14/11/2017 by FranceTaxLaw 0 Comments
FRENCH SUPREME COURT RULES OUT FORCED HEIRSHIP IN FRANCE
Since the succession regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, that came into force on 17th August 2015 in the states members of the EU, to the exception of Denmark, United Kingdom and Ireland, the question was raised in France as to whether or not the forced heirship would prevail over the regulation.
Notorious Professors of Universities specialised in International Private Law, Notaires and lawyers have been debating on the subject since 2012, most of them agreeing to the idea that the EU regulation should conceal the end of an era! Indeed, the forced heirship will remain applicable for French national, but with over 5 million people from different nationalities living in France, the EU regulation is a tool that cannot be neglected when organising estate planning.
The Supreme Court (Cour de Cassation) rendered an interesting decision on 27th September 2017, that will no doubt, be widely discussed in the future.
In this case, two men living in California die there after organising their estate planning via a family trust. Some of the heirs, French, were completely disinherited by the Californian law and requested, before the French jurisdiction, their inheritance in France by means of the concept of “prelevement”.It allows a French heir to claim on the assets located in France the inheritance that would have been granted to him under French law, and which he was excluded by the foreign succession law governing the succession. They argued that the French public international policy contrasts with Californian law, which ignores forced heirship.
The Supreme Court notably retained in their verdict that" a foreign law to which the rule of conflict of laws applies and which excludes forced heirship is not, in and of itself, contrary to French international public policy and may not be set aside unless its real application to the case in question leads to a situation that is inconsistent with the rules of French law that are deemed to be fundamental".
The Supreme Court also considered the durable establishment of the deceased in California and most importantly the fact that the claimants were adults and not in a precariousness situation or need. The conclusion of the Supreme Court confirmed the judgment in Appeal that there was no reason to disregard California law in favour of French law.
It is clear from the decision that the Supreme Court took into consideration the situation of the heirs before disregarding force heirship and French international public policy. Would the decision have been the same if the heirs were minors or in need?