically, the surviving spouse has had something of a raw deal in French inheritance law. However my concern is what happens to our daughters inheritance after we have both died, in the event that my husband dies last. To avoid this as far as possible, Beth and Barry should obtain professional advice before making their wills. The solution is the same if the survivor himself dies before he has had time to choose. When will the law come into force and will it be challenged? The usufruct belonging to the spouse can be converted into a life annuity, if he wishes or if an heir may so request.. Having read as much as I have on it over the past couple of weeks, I guess I am not prepared to take the risk wherebyour daughter could finish up with virtually nothing. Each case is specific. Some people known as reserved heirs (children and parents) will limit the latters rights. We have stepchildren, we changed our marriage regime to that of Communaute Universelle, similar to the Tontine clause but leaves no tax to pay for the surviving spouse. If you buy with a tontine as suggested this won't help if you should die first, the property would go in its entirety to your husband. Otherwise, the surviving spouse retains all the benefits and owes nothing to the other heirs. This was then challenged in August, but the relevant section was not changed and the law is therefore due to come into force on 1st November 2021. We would have no worries in terms of trust in doing this, neither would there be any problems with buying in my name only, both arealternatives we talk about. Given the right advice I'm sure you'll find a solution (although some inheritance tax wil almost certainly have to be paid). the rents are payable through inheritance, i.e. Just on a lighter note and reading the last posting again. Most importantly it depends on how solid your relationship/trust is. You can email the site owner to let them know you were blocked. For the past 2 weeks or more since I have really started to look into it, life has revolved around, wills, inheritance, who might go first, etc, etc. Given the number of people moving to France and a big percentage of them in second marriages with stepchildren. The reply I have from the UK lawyers states very clearly, that under all circumstances a step child will always pay a flat 60% tax on world wide assets. Talk to a Notaire about the Tontine de Dernier Vivant.This gives the surviving spouse control over the property during his/her lifetime. 188.165.239.102 "A stepchild is subject to a flat 60% tax on all inheritance"I just cannot believe that there is not some way around this. There is no threshold as there is with a blood relative. It should be noted: the rules set out above are only valid in the absence of a will, which is made by the deceased person. Assets do not automatically pass in accordance with your will. With regard to inheritance from a parent living in England. I would not in fact be adopting my own child, but my husband would be adopting his step-daughter, unfortunatly too late for us to do this. We have recently purchased our house ready to move out permanately in several weeks. No matter which way I look atit I find the tone more than a little condescending. She has one child of her own and three step children. Indeed there may be a period when you are no longer there and not yet here, this is referred to as a 'taxplanningopportunity' by the experts. Our Notaire was impressed with the scheme and amazed at my trust.I'm not looking for an old camper van yet. Hopefully it will be many years off yet, as she is only 9 at the moment. As explained in our previous article, because Beth and Barry are English, they can elect for English law to apply to the succession of their property in France. At the end of July 2021, a bill was passed in France making changes to Article 913 of the Civil Code. If a will has been drawn up, you need to consult a notary to find out the share of proceeds for the surviving spouse. Also I have consultedtwo lawyer in the UK both dealing in French law,albeit only by email. We spoke to the Notaire about the possibility of adopting each others children which, I believe can be done therefore making the step kids in effect 'bloodline'. If he dies, it goes to your daughter and if he sells it ,your daughter has first call on the money. the latter gets either the usufruct of all the deceaseds entire property (which means the right to '' use the assets or receive the income), namely ownership of the quarter, depending on his/her choice. Thank you for the replies to my question. In this (most likely) case, if you die first your half is divided equally between your husband and your daughter. This has been confirmed to me by a firm of lawyers in the UK (we are in Australia) My question is, are the thousands of people that this effects unconcerned about it, unaware of it, or hopefully aware of it and know a way to get around it? By contrast, if you own property in France, but neither you nor your children live in the EU, this change to French law will not apply to you. Having just read all that is involved in setting up a company to buy property and all the pitfalls associated with it, again refer to the "frenchentre" site which I mentioned at the beginning of this posting. In 2015 the European Succession Regulation (650/2012) came into force. I say go for it, you will sort something