French notaire, this article explains French forced heirship rules and inheritance tax laws, as well as how to make a will and apply for probate in France.
Anybody who lives in the UK and owns property or other assets in France will know that there are many differences between the French and English legal systems, particularly when it comes to succession law and taxation.
For many families the forced heirship rules applicable in France may not have a significant impact. But where, for example, families include children from different relationships, heirship rules can lead to children being entitled to different minimum shares depending on the order of their parents' deaths.
However, with the proper planning it is possible to overcome the usual legal and language barriers in cross-border estates and ensure that French assets pass efficiently on death in accordance with the deceased's wishes.
What is the European Succession Regulation (Brussels IV)?
Cross-border estate planning for French assets has become easier under the European Succession Regulation EU/650/2012 (also known as ‘Brussels IV’) which applies to the French assets of UK persons, despite not being binding in the UK.
Under Brussels IV, a person can choose the law of their nationality to govern the succession to their whole estate. If a preference is not explicitly stated, the applicable law will be the law of the jurisdiction where the person was ‘habitually resident’ at the time of their death. The applicable governing law applies only for succession purposes and does not affect how an estate is taxed. Therefore, subject to any relevant double tax treaties, inheritance tax remains payable on any assets located in a jurisdiction in the usual way.
A British national can therefore avoid the application of French forced heirship rules to their French assets by expressly choosing English law in their will to govern the succession to their whole estate. It’s important to note that the French forced heirship rules will still apply if the choice of English law is not in the will.
Under the provisions of Brussels IV, where the law governing a succession is determined by where the deceased was last habitually resident, the law applied is the law that that jurisdiction would apply. English private international law provides that succession to immovable property is governed by the law of the jurisdiction where such property is situated. Therefore, where an English habitual resident dies owning immovable property in France without having made a valid express choice of English law, France would refer the succession of the French immovable property to English law which refers it back to French law, so French law and its forced heirship rules would be applied.
What are the French forced heirship rules?
There is no testamentary freedom in France; forced heirship rules apply to a person's worldwide estate if they died domiciled in France. However, it only applies to their French immovable property if they died domiciled outside France.
Where French law applies, children cannot be disinherited. Articles 912 to 917 of the French Civil Code provide that the children of a deceased, whether legitimate or illegitimate, are entitled to a minimum proportion of the estate (réserve héréditaire) calculated according to the number of children:
where the deceased had one child, that child is entitled to half of their parent's estate
where the deceased had two children, they are entitled to one third each
where the deceased had three or more children, three quarters of the estate divided equally between them
Should a child die before their parents, the deceased’s issue are entitled to take the part their parent would have taken in equal shares.
A surviving spouse is not a forced heir unless there are neither children nor surviving issue of the marriage; in this case they are entitled to one quarter of the deceased's estate. A surviving spouse can however by will be given a usufruit (broadly a life interest) in the whole of the deceased's estate.
Since January 2007, adult forced heirs can waive all or part of their entitlement by a written document (executed in the presence of two notaires and in accordance with other formalities laid down by article 929) and children of a deceased can agree that all or part of their share shall pass directly to their issue (article 1078-4).
What are the inheritance tax rates in France?
Where the deceased was resident for tax purposes in France, all their worldwide assets are subject to French inheritance tax. However, only their immovable property and movable property situated in France are subject to French inheritance tax if they were a tax resident elsewhere (subject to any applicable double tax treaty).
The rates of inheritance are calculated on each beneficiary's share of the estate and taxed at progressive rates according to the beneficiary's relationship to the deceased. Since 2007, transfers between spouses upon death are not subject to French inheritance tax. Inheritance tax rates in France are as follows:
Direct descendants of the deceased benefit from a tax-free allowance of €100,000 and pay tax on the excess at rates rising from 5% to 45% on the value above €1,805,677.
Where there is no blood relationship between the deceased and the beneficiary, tax is paid at the flat rate of 60% on the amount they inherit above €1,594.
Lifetime gifts are subject to gifts tax on a similar basis (lifetime gifts between spouses are taxable above a tax-free allowance of €80,724).
Should you make a French will if you already have an English one?
France has signed the 1961 Hague Convention concerning wills and therefore recognises wills made in accordance with English law. Although an English will can cover French assets, it’s advisable to have a separate French will to cover assets situated in France with an English will covering the worldwide assets outside of France (and outside any other jurisdiction where the person making the will may have assets for which a further separate will may also be necessary).
