Inheritance law in France : Major change for you in 2015

This article offers a quick view on how it will change our habits in estate planning for foreigners living in France or owning real estate in France.

By Pierre-Alain CONIL, Bilingual French Notaire, LL.M. Boston College Law School, PhD student and notary graduate at MOREL d’ARLEUX, HUREL, BILLECOCQ, notary law firm in Paris 6th, 15, rue des Saints Pères.

Current situation : the French réserve héréditaire
Foreigners living in France or owning a property in France learn often very early that the French quality lifestyle has a downside : being submitted to the French inheritance Law and its forced heirship system.

Basically, that means that part or all of your estate will be devolved to your heirs according to French standards. To synthesise:
- if you haven’t drafted a will : your estate goes to your closest relatives, most often your wife for a life interest and your children for the remainder.
- If you have drafted a will : it will be enforced only if you do not disinherit your children and leave them at least their forced share of your estate (1/2, 1/3, 1/4, depending on how many children you have).

To put it in another way, your estate plan that uses either a will or a trust (legal instrument that is not recognized in France by the way) to transfer everything to your spouse, leaving the children to wait for his/her death, will be seen as unlawful and will not be respected.

I know for a fact how difficult this is to accept for my foreign clients.

But I have great news for you : this is about to change.

A new European regulation starting August 2015
A new European regulation about inheritance law has been passed by the European Parliament in July 4th 2012 in order to change those rules and will start producing its effect in France on August 17th, 2015.

What will it change for foreigners? In one word : everything.

One law to govern them all
Up until August 2015, one’s estate is actually divided between movable property, devolved according to the law of the decedent’s county of residence, and immovable property, subject to the law of the country where the property is located, which often leads to applying two or more inheritance laws.

But this is about to end : starting August 17th, 2015, only one law will apply for all your assets, whether movable or immovable, personal or real property : the law of your country of residence.

Needless to say, using a sole and unique law will greatly simplify how international estates are handled.

Choosing the law applicable to your estate
Another interesting change is brought by this new regulation: not only will you have only one law applicable to your estate, but you will also be able to pick it up.

Thus, if the law that is meant to apply, ie the law of your country of residence, doesn’t please you, you will be free to replace it by the law of your country of citizenship.

Therefore, if you live in France but would rather have your properties transmitted to your heirs according to you own national inheritance law, that’s now pretty easy to do : you just have to draft a will saying so.

And if you own or buy a property in France while still living in another country and want this law to apply instead of the French one, there is no need anymore to use a civil corporation (SCI Société Civile Immobilière) to transform an immovable property into movable assets (the shares of the corporation) : all you need to do is…actually nothing. The law of you country of residence will anyway be used to govern the distribution of your French property.

New estate planning solutions
To summarize, this new regulation changes everything we know about international estate planning in France. Old habits are about to be outmoded and new techniques will favourably replace them.
Isn’t it a good time to consult your notaire for advice ?

Posted October 24, 2014