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Wills and probate
What rules and restrictions (if any) govern the disposition of and succession to an individual’s property and assets in your jurisdiction?
A person cannot give away a certain portion of his or her property by either inter vivos or testamentary transfer. A specified minimum proportion of his or her assets must pass to his or her relatives as follows:
- If the deceased is survived by one child, the portion reserved must equal half of the estate.
- If the deceased is survived by two children, the portion reserved must be equal to two-thirds of the estate.
- If the deceased is survived by three or more children, the portion reserved must be equal to three-quarters of the estate.
- If the deceased is survived by a spouse, the portion reserved is equal to one-quarter of the estate and is provided only if there is no descendant and no divorce has been announced.
What rules and procedures govern intestacy?
As of August 17 2015, succession to an intestate’s movable and immovable property is governed by the law of the state in which the deceased has his or her habitual residence at the time of death.
When the deceased has organised no succession, the heirs and their rights can be determined only by law. In the event that the deceased was not married, his or her estate would go to any surviving:
- parents; or
- heirs of the maternal and paternal family.
In the presence of a widow, the estate would be divided between the surviving spouse and children or between the spouse and the parents of the deceased if they are still alive.
What rules and restrictions (if any) apply to the governing law of a will?
For deaths occurring after August 16 2015, new conflict-of-law rules apply for EU countries (excluding Denmark) and concern all residents of the European Union, regardless of nationality.
The applicable succession law will be the law of the last habitual residence of the deceased and will classify real estate as movable assets. However, the deceased may choose, by will, to designate his or her national law as the applicable law.
What are the formal and procedural requirements to make a will? Are wills and other estate documents publicly available?
A will can be authentic, mystic or holographic depending on who writes the will and if it has been signed in the presence of witnesses and a notary.
The testator should give the original will to a French notary in order for it to be kept and registered at the Last Will and Testament's Registrar. This formality is not a condition of validity of the will, but guarantees that the will can be found and used later by any notary who may be instructed to deal with the estate.
Validity and amendment
How can the validity of a will be challenged? Can the will be amended after the decedent’s death?
A will can be changed or revoked by the testator at any time and the notary need not advise the beneficiaries of any alterations or revocation.
Heirs can challenge a will if, for example, the forced heirship rights have not been respected. However, only reserved heirs can bring a court action within five years of the opening succession to challenge gifts made by the deceased during his or her life that infringe heirship rules.
How is the validity of a will established in your jurisdiction?
In order to qualify to make a will, a person must:
- be at least 18 years of age;
- have legal ownership over the possessions bequeathed; and
- be judged to be sound of mind.
To what extent are foreign wills recognised? Do any special rules and procedures apply to establishing their validity in your jurisdiction?
French law recognises a will that has been prepared in another country provided that it is valid in that country. Individuals who have a will drawn up by solicitors from a foreign country should ensure that it complies with French law and that the two wills do not overlap or revoke each other.
What rules and procedures govern:
(a) The appointment of estate administrators?
The ownership of French assets vests directly in the beneficiaries so there is no exact equivalent to an executor or administrator in France. Therefore, it is up to the beneficiaries to deal with the administration of an estate. It is common for a French notary to be appointed to deal with the administration of an estate on behalf of the beneficiaries.
The testator may appoint one or more representatives whose duty is to administer the totality or part of the estate for the benefit of one or several heirs.
The heirs may agree to convey the settlement of the succession either to one of them or to a third person under the condition that all heirs have accepted the succession purely and simply.
A judicial mandate can be concluded if one of the heirs has accepted the succession only to the extent of the net assets.
The testator may appoint one or more executors whose mission is solely to ensure the execution of the testator’s last will.
(b) Consolidation and administration of the estate?
Succession begins after the deceased’s death and the heir is thus vested with the inheritance from this time. No common law estate administration is required in France and there is no grant of probate.
The notary first interrogates the Central File of Last Will and Testaments to check whether there is a will or gift between spouses. An inventory is prepared by the notary alone or with the help of an auctioneer.
(c) Distribution of the estate to heirs?
The notary usually drafts an inheritance deed. This document sets out:
- the terms of the will;
- the identity of the deceased’s heirs;
- details of all the beneficiaries; and
- how the estate will be divided between them.
Distribution of an estate to the heirs depends on whether the deceased died intestate or left a will.
When the legal heirs are vested, they are in indivision which is a form of ownership which resembles tenancy in common.
(d) Settlement of the decedent’s debts and payment of any taxes and fees?
The heir must make a choice within four months after the opening of the succession.
If the succession is accepted purely and simply, the heir is liable for the deceased’s debts, which may be enforced against the heir’s own assets.
If the heir accepts the succession and the amount of the net assets, he or she must file a declaration with the court of first instance of the district where the succession is opened. He or she thus limits his or her liability for debts to the extent of the net assets.
Are there any special considerations specific to your jurisdiction that individuals should bear in mind during succession planning?
Granting a gift to a spouse, a child or any other person is a common estate planning technique.
Life insurance falls outside the scope of French succession laws. Consequently, the use of life insurance could mitigate the application of the strict French forced heirship rules, under certain limits.
Death benefits paid by an insurance company may be partially taxable in application of specific tax rules. Only policies taken out before November 21 1991 and those with premiums paid before October 13 1998 give entitlement to full exemption for death benefits.
Split of ownership strategy
The temporary split of ownership offers, on the one hand, the right to use and benefit from the income of an asset (usufruct) and, on the other hand, the right to dispose of such an asset (bare-ownership). This division makes it possible to reduce the effect of taxation on the transfer of assets as the taxable value of the bare-ownership is discounted depending on the age of the usufruct owner. Following the death of the usufructuary, the usufruct ends and the bare ownership of the property is reconstituted in the hands of the children, tax free.
The transfer of businesses or shares in companies is eligible for a partial tax exemption when the asset is transferred in the form of a gift or as an inheritance. The exemption applies to 75% of the value of the shares or the business.
The shares must be the subject of a joint and individual undertaking by shareholders.
Capacity and power of attorney
Loss of capacity
What rules, restrictions and procedures govern the management of an individual’s affairs where he or she loses capacity and the grant of power of attorney in such cases?
When an individual loses capacity, a judge may order that a protective measure be put in place. The four options available with varying degrees of restrictiveness are:
- judicial protection;
- guardianship; and
- family empowerment.
What rules, restrictions and procedures govern the holding and management of a minor’s assets until the minor reaches the age of capacity?
The age of capacity is fixed at 18 years in France. Both parents are associated jointly in the management of a minor’s property. If neither father nor mother remains in a position of authority (eg, following death or withdrawal of authority), then a guardianship must be created.
Parents are provided with the legal administration of their children which consists of representing them in civil acts. As a general rule, a legal administrator can perform acts of administration but, for acts of disposal, the parents must perform together. However, for a limited number of acts of disposal, the parents must first obtain permission from the guardianship authority.
Parents also enjoy the right of legal enjoyment (ie, a legal usufruct permitting them to receive and use the income of minor children who are not emancipated).
The statutory administrator of a non-emancipated minor may accept a gift that imposes no obligation and fulfill reporting obligations and pay gift tax.
In France, minors have no capacity to manage their assets. As a result, when a minor becomes an heir in a succession, he or she cannot accept or renounce the succession. Therefore, a board of guardians and family members may need to be convened or consultation or authorisation sought from the guardianship judge.
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