Changes to the possibility of electing English Law to apply to your French Estate
Since 17th August 2015, it has been possible for English homeowners to choose that English law applies to their French property only (if not resident in France) or French Estate (if they live in France on a permanent basis).
This is because of the EU Succession Regulation which was designed to unify International/cross border’s probates. Although the UK opted out of this Succession Regulation (and has since left the EU), because France is part of it, you can choose that English Law applies to your French Estate.
This possibility to choose English Law simplifies the situation of many English nationals whose preference is that their surviving spouse inherits the French property before their children. Effectively, by electing English Law to apply to their French Estate, they avoid the French rule in which children are reserved heirs and entitled to inherit a portion of their deceased parent’s French estate (one half for one child, two thirds in equal shares for two children, three quarters in equal shares for three children or more).
Thus, for the last six years, it has been possible for British nationals to elect the law of their nationality to apply to their French Estate.
However, French legislators have been worried about the risk of discrimination for women, if the law chosen allows to advantage sons over daughters simply based on their sex.
To prevent the risk of sexual discrimination, a new Law was voted in France on the 13th August 2021 and will come into effect at the end of 2021/early 2022 to limit the application of the EU Succession Regulation.
This limitation to the EU Succession Regulation will only be applied if two conditions are fulfilled:
- The testator/deceased or one of the children is domiciled/resident on a permanent basis in France or another EU country;
- And that the Law chosen does not have a forced heirship rule (which is the case with English Law).
This means that if you, or one of your children, are living on a permanent basis in France or another EU country, the effect of electing English Law to apply will be limited.
What is the new the Regulation?
The new regulation enables a child to challenge their parent’s Will if it disinherits them or leave them a smaller portion than they are entitled to under French law. This form of compensation can only apply to assets located in France.
In practice it means that if an English national or their children, live in France or elsewhere in the EU on a permanent basis, the application of English Law to their French Estate will be partially ignored so that their children inherit the portion they are entitled to under French Law.
If you or your children do not live in France or the EU, then the EU Succession Regulation will still apply, and you can successfully elect English Law to apply to your French property.
What could this mean to me?
This has the potential to make French Estate planning more complicated. However, there are still ways to avoid having French Law apply to your French Estate. Hence the importance of receiving French Estate planning advice from a specialist French property lawyer, to ensure you choose the best option for your personal circumstances and wishes.
Furthermore, although being able to choose English Law to apply to your French Estate means it passes to the person you wish to, it does not avoid French inheritance taxes. If you are leaving your French estate to someone you are not married to, nor is your Civil Partner, nor blood related, this person will be responsible for an excessive amount of French inheritance taxes (60% after a very small tax allowance of 1,594€).
What should I do? Thus, it is more important than ever to receive appropriate French Estate planning advice for your French property, which is something French Property Legal Services can guide you through to help you make the right choice.
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