One aspect of French succession law that often horrifies British purchasers of property in France is how little protection it affords to the poor widow or widower left behind after the first death.

Children have always been well looked after, owing to the very long-held belief that property should stay with the blood line. Therefore children cannot be disinherited and must be left a minimum of half, two thirds or three quarters of the deceased’s estate depending on the number of children. The rights of other relatives such as brothers, sisters, nephews and nieces were also put before the spouse when there was no will or other special measure in place.

At last, the law has been changed (3 December 2001) to give much improved rights to the surviving spouse. The surviving spouse’s situation varies depending on whether the deceased leaves only children of the relationship with the surviving spouse or children from another relationship.

When the deceased leaves children from another relationship, the very minimum right that a spouse has is to occupy the marital home for one year after the first death. After that, the surviving spouse has an additional right to occupy it for the rest of his or her life and use the contents. However, the widow or widower can be deprived of this second right by a provision in the deceased’s will. Previously, the spouse had no right to stay in the property unless he or she was a joint owner. Under the new law, the surviving spouse is also entitled to receive a quarter of the deceased’s estate absolutely (even where there is no will).

When there are no children from other relationships but there are children from the relationship with the deceased (produced during the marriage or otherwise), the spouse will have the right to choose between a quarter share of the estate (as an absolute owner) or a life interest in the whole estate. A life interest is a right to use and enjoy the property and to receive revenue from it. The spouse could therefore rent the property and move elsewhere if so wished. This is obviously a more valuable right than that of occupation only, which does not give any rights to revenue such as rent.

A life interest in money, shares etc is as good as an absolute interest as the spouse can use and dispose of it as desired. Previously, even where the deceased’s children were of the marriage, the spouse only had a right to a life interest in a quarter of the estate. Under the new law, the reserved heirs can ask for the life interest to be converted into a rent, if they wish, but only when the property concerned is not the surviving spouse’s main residence. In the absence of agreement on the amount of rent, the courts would have to decide.

When the deceased leaves no children but leaves surviving parents, the surviving spouse is entitled to an absolute interest in a half-share of the deceased’s estate. If there is only one surviving parent the spouse will be entitled to an absolute interest in three quarters of the estate. Previously in this situation, the spouse would only have a right to a life interest in half the estate.

When the deceased leaves no parents or children, the spouse is entitled to inherit the whole estate absolutely thus eliminating the rights of grandparents, brothers, sisters, nephews and nieces. The exception to this is when the property concerned belonged to the family. This might apply if a house was inherited by the deceased from his parents. However, it must be exactly the same property. If the inherited property was sold and another property bought with the proceeds, the aforementioned relatives would have no rights over it. Also, the deceased can deprive the surviving spouse of up to three quarters of the estate by will if so wished, but no more than this. Thus, where there are no surviving children or parents, the surviving spouse becomes a reserved heir, ie, one who cannot be disinherited of at least one quarter of the estate.

All the rights mentioned above are subject to inheritance tax except the right to occupy the premises in the year after death. The value of the right to occupy the premises is calculated as 60% of the value of a life interest. The value of a life interest is calculated according to the age of the recipient. The younger the surviving spouse, the greater the value of the life interest.

Most of the new law came into effect on 1 July 2002 but some is already in effect. The right to occupy the principal residence for one year after death applies to successions opened from 4 December 2001.

Does this new law go far enough? For those used to the common law system (England, Wales, United States, Australia), it probably does not. The majority of British purchasers want to give the maximum power and protection possible to their spouses. So is there anything else that can be done to improve the situation further? The answer is yes. There are two other methods which are worthy of mention; which is the most appropriate depends entirely on the objectives of those concerned and on their particular family circumstances. They are outlined very briefly here:

Communauté universelle avec clause d’attribution
This means changing your marriage regime so that everything you own is considered the property of the marriage. The English marriage is not considered by the French to be under this kind of regime. It is therefore necessary to have a contract drawn up by a notary to change the marriage regime for the French property.

On the first death, all the property passes to the survivor. The passing of the property is seen, not as an inheritance, but as an advantage of marriage; therefore, there is no inheritance tax to pay. This is a very attractive option for anyone owning a property with a value higher than about £100,000. In this way, the surviving spouse can inherit the whole estate with no tax to pay.

The disadvantage of this regime is that it will usually be ignored insofar as it affects the rights of children not of the marriage. Expert opinion has it, however, that if such children are prepared to renounce the right to take action to obtain their inheritance then the property will pass under the regime as intended. If the children do not renounce this right, then the spouse will be treated as if there had been a donation entre époux, described below.

Donation entre époux au dernier vivant
This means making a gift to the other spouse which comes into effect on the first death. The whole estate could be gifted in this way. However, if there are children from the marriage or otherwise, the gift will be reduced so that the spouse does not inherit the whole estate but may instead choose one of the following options:

• An absolute interest in a quarter of the estate
• An absolute interest in a quarter of the estate plus a life interest in the rest
• A life interest in the whole estate

by Susan Busby (published in Living France)

Susan Busby MA, France Legal, Tel/Fax: 01473 327759, e-mail: ssb@francelegal.co.uk

© France Legal 2002