Estate planning in France

Donation

A donation is a legal act that allows for the transfer of all or part of one’s assets to one or more beneficiaries while still alive. There are two types of donations: the donation-partage and the simple donation.

The donation-partage allows for the equitable distribution of one’s assets among their heirs, while avoiding potential conflicts that could arise during the subsequent division of the succession. The donation-partage also allows for certain tax advantages, including a 100,000 euros exemption per parent and per child every 15 years.

The simple donation allows for the transfer of a specific property to a beneficiary. This type of donation is often used to transfer a secondary residence or a sum of money.

Donation sharing

The concept of donation sharing involves a business owner distributing all or part of their assets during their lifetime to:

Their direct heirs (children or grandchildren when their parent is deceased),
Third parties (collateral, grandchildren and non-relatives).
In return, donation rights are reduced. This applies also in the case of a simple donation to a single child.

It’s a way for the business owner to transfer all or part of their assets in advance to the presumptive heirs.

Shared donation with usufruct reservation:
The business owner can decide to only give away the bare ownership of their business, keeping the usufruct (right to use the property). Rights are then collected only on the value of the bare ownership, determined according to a tax scale based on the age of the donor.

Upon the donor’s death, the usufruct ends and the recipient becomes the full owner without having to pay any additional rights. The use of donation sharing with usufruct reservation can significantly reduce the cost of a transfer.

 

Will

A will is a legal act that allows one to determine how their assets will be distributed after their death. It can be written alone or with the help of a notary. There are two types of wills: the holographic will and the authentic will.

The holographic will is a document written by hand and signed by the testator. It must be dated and signed at the end of the text. It is not necessary to have it registered with a notary.

The authentic will is a document written by a notary in the presence of the testator and two witnesses. It is registered in a special registry kept by the notary. This type of will is more secure than the holographic will because it is difficult to contest.

 

Life Insurance

Life insurance is a contract that allows for the designation of a beneficiary who will receive a sum of money upon the policyholder’s death. This sum is exempt from inheritance tax up to a certain amount (152,500 euros in 2021).

Life insurance, considered as a tool for estate transmission, offers an undeniable advantage over donations and wills. Indeed, the capital paid to the beneficiary(ies) of your contract upon your death will not be part of your estate. In other words, it will not be taken into account to determine the wealth to be shared among your heirs. It will also not be considered in calculating the share of your estate that rightfully goes to your reserved heirs (your children, your spouse…).

 

Our law firm to assist in estate planning

Estate planning is a major issue for many people in France. It involves transferring their business to their heirs or to a third party while minimizing tax risks and complying with laws and regulations in force.

Our firm specializes in estate planning in France

We assist our clients in organizing the transmission of their assets optimally, using the legal tools best suited to their personal and professional situation.

We offer our clients an in-depth analysis of their situation and objectives, in order to propose personalized and effective solutions. We work closely with our clients to ensure a secure transmission that respects legal provisions.

Our expertise covers all aspects of estate planning, from drafting wills and donations to managing life insurance and professional asset transmission.

We also help our clients minimize tax risks related to the transmission of their assets, by proposing optimal solutions for their specific situation.

Finally, our law firm offers comprehensive legal assistance to the heirs of our clients, to ensure optimal management of their assets and successful transmission in turn.

 

Conclusion

Estate planning is essential to ensure optimal transmission of one’s assets to their heirs in France. The various options for estate planning, such as donation, will, and life insurance, each offer specific advantages and disadvantages. FRELA specializes in estate planning in France and offers comprehensive and personalized expertise to help clients organize their asset transmission optimally. We work closely with our clients to offer comprehensive legal assistance, from drafting wills and donations to managing life insurance and professional asset transmission.