A New Twist On French Forced Heirship Rules
Since EU Regulation 650/2012 (Brussels IV) came into application on 17 August 2015, we have advised our clients who own assets in France that French forced heirship rules can be avoided by careful drafting of their Wills to include a declaration of law applicable to their worldwide estate as being the law of the country of their nationality, such as English succession law.
That said, it is important to highlight that in some cases the application of French law will be more beneficial than choosing the national law. Every case will be different.
It may be worth reminding our readers that, contrary to English succession law, which provides for full testamentary freedom, French succession law gives to all the children of the deceased person an entitlement to a reserved portion of their parent’s estate. This is known as the réserve héréditaire and cannot be set aside by the testator in their Will.
The LawSkills Monthly Digest
Subscribe to our comprehensive Monthly Digest for insightful feedback on Wills, Probate, Trusts, Tax and Elderly & Vulnerable client matters
Not complicated to read | Requires no internet searching | Simply an informative pdf emailed to your inbox including practice points & tips
Subscribe now for monthly insightful feedback on key issues.
All for only £120 + VAT per year
(£97.50 for 10+)
The extent of the réserve héréditaire depends on the number of children of the deceased. Article 913 of the French Civil Code provides that the réserve corresponds to one-half of the estate in the presence of one child, two-thirds in the presence of two children and three-quarters in the presence of three or more children. The testator can only freely dispose of the remaining portion of the estate, known as the “quotité disponible”, as they wish in their Will.
The EU Regulation had given British nationals the option to avoid French succession law by opting for the application of the succession law of the country of their nationality.
One would have thought that the matter was settled and the EU Regulation principles enshrined in French law. This was without counting on the determination of the French legislator to reinforce the protection of reserved heirs where the law applicable to the succession does not follow forced heirship rules similar to the French réserve hérédtaire.
On 24 August 2021, The French Parliament adopted a new law reinforcing the respect of the core principles of the Republic (Loi no. 2021-1109 du 24 août 2021 confortant le respect des principes de la République).
In its article 24, the law introduces a new paragraph to article 913 of the French Civil Code providing that: “ Where the Deceased or at least one of his children is, at the date of death, a national of an EU country or habitually resides in the EU and, when the foreign law applicable to the succession does not allow any concept similar to the reserve protecting the children (mécanisme réservataire protecteur des enfants), each child or their heirs can claim a compensation levy on the French assets existing at the date of death, in order to re-instate their reserved rights as provided by French law, in that limit”.
This new legislation, which comes into application for all deaths on or after 1 November 2021, will have a major impact on British nationals who live in France or in any other EU Member State, and those who are resident elsewhere but have a child living in the EU. Despite the EU Regulation allowing them to opt in their Will for English succession law to apply to their estate, the choice of law applicable will now, to a certain extent, rest on their children, who are given a right to claim their reserved portion of the French estate under French succession law.
There are many valid reasons why a child may not be included as a beneficiary of the parent’s estate; they may see their inheritance delayed until the surviving parent’s death, they may be estranged from the parent, or they may have a reduced benefit to provide more for a more vulnerable child or because the parent wants to also benefit other people, or charities.
French Notaires will now be required to determine if, under French succession law, the children’s reserved portion of the estate is respected and, if not, will have the legal obligation to contact all children and invite them to claim their reserved rights over their parent’s estate. Any child can decide not to claim their rights.
To give an example, a British national who has made a valid English Will, opting for his worldwide estate to be governed by English succession law, and leaving his estate to his wife outright should she survive him, cannot now guarantee that his French property will devolve in accordance with his testamentary wishes if, say, his son lives in Germany at the time of his death. The child will be invited by the Notaire to claim his reserved portion over the French estate, which, in the presence of one child of the deceased, is a one-half share. The same rules would apply if the father is residing in France.
This new provision applies for all children, whether they are children of the current marriage or born of a previous relationship. This will clearly have some impact on the surviving partner.
The compatibility of these new provisions with EU Regulation 650/2012 is puzzling many commentators including many French Notaires and legal challenges are to be expected. However, it may not be many years before it reaches the European Court of Justice.
It is too soon to fully understand all the practical implications. Many questions arise such as:-
- Who will decide on which assets the compensation payment is to be made? For example, could the payment be made from non-French assets even though they are not caught by the new law?
- What happens if some children, but not all, decide to make a claim under French law? Will the Notaire have to apply two laws to the estate: French succession law for those who have made their claim and English succession law for the other children and beneficiaries? Is it not in contravention with the core principle of the EU Regulation, which is clearly for one single succession law to apply to the worldwide estate?
- How will the Notaire be able to ascertain if one or more of the deceased’s children are resident and/or nationals of an EU country? Will a genealogist have to be systematically involved in all cross-border estates, especially as the Will does not necessarily name all children and yet the Notaire has a legal obligation to contact them all?
Further comments are likely to be coming up in the next few months once these practical aspects start to be addressed.
It underlines the need for all British nationals owning French assets, whether they reside in the EU or not, to consider the wording of their Wills and be aware of the potential impact of French succession law applicable to their French estate on their death. A current Will may not yet need to be updated, but it will be very important to understand that the terms of that Will may not now necessarily be followed fully, and it may be a case of initially understanding the impact this new law will have on the death of a parent.
For those considering investing in a French property, the choice of their ownership structure on purchase could be a way of avoiding this new legal pitfall. Legal advice from an expert solicitor on these matters has never been so vital.
Florence Richards is a French Property and Tax adviser at Furley Page Solicitors, previously working as an avocat in France. She advises clients in respect of French tax and French property and estate matters. She is also a member of the Association of Taxation Technicians (ATT). T | 01227 763939 W | Furley Page Solicitors Email / email@example.com
FREE monthly newsletter
Wills | Probate | Trusts | Tax | Elderly & Vulnerable Client
- Relevant learning and development opportunities
- News, articles and LawSkills’ services
- Communications which help you find appropriate training in your area