Will the changes to French inheritance law affect me?

In this article, Bryony Anning of Stone King’s International & Cross-Border Team discusses important changes to French inheritance law. 

Forced heirship

In England and Wales, there is testamentary freedom. Broadly speaking, this means that you are free to leave your assets as you wish. 

In France, there are strict rules in place which aim to prevent children from being disinherited. These are known as forced heirship rules or réserve héréditaire.  

If you have children, the French forced heirship rules provide that your children inherit your estate as follows – 

• If you have one child, they are entitled to a half share of your estate 
• If you have two children, they are entitled to a two-third share of your estate 
• If you have three or more children, they are entitled to a three-quarter share of your estate 

You are free to leave the remaining share as you wish. 

Choice of law

Under the EU Succession Regulation, it is possible to elect for the laws of your nationality to apply to the devolution of your EU assets*. 

This is particularly useful for British nationals owning property in France, who would prefer that the laws of England and Wales apply (testamentary freedom), rather than France (forced heirship). 

In these circumstances, a choice of law clause can be included in your wills**.

Changes to French inheritance law

The changes to French inheritance law came into effect from 1 November 2021 and affect Article 913 of the French Civil Code. The changes could limit the effectiveness of a choice of law election under the EU Succession Regulation. 

The law provides that a child (or children) who does not inherit in accordance with French forced heirship rules has the option to make a claim against their parent’s estate equal to the amount of their reserved share. 

Importantly, in order to bring such a claim, either the parent or the child must be an EU resident or an EU national. 

Rachel and Alex are a British couple, who live in Salisbury with their three young children. Most of their assets are in the UK, although they own a small holiday home and bank account in France. In their wills, they leave their assets to each other on the first death, and then to the children on the second death.

Rachel and Alex are both British nationals and so can make an election for English law to apply in their wills, under the EU Succession Regulation, thereby bypassing French forced heirship rules. 

They are unaffected by the changes to Article 913, because none of Rachel, Alex or their children are EU resident or EU nationals. This means that they are free to leave their assets as they wish. 

Liv is a British expat living in France, together with her springer spaniel Petal. She wishes to leave all of her French assets to the charity Spaniel Aid UK. Liv has a son, but they are estranged.

Although Liv is able to make an election for English law to apply in her will, the changes to Article 913 will apply to her estate because she is an EU resident. 

On Liv’s death, the notaire (French lawyer) dealing with the estate administration in France is required to contact Liv’s son and explain that he has the option to make a claim against her estate equal to his reserved share – in this case, a half share of the estate. The remaining half share will pass in accordance with the will, to Spaniel Aid. 

Liv’s son is not obliged to make a claim and can instead agree that the terms of her will should be carried out – in this case, all of Liv’s assets would pass to Spaniel Aid UK. 

It is important to note that post-Brexit, UK charities may no longer be eligible for the same inheritance tax concessions in France. Spaniel Aid UK could end up paying French inheritance tax at the highest rate of 60%, with a tax-free allowance of only €1,594. Liv may instead wish to consider leaving her assets to a French charity with the same charitable purpose.

Anthony and Amélie live in Winchester with their teenage daughter, Scarlett. Anthony is British and Amélie is French. They own a property in France, owned en tontine.  In their wills, they leave their assets to each other on the first death, and then to Scarlett on the second death.

Importantly, Anthony and Amélie own their property en tontine, which is similar (in effect) to owning a property as joint tenants in the UK.  

It is difficult to explain ownership en tontine – it can be helpful to think of it as a legal fiction! If you purchase your property en tontine, the first to die is considered never to have owned the property and the surviving owner is considered to have owned the whole property from the outset of the transaction. 

On Amélie’s death, the French property will be deemed to be owned entirely by Anthony – it will not form part of Amélie’s estate and so is outside the scope of the forced heirship rules. On Anthony’s death, the French property will pass under the will to Scarlett. 

Owning your property en tontine can be a useful method in ensuring that your French property continues to be owned by the surviving spouse on death. We should mention that it is possible for a tontine to be contested, although in very limited circumstances.

Tom and Joe are a British/French couple who live in London with their two adopted children, Noah and Grace. Noah’s parents died when he was a baby, leaving him a large inheritance. For this reason, Tom and Joe wish to leave their assets to Grace. Is this something Noah and Grace can agree to in advance? 

The default position under the French forced heirship rules is that Noah and Grace are entitled to 2/3 of the French assets in equal shares.  

In France, it is not normally possible for beneficiaries to renounce their entitlement, in advance of death.  

In limited circumstances, a beneficiary can enter into an agreement called a Renonciation Anticipée à l’Action en Réduction. This is a deed in which an adult beneficiary agrees not to make a claim against an estate which is not distributed in accordance with French forced heirship. 

In our scenario, it will not be possible for Noah and Grace to agree to renounce their inheritance, because they are both minors. However, there may be other options available to Tom and Joe, to ensure that their children are provided for in the event of death. 

Will the changes to French inheritance law affect me? 

It is anticipated that the changes to Article 913 will be challenged at a European level because they are in direct conflict with the EU Succession Regulation. However, any challenge and its outcome is likely to take several years to be concluded.  

In the meantime, people owning assets in France should be aware that their assets may not pass as they had intended. 

If you would like to discuss putting in place wills to cover your assets in the UK and France, please contact Bryony Anning and the International & Cross-Border Team at Stone King LLP – either by telephone +44 (0)1225 337599 or email [email protected].  

*excluding Ireland and Denmark 

** please consult a cross border advisor first, as there can be important tax consequences to consider. 

Stone King LLP will be at the French Property Exhibition on January 27th & 28th, 2024. Get Tickets