Law 2021-1109 came into force on 1st November 2021. It introduces several measures to protect children from being disinherited, reviving an old right of compensation (droit de prelevement ) and redrafted article 913 of the civil code from the ashes. Several practical aspects of this law are still unknown, and many expats in France are understandably worried about the implications for their estate. Below I have set out answers to common questions, based on what we know so far.
1.What does droit de prelevement mean?
This refers to the right of compensation, which entitles reserved heirs (heritiers reservataires) of an estate to claim compensation over the estate's French assets. This claim to compensation is triggered when reserved heirs (see below) are disinherited under legislation that does not apply forced heirship, such as English law.
2. Who are the beneficiaries of the droit de prelevement?
The beneficiaries are known as 'reserved heirs', who cannot be disinherited in France. The legal text refers only to children as reserved heirs, but under French law, parents and surviving spouses can also be reserved heirs under certain conditions. However, the law does not seem to provide anyone other than children with legal rights.
3.When does this law come into force?
Since 1st November 2021, any new probate is subject to the right of compensation (droit de prelevement), should a condition of article 913-2 be fulfilled. These conditions are as follows:
- 1. Either the deceased - or one of his children - has habitual residence in a member state of the EU or is an EU national
- 2. The chosen law by the deceased does not recognise the concept of forced heirship, such as common law.
4. Is my will still valid if I made a choice of law under the European succession law?
Wills have always been recognised as valid in France, as long as they comply with one of the conditions set out by article 1 of the Hague Convention dated 5th October 1961. Your will retains effectiveness within the limitations of forced heirship.
5. Does the new legislation apply to all my assets worldwide?
No, it does not. The law clearly states that compensation only applies to French assets, i.e. property, bank accounts, savings, shares in companies (Sci, SARL,SAS) and any assets that would normally be part of the deceased's estate. Life insurance policies in France will not be taken into account when calculating the levy, providing that they have either a) been subscribed before the policyholder reaches 70 years or b) all payments were made before the age of 70.
6.Can I stop a child from making a claim?
No, you cannot. Children automatically have a claim if they do not receive their full legal share (or reserve). However, they are able to renounce this right at the time of death.
7. I do not even know where my children live or how to contact them. How will they be able to claim their share?
The Notaire is obligated to inform children of their legal rights. If the other beneficiaries of the estate do not have their contact information, the Notaire may appoint a genealogist to trace them. This has two direct consequences: it will take longer to settle the estate, and the genealogist's fees will increase the overall cost.
8. What can I do to protect my spouse if the children claim their share?
The civil code provides different options to protect surviving spouses, either in full ownership or life interest. In addition, the surviving spouse will benefit from a right to use the property (droit viager au logement).
9. Can I ensure that my wife will not be forced to sell our house, if it is our only valuable asset?
If you make a will, the surviving spouse can benefit from a life interest over the estate and a droit viager au logement, giving them protection to carry on using the property. The children could still try to request their share of the estate, but it is unlikely that a judge would force the sale of the family home.
10. If I have a tontine clause, can the children still claim their share?
It is important to clarify that tontine only covers a property, not the rest of the estate. The tontine provides an exception in which the children will not be able to claim any legal right over the property - unless they try to challenge the tontine itself.
11. If I transfer all of my assets to my spouse and no longer own anything, will my children still be able to claim their share?
Yes, your children will still be able to claim their share. When a Notaire settles an estate under French law, he must reintegrate to the estate all assets that were gifted by the deceased during their lifetime to heirs or legatees (article 922 of the code civil). This allows the Notaire to determine the reserve that children are entitled to and to fix the disposable part (quotite disponible) that can be allocated to legatees, including the surviving spouse.
12. As a surviving spouse, I have to share the estate with the child(ren), can I buy them out and keep the assets?
Yes. If you have sufficient funds and they agree, then you can buy them out.
13. Can we ask the child(ren) to renounce their claim before we die?
Yes. You can ask children to renounce their right to their legal reserve either partially or in full. This is called Renonciation anticipee a l'action en reduction; however, it is quite a complex process and requires all parties to be present in France with a Notaire. Another option is to use article 25 of the European Succession law to set up an 'agreement as to succession' (or pacte successoral), in which case the law regulating the agreement can be the law of the nationality of the deceased, as permitted by article 25.3.
14. I live in France and we signed a donation entre epoux. Will this protect the surviving spouse?
Donation entre epoux ('gifts between spouses') are set out in article 1094 of the civil code. These are the most common provision for protecting surviving spouses. However, even with a donation entre epoux, the surviving spouse will not inherit the full estate; they will receive a portion, with the balance being shared between the children.
15. Doesn't this new legislation contradict European succession law?
Yes. The old right of compensation law was repealed by the Constitutional Council on 5th August 2011, and most lawyers that specialise in private international law agree that this resurrected right of compensation contradicts the EU succession law.
16. What is the likely outcome now? Can it be revoked?
In order for anything to change, either the Constitutional Council will be called into question regarding the constitutionality of the provisions of the new article 913 of the civil code, or we will have to wait until someone takes this matter to Court. In the latter scenario, it will take years before we get a final decision.