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22 Sep 2015

Sean O'Connor explains :

Basic Rule : If you have one child he or she must inherit one half of your Estate. If two children, they must inherit two thirds of your Estate one third each. If three or more children they must inherit three quarters of your Estate equally. The portion of your Estate above the so-called 'reserves' mentioned above is called the disposable portion. 

Surviving Spouses : you can by Will leave to your surviving spouse one quarter absolutely and three quaters in Life Interest. If you bought the property jointly, surviving spouse will then (after you have died) have five eighths absolutely and three quaters in Life Interest. If he or she wants to sell the property yes can do but must hand over three eighths of the sale proceeds to the children minus the value of the Life Interest which goes down with age according to a predetermined table. As a variation on this theme your Will can leave all of your Estate to your surviving spouse in Life Interest.

Renunciation of Reserves : The children if of full age can, if they so choose, renounce their compulsory reserves in favour of the surviving spouse or in favour of another of the children. They must go to the French Notary's Office in person. Powers of Attorney are not accepted for this purpose.

Avoiding the Reserves : There are a number of ways of doing this :

 (a)       Tontine Clause : valid if the age difference between the spouses is not more than ten years, if their financial contributions to the property are at least roughly equal, and if they are in roughly the same state of health when they purchase. Under the Tontine Clause the surviving spouse takes all and the children are kept waiting until the second spouse dies.  Note that 'previous' children can be disinherited, which you might not want. Note also that with the tontine clause neither spouse can sell the property without the consent of the other.

 (b)       Change of Matrimonial Regime : You can adopt, for your French property  only, a French matrimonial regime of common ownership under which the surviving spouse takes all. Again the children are kept waiting until the second spouse dies. The requirements for the Tontine Clause are not applicable. This device does not work against 'previous' children who can go to the French Court and contest it.

 (c)        Using a Company : You can purchase the property through a French  Land Holding Company called a Société Civile Immobilière or SCI for short. Provided that you continue to reside in the UK, the shares in the SCI will devolve under English law and hence under your English Will.

 (d)        Brussels IV : This is a European Union Regulation which entered into force on 17 August 2105. Provided that you are habitually resident in France, meaning that your principal home is in France, at the time of your death, and assuming that you are a British national, your Will can make English law apply to the devolution of your French property. In our opinion Brussels IV does not apply if you live principally in the UK, simply having a second home in France. Brussels IV is brand new, is revolutionary, and bristles with difficulties. It is to be handled with care. For more information on this please see our French Wills section