Whilst an English will may be recognisable in France it may be unworkable because it employs, for example, English concepts of executors and trusts alien to the French and can also lead to beneficiaries paying more French inheritance tax (at rates of up to 60% where assets pass to a trustee who is not related to the deceased).
Having a separate French will for French assets usually helps the administration of the estate as the public officials and lawyers involved only need to consider and apply procedures and rules with which they are familiar. Separate wills may also speed up the administration of the estate as the French notaire will not have to wait until an English grant of probate has been obtained (and officially translated) before being able to deal with the French assets.
When having two wills, both wills should expressly elect for English law to apply if it is desired to avoid the application of the French forced heirship rules and care must be taken, both at the outset and later if either will is updated, to ensure they do not overlap and that one will does not inadvertently cancel out the other.
How do you write a French will?
The French Civil Code provides many different types of will which a person who is of sound mind and who has legal capacity may make. The most commonly used are:
Holographic will
Handwritten or holographic wills are the most common type of will made in France. Article 970 of the French Civil Code provides that a holographic will is not valid unless "it is entirely handwritten, dated and signed by the testator" and that there are no other formalities required. It can be written in any language, not necessarily in French, but must be handwritten and on an otherwise blank piece of paper. No other handwriting should appear on the paper and so it must not be formally witnessed.
Authentic will
Authentic wills are subject to more formality and more closely resemble the formalities required for an English will. Articles 971 to 974 of the French Civil Code provide that an authentic will is drawn up by a notaire according to the instructions of the testator: it must be read over by the notaire to the testator and then signed by the testator in the presence of the notaire and two witnesses who must also sign (and who must not be beneficiaries).
Sealed wills
Article 976 of the French Civil Code allows for sealed or secret wills and are less frequently used. The will is typed or handwritten by the testator, signed before being closed, stamped and sealed and then presented by the testator to a notaire in the presence of two witnesses. The notaire prepares a certificate to attach to the will or envelope stating that it contains the last will of the testator and all formalities have been complied with. The contents of the will remain secret until it is opened on the death of the testator.
Interestingly, Article 985 of the French Civil Code provides for wills made "in a place with which all communication is interrupted because of contagious disease, may be made before a judge of the local court or before one of the municipal officials of the commune, in the presence of two witnesses".
Testators may revoke their wills at any time by drawing up a new will or, in the case of a holographic will, by literally tearing it up.
How do you register a will in France?
French wills can be registered at the Fichier Central des Dispositions de Dernières Volontés (French Central Wills Register) by a notaire who keeps the original in their safekeeping. Holographic wills can be registered, but only by a notaire who will then also keep the original. Registration is not a condition for validity but guarantees that the will can be found and implemented as any notaire administering an estate will carry out a search against the deceased's name.
Members of the public can also search the registry to see if a deceased person left a will and the details of the notaire who holds the will. The notaire will then confirm whether the person requesting is a beneficiary of the deceased or not.
What happens when someone dies without a will in France?
Brussels IV provides that where a person dies ‘intestate’ (without a valid will), the law of their last place of habitual residence governs their succession. As with where a person dies testate but without an express choice of governing law, the law applied is the law that the jurisdiction of last habitual residence would apply.
Where a person owning French property dies intestate, if they were last habitually resident in England, the French immoveable assets will pass under French intestacy rules and French moveable assets will pass under English intestacy rules (and so French forced heirship rules will apply to any French immovable property).
The French rules of intestacy are set out in Articles 734 to 762 of the French Civil Code and broadly provide for an estate to pass to descendants in priority but where there is a surviving spouse the survivor can choose to take either a life interest in the whole estate or full ownership of one-quarter with the other three quarters divided between the children.
How do you apply for probate in France?
Estates are usually administered by a notaire, although their involvement is only mandatory if the estate includes immovable property.
The notaire will first search the French Central Wills Register to check whether any will has been registered and, if so, where the original is being kept. The notaire then prepares the acte de notoriété which establishes the identity of the deceased’s beneficiaries and the proportion of the estate they are each entitled to inherit and the acte de partage by which the estate is distributed between the beneficiaries.
The notaire will also help the beneficiaries complete their inheritance tax return (déclaration de succession) and ensure that any inheritance tax due is paid (within 6 months of the date of death or 12 months if the deceased died outside France), as well as prepare the necessary documents to transfer the ownership of any immovable property and carry out the formalities with the French Land Registry.