out, the main concern (I think) is that you and you spouse are provided for. French laws are very complicated and I am in the same boat as you virtually. At times he shall inherit alone, sometimes he shall be in competition with the children of the deceased or members of his in-laws. This means that a British couple, most closely associated with England, can choose British (English) law to apply to their French will. The effect of this is that they can leave their French home to one another, and then to their children on the second death, if they wish. Hi. It is also highly likely that this law will be challenged on a European level as it appears to directly contradict the terms of the EU Succession Regulation. Thank you for taking the time to reply.If you look back at my original posting you will see that I mention adopting the child is an option and would work for a lot of people, but not for us as a stipulation here in Australiais that the child cannot have been married. gastines. It is dependant on whether it is the step parent that the child inherits from or the natural parent.This will not only apply if you both die, but on the death of either of you and again on the last parentsdeath. Following a health scare they decided to make wills. Their wills are still valid and they do not need to take further action at this time. Or they can simply by-pass their children completely and leave their property to another family member or a charity. Their answer was the same. A step-child is classed as an unrelated beneficiary. All the children are British and live in the UK, except for Claires biological child who is living in Portugal. In France the general position, for both French nationals and foreigners, for many years was that it was not possible to leave your assets freely in your will when you died. They live in the Dordogne. "A stepchild is subject to a flat 60% tax on all inheritance" I just cannot believe that there is not some way around this. the heirs. Essentially, to satisfy French inheritance law you need an arrangement that is satisfactory under the French legal system; Australian stipulations would, it seems to me, be pretty irrelevant as long a the French were happy. Sorry, this is a bit of a morbid subject, but it would be very helpful to get advice from anyone in a similar situation. www.frencentre.com/fe-legal Once on the site scroll down left hand side to heading "documents on French property tax and law in France" under this in red click on "French Inheritance and tax planning" pages 1-13 deal with all aspects. From 1 November 2021, a new French law has come into effect which could well upend the estate planning of many individuals with assets located in France. This new law comes into force on 1 November 2021 and will apply to deaths after this date. I still believe there must be some way around this, otherwise there are going to be a lot of very angry people in the future. Over a 12-part series of articles Charlotte will cover topics such as how to buy your property as a couple (jointly or not), the different legal implications for a married couple and a civil partnership, and what happens to the property on your death, including who it will pass to and what succession tax consequences there might be. Bea and Barry are a British married couple. As I have taken advise from twofirms of lawyers and still do not have the answers, maybe you, or someone on the Forum has, and would be kind enough to sharethem, not just with me, but with the many people who have emailed me (my email address was posted with the letter on another Forum)who are also worried and confused as to what they can do. The heirs and the order of inheritance If the deceased didn't write a will: the transmission of the inheritance is carried out, according to the order of the heirs set by law. You may (for example) be able to adopt your own child- however silly that may sound - in France. You can then leave the shares in that company to anyone you like. Make sure you've protected yourself and your assets against every eventuality with our guide to planning wills and estates in France. However, any challenge and its outcome could take several years to be concluded. French Inheritance Laws - Rights of the Surviving Spouse. How Does French Inheritance Law Treat Blended Families. The new section of law contains the following: When the deceased, or at least one his children, is, at the time of death, a national of a Member state of the European Union or has his/her habitual residence there, and when the foreign succession law does not know a mechanism with a reserved portion protecting the children, each child (or his/her heirs, or those who benefit from his/her rights) can use the assets which are located in France to obtain a compensation at the time of death, in order to benefit from the forced heirship rights which they have under French law, within the limits of these rights.. Which means once you are resident in France andyou live a frugal and egalitarian life here,your actual net worth on expiration might well bewithin the less than generousallowances permitted. There is also,the important point that you have choices before you arrive in France. They have been married for 20 years and each have a child from a previous marriage but have no children together. English and Welsh law does not contain a mechanism that reserves part of a persons