Procedure For Dealing With Minor Children Inheriting French Property

 In Trusts

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children inheriting French propertyCuriously for the English lawyer a child can hold legal title to real property in France. A fact largely irrelevant for the English lawyer -until that is an English minor domiciled and resident in the UK suddenly inherits a share of French real estate under French succession laws.  So what should you do?

“The Problem”

It is of note that in France the deceased’s property does not vest in an executor or personal representative, upon the deceased’s death, but it simply vests legally and beneficially in the ‘heirs’.

There is no concept in France of a trustee being appointed over property to which the child has become absolutely entitled; indeed the concept of a trust is alien to the French Civil Code itself. An equivalent power to S42 Administration of Estates Act 1925 simply does not exist. Instead a request will be made by the notaire dealing with the administration of the Deceased’s estate, for an order from the English court giving its permission for the child’s parent to deal with the inherited French property.  In the absence of the same the French administrative machine is virtually powerless to deal with any real property within the Deceased’s Estate with any finality. Real estate cannot be sold, transferred or otherwise disposed of without an order.

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It is of course the case that property will often have to be realised to pay French inheritance taxes and other death duties. It is therefore easy to see how the administration of an Estate involving an English minor can quickly grind to a halt if an order is not expeditiously obtained. It is not uncommon in circumstances when the notaire is waiting to receive an order from the English courts permitting the parents to act on the child’s behalf, for the notaire to draft a `compromis de vente`  (French land sale contract) with a condition precedent clause, to take account of the need to obtain the relevant authority.

For completeness, if there is no real property within the estate then the administration can proceed without an order from the English court. The parent will be required, and is empowered without further authority, to sign the two key documents, the ‘grant of probate’ which will list the succession and the statement of rights of each heir and the declaration of the Estate for the purposes of the French tax services – which will list all the property after the payment of any debts.

The English Procedure

As a matter of English law S3(3) Children Act 1989 provides that a parent is a child’s trustee and has  control of any property whether in possession or reversion. It is perhaps therefore not surprising that applications are often wrongly made under the Children Act 1989 for an order empowering a parent to deal with French property. The correct application for the parent is in fact for a vesting order pursuant to S53 Trustee Act 1925.

To bring the jurisdiction into play the court must be satisfied that the conveyance or transfer of the property will be made ‘with a view to the application of the capital or income thereof for the maintenance, education or benefit of the infant..’. The power is discretionary and the parent must satisfy the court that there is a bona fide intent to apply the proceeds of their interest in the French property towards their maintenance. It is not simply enough that it is ‘for the child’s benefit’, the old authority of Re Heyworth Contingency Reversionary Interest [1956] Ch 364 is still good authority for the importance of the wording ‘with a view to the application of…’.  Ultimately the court if of course being asked to sanction a transaction which will change the nature of the property to which the child is absolutely entitled. For this reason expert evidence should be put before the court in support of the proposed sale or transfer price of the property.

As stated above the power under S53 is a discretionary power and to that extent when an infant of British nationality is one of the heirs to a French succession, the decision as to whether French land can be dealt with during the child’s minority (and therefore often whether the administration of an Estate can be finalised) ironically may well rest with the English and not the French court.

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