THE KNOWLEDGE ASK THE EXPERT
Estate planning
Bryony Anning answers your inheritance questions
We are a British couple living in France with our children. Will the changes to French inheritance law apply to us? For many years, it has been possible for British people to elect for the law of England and Wales to apply in their wills, thereby bypassing the French forced heirship rules. However, the recent changes to French inheritance law could mean that this is no longer possible. The droit de prélèvement
compensatoire eff ectively reintroduces French forced heirship in certain circumstances. It will apply if either you or any of your children are a national or resident in an EU member state. It applies in your case because you and your children are all resident in France. In the UK, it is common to leave everything to your
spouse. However, under French forced heirship a parent is required to leave a share of their estate to their children: If they have one child – one-half Two children – two-thirds Three or more children – three-quarters If a parent has not provided
for their children, the French notaire dealing with the estate administration must contact the children to see if they wish to make a claim against the estate for their entitled share. They are not obliged to make a claim and can instead consent to the terms of your will being carried out. That said, this may not be possible if your children are under the age of 18. The new law appears to
contravene EU law – it could be challenged in coming years and potentially repealed. In
the meantime, British expats in France will continue to be impacted and will disputes are expected to increase. A cross- border solicitor will be able to advise on your options.
We have been told that we own our French home ‘en tontine’ – what does this mean? There are a number of ways in which you can jointly own property in France. The most common ownership structures are ‘indivision’ and ‘tontine’. A property purchased en
tontine is held jointly during the owners’ lifetime. However, on the death of one co-owner, the surviving co-owner is deemed to have owned the whole of the property from the outset. It is a sort of legal fi ction! By contrast, a property
purchased en indivision is owned in distinct shares. On the death of one co-owner, their share forms part of their estate and will pass in accordance with their will or, if they don’t have a will, the intestacy rules. Owning a French property in
tontine is comparable to owning a UK property as joint tenants. Purchasing en tontine can be
a useful estate planning tool for British people buying properties in France who wish to ensure that the property passes to their surviving spouse. For
“The 'droit de prélèvement compensatoire' eff ectively reintroduces French forced heirship in certain circumstances”
this reason, they are expected to increase in popularity following the changes to French inheritance law. That said, a tontine can be defeated in limited circumstances. It can be diffi cult to set
aside a tontine. This can be problematic if there is a dispute between the owners – for example, if a marriage breaks down. In order to sell the property, both owners must agree to formally revoke the tontine and be party to the subsequent sale, which requires the involvement of a French notaire.
My husband and I are getting divorced in England but have a holiday home in France. How will this be treated by the English divorce courts? When considering the division of fi nances on divorce in England and Wales, the court will have regard to all assets held by both parties, whether held in England and Wales or abroad. A French holiday home is regarded as a fi nancial resource which is available to both parties and will therefore be part of the asset pot which is available for distribution. Consideration will need to be given as to whether the property should be sold or transferred to one of the parties. The tax consequences of a sale or transfer will also need to be considered. We would always encourage
a separating couple to agree on how assets are to be divided on divorce. An agreement may be reached for the sale or transfer of the property. If one party is to retain it, the value can then be off set against other assets. Any agreement reached can be incorporated into a consent order to be approved by the court within divorce proceedings. While it is possible for an
English court order to be enforced in France, this can be a complex process and it is important to seek specialist legal advice regarding any foreign property on divorce. ■
Bryony Anning is a solicitor in the cross-border team at Stone King LLP Tel: 01225 324493
stoneking.co.uk
90 FRENCH PROPERTY NEWS: May/June 2024
© SHUTTERSTOCK
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