FRANCE Law and Practice Contributed by: Elodie Mulon, Jennifer Tervil, Romane Lemaitre and Emmanuelle Bonboire-Barthélémy, Chauveau Mulon & Associés
These provisions significantly simplify the manage - ment of international estates by reducing conflicts of law and fostering a harmonised approach. Fundamental Principles of International Succession Law French law favours the application of a single succes - sion law to govern the transfer of hereditary assets, regardless of their location. This principle is rein - forced by the EU Regulation, which ensures a unitary approach to succession and permits the calculation of reserved portions and disposable shares on each distinct asset pool. Tax Questions As regards taxation, the situation is somewhat differ - ent. France has nevertheless entered into numerous bilateral treaties, in particular to avoid the heavy bur - den of double taxation that may arise under French law. French legislation provides for various mechanisms to anticipate one’s succession and gradually transfer assets during one’s lifetime, which inevitably has a fiscal impact at the time of death. Examples include holding property through a family- owned real estate company (SCI) or gifting the bare ownership ( nue-propriété ) of assets while retaining the usufruct. However, limitations persist, especially in cases involving non-EU countries or international conven - tions not ratified by France. In such instances, the general principles of French private international law continue to apply. 2.3 Forced Heirship Laws French jurisdiction has a forced heirship system, which is a core principle of French succession law. It ensures that certain heirs ‒ primarily children ‒ receive a mandatory share of the deceased’s estate, regard - less of the deceased’s personal wishes. The children of the deceased are always forced heirs. The spouse can also be a forced heir when there are no children. If there are children, the réserve (reserved portion) depends on their number:
• with one child, the reserved portion is 1/2 and the freely disposable portion is 1/2; • with two children, the reserved portion is 2/3 (1/3 each) and the freely disposable portion is 1/3; and • with three or more children, the reserved portion is 3/4, divided equally between them, and the freely disposable portion is 1/4. French law also provides a right allowing each child or their heirs to claim from the deceased’s assets located in France at the time of death, in order to restore the reserved rights granted to them by French law, up to the limit of those rights, if the deceased is French and their estate is governed by the law of a country that does not recognise the forced heirship ( prélèvement- compensatoire ). While the system is rigid, some flexibility exists through consensual arrangements, including the following. • Donation-partage (Family Gift Partition): (a) allows a parent to distribute assets during their lifetime among children and/or grandchildren; (b) helps avoid disputes and freeze asset values; and (c) all children should be involved to ensure equal - ity and avoid future litigation • Will planning within limits: (a) a person can freely dispose of the disposable quotity via a will; and (b) with careful planning, this allows some tailoring of the succession. • Renonciation anticipée à l’action en réduction (RAAR): (a) if a testator gives too much by will and it is more than the disposable quotity, forced heirs can request a reduction of the legatee’s share. However, since 2006, French law allows a child to renounce in advance their right to challenge an excessive gift or legacy that infringes their reserved share. This advanced waiver must comply with strict the formalities. • Assurance-vie (life insurance): (a) amounts paid via a properly structured assur - ance-vie are not part of the estate and can exceed the disposable portion, provided they are not “manifestly excessive”; and
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