Print Posted By Lost in France on 16 Oct 2007 in French Property - French Property: Legal & Taxes

Protecting Your Spouse (After you're gone)

protectingOne aspect of French succession law that often horrifies British purchasers of property in France is how little protection it affords to the poor widow or widower left behind after the first death.

Children have always been well looked after, owing to the very long-held belief that property should stay with the bloodline. Therefore children cannot easily be disinherited and must be left a minimum of half, two thirds or three quarters of the deceased's estate depending on the number of children. The rights of other relatives such as parents, brothers, sisters, nephews and nieces were also put before the spouse until relatively recently.

On 3rd December 2001, a law came into force to give much improved rights to the surviving spouse. The surviving spouse's situation varies depending on whether the deceased leaves only children of the relationship with the surviving spouse or children from another relationship.

When the deceased leaves children from another relationship, the very minimum right that a spouse has is to occupy the marital home for one year after the first death. After that, the surviving spouse has an additional right to occupy it for the rest of his or her life and use the contents. However, the widow or widower can be deprived of this second right by a provision in the deceased's will. Previously, the spouse had no right to stay in the property unless he or she was a joint owner. Under the new law, the surviving spouse has a legal right to a quarter of the deceased's estate, in the absence of a will.

When there are no children from other relationships but there are children from the relationship with the deceased (produced during the marriage or otherwise), the spouse will have a legal right to choose between a quarter share of the estate (as an absolute owner) or a life interest in the whole estate. A life interest is a right to use and enjoy the property and to receive revenue from it. The spouse could therefore rent the property and move elsewhere if she or he so wished. This is obviously a more valuable right than that of occupation only, which does not give any rights to revenue such as rent.

A life interest in money, shares etc is as good as an absolute interest as the spouse can use and dispose of it as desired during his or her lifetime. Under the December 2001 law, the reserved heirs can ask for the life interest to be converted into a rent, if they wish, but only when the property concerned is not the surviving spouse's main residence. In the absence of an agreement on the amount of rent, the courts would have to decide.

Previously, when the deceased left no children but left surviving parents, the surviving spouse would only be entitled to an absolute interest in a half-share of the deceased's estate. If there was only one surviving parent the spouse would be entitled to an absolute interest in three quarters of the estate. A law which came into effect in January 2007 abolished the parents' reserve and it is now possible to leave everything to the surviving spouse, in the absence of children. The exception to this is when the property concerned belonged to the deceased's family. This might apply if a house was inherited by the deceased from his/her parents. However, it must be exactly the same property. If the inherited property was sold and another property bought with the proceeds, the aforementioned relatives would have no rights over it.

There is no longer any inheritance tax between spouses in France but does French law go far enough to protect the surviving spouse? For those used to the common law system (England, Wales, United States, Australia), it probably does not. The majority of British purchasers want to give the maximum power and protection possible to their spouses. So is there anything else that can be done to improve the situation further? There are two other methods that are worthy of mention; which is the most appropriate depends entirely on the objectives of those concerned and on their particular family circumstances. They are outlined very briefly here:

Communauté universelle

This means changing your marriage regime so that everything you own is considered the property of the marriage. The English marriage is not considered by the French to be under this kind of regime. It is therefore necessary to have a deed drawn up by a notary to apply the French marriage regime to the French property or even to your whole estate, if you are resident in France.

On the first death, all the property passes to the survivor. The passing of the property is seen, not as an inheritance, but as an advantage of marriage.

The disadvantage of this regime is that children from a previous relationship have a right to an action to recover their reserve and thus the marriage regime would be set aside if they took this action. In these circumstances, the spouse will be treated as if there had been a donation entre époux, described below. The law which came into effect in January 2007 enables children from a previous relationship to renounce their right to take action against the marriage regime arrangement during the life-time of their parent. They can then exercise the right again on the death of the stepparent. This can be a very useful solution in some situations.

Donation entre époux au dernier vivant

This means making a gift to the other spouse, which comes into effect on the first death. The whole estate could be gifted in this way. However, if there are children from the marriage or otherwise, the gift will be reduced so that the spouse does not inherit the whole estate but may instead choose one of the following options:

  • An absolute interest in that part of the estate that can be freely disposed of depending on the number of children (half, one third or one quarter).
  • An absolute interest in a quarter of the estate plus a life interest in the rest
  • A life interest in the whole estate

So even when there are children from another relationship, the surviving spouse can in this way be given some protection. By way of the donation, the spouse could use, enjoy and take revenue from the property. Under the December 2001 law, he or she has the right to occupy the principal residence. The two measures combined give reasonable protection.

When there are only children from the marriage, a change of marriage regime gives maximum protection to the spouse, as the children cannot have the regime set aside and must wait until the second death for their inheritance.

This article allows only a brief introduction to the methods available to property owners. You should seek legal advice on your own situation before making any decisions.

About the Author

The Author Susan Busby is the owner of France Legal a small practice that specialises uniquely in the legal aspects of French property matters. She has studied French law for several years and has a Masters degree in European law (specialising in French property, employment, company and contract law).
Tel/Fax: 00 44 (0)1449 736644.
E mail: [email protected]

© Susan Busby - France Legal 2007

What do you think?

Join Our Newsletter - Today