Amendment to French succession law from 01 November 2021

By Prof Robert Anthony, Anthony & Cie

The change in law There is a change in French law whereby under Article 913 completed by an annex, when a deceased or one of their children at the moment of death is a citizen of the European Union, or a resident in the European Union. This applies where there is no mechanism to protect any of the children to reserve a part of the estate; in other words the will is not based on the French hereditary reserve. Each child or their descendants can claim an allocation of the estate by way of compensation on the assets situated in France at the date of death in order to re-establish their rights concerning the French hereditary reserve under French domestic law. This implicitly ends the ability on contestation by any of the children to apply foreign estate legislation in France.

This has serious consequences on the testaments in Anglo-Saxon law whereby there is a discretion to leave assets in accordance with the defunct wishes. In addition, this impacts the application of Sharia law where women are treated differently to men.

The possible exception but notary notification

However, if the defunct is not resident in France or the European Union nor any of the children, one would think, despite the assets being in France, the new regulation would not apply. The annex states when the notary is appointed to dealings with the estate, that should French hereditary rights be prejudiced by the will, the notary is obliged to inform each potential beneficiary as to the diminution of their entitlement, and their rights to claim their allocation under French law. This has always been spontaneously provided to the descendants by the notary.

This new law took effect for any estates from 01 November 2021.

Conclusion

Possible solutions – Where one’s clients have assets in France it is important to analyse on a case by case basis their circumstances, and to see what the position is in France on estate duty and wishes. There are still ways to reduce French exposure to estate duty and the allocation of assets relating to forced heirship rules. Debt always diminishes the value of French-based assets which often concern immovable property. Corporate entities such as civil code companies can be useful as well as the Monaco Civil code company to own French based property.

Help at hand – We at Anthony and Cie often come across these issues and do our best to structure clients in accordance to French law. It remains to be seen how this change in law will be contested in accordance with European law and freedom of movement. However, the United Kingdom is no longer a member of the European Union so this must be taken into account. In addition, a question arises as to the treatment of past wishes prior to the new legislation coming into force. This is an important change that should not be overlooked when advising clients on their French based assets which concern their estate planning.

The importance of compliance – Lastly it is important that the client’s will where they reside conforms with the legislation of their home country. This can then be registered in France so it is respected at the demise of the client. If it is updated, both countries need updating to avoid a problem in its execution. In Anglo- Saxon countries a will often need witnessing. A hand written will that it is not witnessed is not recognised everywhere. Please ensure your client’s will is properly validated and not overlooked accordingly.


Prof Robert Anthony

Prof Robert Anthony

GGI member firm
Anthony & Cie
Fiduciary and Estate Planning, Tax
Sophia Antipolis, France
T: +33 4 93 65 32 23
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: antco.com

As a Multi-Family Office (MFO),Anthony & Cie supports its wealthy clients in the management of their assets, in France and worldwide. In the past 40+ years, they have expanded into an international consultancy of tax analysts, financial advisors, wealth managers, and consultants. They specialise in advising on cross-border tax matters as well as on financial, real estate, financing, investment, and inheritance needs, and they act as an MFO for international clients.

Professor Robert Anthony is the Founder and Principal Partner of Anthony & Cie. He was formerly professor of international tax law at the Thomas Jefferson School of Law, California. He is a chartered certified accountant (UK) and certified financial planner (France).


Published: GGI Insider, No. 117, January 2022 l Photo: Uwe Rieder

Ggi Logo 150x109px

GGI Global Alliance AG

Sihlbruggstrasse 140
6340 Baar
Switzerland

Contact

T: +41 41 7252500
F: +41 41 7252501
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.ggi.com