MONACO Law and Practice Contributed by: Donald Manasse, Donald Manasse Law Offices
Forced heirship will allow disappointed reserved heirs to claw back any gifts made to other reserved heirs that exceed the percentage provided for, to their detri - ment. The general rule is that it is impossible to renounce these rights in the succession of a person who is still living (although a choice of law rule may produce a different result). Therefore, consensual agreements of that nature will not work. It is possible, however, to validly constitute trusts, which do not respect the forced heirship allocations. It is also possible to for - mally make gifts that provide they may not be “clawed back”. 2.4 Marital Property The default marital property provision in Monaco law is that of separate property. However, if a couple was married somewhere other than Monaco (which is often the case with international families), the practice is to look at the matrimonial property regime applicable in the place of marriage, and the existence of a prenup - tial agreement. As a rule, the matrimonial regime appli - cable in the place of the first two years of marriage will apply, in the absence of any other arrangement. Property purchased during the marriage can be indi - vidually owned, or jointly owned (in indivision). Unless the spouses adopt the community property regime, or unless this is their regime because of the place they were first domiciled after their marriage, each spouse is free to dispose of property without the consent of the other (except for the matrimonial domicile). Monaco respects prenuptial and postnuptial agree - ments. Under the CDIP, spouses are free to choose the matrimonial regime of their first matrimonial domi - cile, the law of one of the spouses’ nationalities, the law of one of the spouse’s domiciles, or the law of the place where they were married. The applicable law can be modified by mutual agreement and under the rules of the law chosen to apply. Monaco prenuptial agreements are signed before one of the three Monaco notaries. They do not provide for capital sums or maintenance to be made in the event
of divorce, as this is considered contrary to public order. 2.5 Transfer of Property Property is valued at the time of transfer (or date of death), so historical value has no relevance, since there is no capital gains tax. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms The transfer of property-holding foreign company shares is exonerated from the tax of 4.75% that is otherwise applicable to any change of beneficial own - er, if this transfer is made to spouses or ascendants/ descendants. 2.7 Transfer of Assets: Digital Assets Email accounts, cryptocurrencies or other tokenised assets would be part of the estate, but there would be no taxation as it would be difficult to qualify them as “Monaco-based assets”. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities Monaco does not have a trust law, but it has long rec - ognised the need for foreign residents whose national laws provide for trusts to be allowed to arrange their affairs by establishing trusts; Law 214 was enacted in 1936 for that purpose, and provides that foreigners with the appropriate nationality, who reside in Monaco, can set up trusts before a Monaco notary. The choice of trustees under Law 214 is limited to corporate trus - tees approved by the Monaco court of appeals. The co-trustees can be appointed together with the cor - porate trustees. If they are not on an approved list of individuals, they may only be co-trustees of one 214 Trust. The law applicable to the trust need not be the law of the nationality of the settlor. However, the CDIP has confirmed that, because of Monaco’s adherence to the Hague Convention on the international recognition of trusts, non-214 Trusts will also be valid, if they are validly constituted under the convention.
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