A Challenge To French Succession Planning? Key Takeaways For Those With Assets In France

• Published date: 19 December 2022
• Subject Matter: Family and Matrimonial, Wills/ Intestacy/ Estate Planning
• Law Firm: Weightmans
• Author: Joshua Ryan

For UK-based advisors, there are a number of considerations that must now be taken into account in order to ensure that clients are properly advised.

In November of this year, the German Supreme Court made a shock decision that impacts on cross-border European estate planning. They ordered that even when an election has been made to apply foreign law to assets situated in Germany (as is permitted under European legislation), in some cases, German succession law would still apply to German situs assets. This ruling contrasts with the position as set out in the European succession regulations.

This follows on the back of the promulgation of France's loi républicain law year - this law affects those with assets based in France. We have looked back at that law and consider that for UK based advisors, there are a number of considerations that must now be taken into account in order to ensure that clients are properly advised (I have dealt with these considerations below) and for those new to French succession law, I have briefly summarised how the law developed.

Brief history of French succession law

Prior to the French Revolution, different laws governed inheritance in France: the South of France applied le droit écrit (written law derived from Roman law) whereas the north of France applied le droit coutumier (generally non-written, customary law). Primogeniture (ie the devolution of the entire family estate to the eldest son) prevailed in France as in elsewhere in Europe.

During the French Revolution, succession law was harmonised and following the creation of the Code Napoleon (a codification of French civil law), France aimed to regulate the distribution of estates on death to ensure that children of the deceased each receive a minimum share of the estate (collectively defined as la réserve héréditaire). La réserve héréditaire is subject to the wishes of the deceased's spouse (for the most part, the deceased's spouse can either take a usufruit over the estate - this is the right to 'enjoy' the assets of the estate during their lifetime (which delays the distribution of the estate) - or to take a portion of the estate outright with la réserve héréditaire passing to children at that point). A person would only be able to distribute a portion of their estate (la quotité disponsible) to whomsoever they want under the terms of their will. This forced heirship regime inserted the Enlightenment principle of equality between the sexes into French succession law.

...