estate for their children. At times he shall inherit alone, sometimes he shall be in competition with the children of the deceased or members of his in-laws. If that was not your intention I apologise. Thank you all once again for the advise and suggestions. My Husband and I had every intention of moving permanently to France. So, if the above criteria apply, and you have made a will covering your French assets which doesnt leave your children a gift equal to the amount that they can inherit under the French forced heirship rules, following your death your children can request that the notaire makes an adjustment to the amount that they receive. Good luck! A sign seen on more touring vans now is"Spending the childrens inheritance" it should say," Spending it before the Government waste it.!! In their wills, which have a British law election, they leave all their worldwide assets to each other on the first death, and equally to the four children on the second death. Perhaps it's time that Brussels looked into this extremely discrimatory law and stopped worrying about silly things like how much meat the British use in their sausages!. If the person doesnt choose the option in writing within three months of the heir 's request, the surviving spouse will be deemed to have opted for the usufruct. Our property was purchased with the "tontine" clause. The younger son has suffered from poor health for many years and is in a financially precarious situation. Tags: French IHT, french inheritance . Regards.35. Basically, its too late for us for what a lot seem to think is the best option but could be good for you and that is the Haig Convention, but you do need to set this up BEFORE coming to live here. But perhaps they have the same laws. If the surviving spouse is a tenant of this accommodation, the rents are payable through inheritance, i.e. This used to be standard practicesince French succession requirementsgenerally invalidated any wills elsewhere. But this does not mean that the surviving spouse shall always inherit everything. Because both Amy and Andrew, and all their children live in the UK and are British, the changes to Article 913 do not apply to them. Consult the law dated 3rd December 2001 concerning the rights of the surviving spouse. The best thing to do is to form a French company specifically for house purchase - an S.C.I. But if you set up your own company doesn't that mean that you will automatically have to start paying earnings tax? Regards Anne. Claire is a British national living in Bath. Anything they inherit over this amount will be taxed on a sliding scale between 5% and 45%. So if you do any work on the house, you should open a bank account in the name of the company, have all invoices made out in the name of the company and pay with a company cheque. They have two sons. APRIL International - Health insurance made easy, Building Services, Sandblasting & Plant Hire, Controle Technique, Vehicle Testing (MOT), PC, Mac & Computer Shops, Sales & Repairs, Gyms, Personal Trainers & Fitness Classes, Solar, Wind, Renewable Energy & Resources, Holiday Cottages and Gites: Agencies and Marketing, To avoid inheritance problems, one method is to set up your own company and use the company to buythe property. As many families these days, we are a second marriage couple with a step-child involved. Anne, as Jill says, your best option still remains to set up your own company, in France, Australia, Britain or wherever. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Anything over that tax free allowance (subject to exemptions and allowances) is taxed at the flat rate of 40%. Children are protected heirs, inheriting up to 75% of your estate. Moreover, the law gives preference to the surviving spouse for the relinquishment of housing and furniture within the latter, when the estate is divided. Thanking anyone that takes the time to reply. In the UK, each individuals estate has an inheritance tax free allowance on death, which is currently 325,000. You can still make a will electing for English law to apply to the succession of your estate and your children will not be able to claim compensation using Article 913. At the end of July 2021, a bill was passed in France making changes to Article 913 of the Civil Code. Which was why I suggested your husband may be able to adopt his step-daughter in France, as the regulations may be different. If Barry then leaves all their assets equally to his child and to Beth's child, the children will be taxed as follows: Barry's child 100,000 tax free. This law allows people to elect for the law of their nationality to apply to their will in France. They moved to Annecy in France eight years ago following their retirement. In France if you have children, broadly speaking, on your death you must leave a proportion of your assets to your children you cannot leave all your assets to your spouse and you can not disinherit a child even if you have been estranged for many years. For more information please contact Charlotte Macdonald, Dan Harris or Raquel Ugalde at Stone King LLP either by calling +44(0)1225 337599, or by emailing: [emailprotected], Share to: Facebook Twitter LinkedIn Email, Your email address will not be published. Purchased our house ready to move out permanately in several weeks the greater the tax free allowance the! 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