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A FRENCH SUCCESSION
This
issue of the week looks at some of the issues surrounding a French
succession and how it operates. Clearly, every case scenario is
different so this article simply seeks to provide some guiding
principles to assist anybody facing the prospect of dealing with a
French succession, be it for a holiday home or somebody’s entire
estate. This article does not propose to deal with how French
inheritance law actually operates.
Non-French resident
A
non-French resident is only concerned by a French succession in relation
to real estate property situated on French territory. A French notaire
has to be involved with the succession of real estate property due to
the fact that the transfer of ownership must be recorded in an authentic
deed which only a notaire based in France can draw up and register. To
the exception of certain specific cases mentioned below, it will be
necessary to draw up an ‘attestation immobilière’ which is a
document recording who has inherited what in the property. This
document must be signed with the notaire by the inheritor(s). Unless
otherwise stated by either a will or particular legal provisions, the
inheritor(s) administer and safeguard the property from the date of the
owner’s death, but they can only sell once the ‘attestation immobilière’
has been signed.
French resident
The
succession of a person who deceased domiciled in France for inheritance
purposes, which in this sense of French Private International Law
equates to a notion very similar to residency, will incorporate real
estate property situated in France as well as moveable assets and
chattels situated in France and elsewhere.
Therefore, the law applicable to the succession of a French resident UK
citizen would be as follows:
-Main
residence situated in the Gers as well as its furniture: French law
governs the succession
-Bank
accounts and car situated in France: French law
-Bank
accounts, shares and investments based in the UK and Jersey: French law
-Rented
flat in London, U.K.: English law governs the succession of the flat
As a
result, it will be necessary for the inheritor(s) to sign an
‘attestation immobilière’ in relation to the main residence situated
in France. An inventory (‘inventaire’) would normally be drawn
up in respect of the furniture, usually by a judicial officer known as a
‘huissier’. For the bank accounts in France, the notaire would
usually obtain information about these directly from the banks and the
inheritor(s) would pass on information pertaining to the car.
As for
bank accounts, shares and investments outside of France, it will be
necessary to provide the notaire with valuations for the date of death.
One would normally contact the individual banks in question to obtain
written details of the capital plus any interest owning upon that date.
Information about shares and other investments can be obtained directly
or via a title research company. The notaire would draw up a separate
document to be signed by the inheritor(s) with regards to the general
principles of who is entitled to what proportion of the estate, known as
an ‘acte de notoriété’. It would then be necessary to proceed
through probate procedures in Jersey and the UK on the basis of this
French document. It should be noted that formal translations will be
required into English.
If the
assets are to be divided out between the inheritors, an ‘acte de
partage’ will be drawn up with the notaire specifying who is to
receive what share of particular assets. Values will be attributed on
the basis of who is entitled to what as stated in the aforementioned
‘acte de notoriété’, and the ‘attestation immobilière’ if the sale
proceeds of the house are to be divided or the house is to be attributed
to a particular beneficiary.
Regime of universal community
If a
husband and wife have adopted the regime of universal community, the
whole aforementioned succession process will be avoided. The notaire
will draw up an ‘attestation immobilière’ with regards to the
real estate property and this is effectively all that is required.
Tontine clause
Similarly, if there is a tontine clause in relation to the co-owners, no
succession is undertaken when one of them passes away – the surviving
co-owner automatically becomes the owner of the entire property.
Inheritance tax
Inheritance tax is payable within one year for a non-French
resident and within six months for a French resident. The tax
due is declared on a form known as a ‘déclaration de succession’
which is usually established with the notaire. It is not obligatory for
a notaire based in France to be involved with this tax form but he or
she almost always is, particularly given the requirement for there to be
an ‘attestation immobilière’ in relation to real property. The tax
must be paid at the same time as the form is submitted. If payment
is submitted after the above deadlines, penalties and interest will be
due.
Wills
If a
non-French resident left a will, for example in the UK, it may still be
applicable to the French property if it is widely drafted. It will
therefore be necessary to provide the will to the notaire and it will
normally have to be registered at the local Court in France. Of course,
an official translation of an English will into French will be
required. If there is a French will specifically relating to the
property then matters are evidently simplified (plus it is much more
likely that the French will can have its full effect under French law).
For a French resident,
similar considerations will apply as aforementioned, although the risk
of potential problems in relation to the application of a non-French
will is greater. In our example, French law applies to nearly all of
the deceased’s estate except for the London flat. If the deceased
leaves an English will which relates to all assets and property, it will
be fully applicable for the London flat. However, it could cause
difficulties in respect of all other assets and property depending upon
what it contains and whether a conflict arises with French law.
16/06/2006
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Issue of the week
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