You are now the proud owner of a holiday home in France. You have bought it for the family to use and you would like to pass it on to your children, once both of you have died. You have made Wills in England leaving everything to each other and then on to the children, so you’re covered, aren’t you?
No. You have a problem.
Land and houses in France are subject to French law and you cannot override the French inheritance rules in an English Will. Any bank accounts or other money you have in France can be dealt with under your English Will, as can the furniture and household contents in your French home. But in most countries, the inheritance of land and houses is subject to the law of the country concerned. In France this means that your house is subject to the forced heirship rules, and certain members of your family are entitled to part of your estate regardless of what you have said in your Will. The forced heirship rules apply even if you don’t want to leave anything to a particular relative. You will probably be surprised to learn that the list of relatives who are entitled to a share of your house does not include your husband or wife.
If you have children they are entitled to a share of your interest in the house. One child gets half your share. Two children get one third each. Three or more children share three-quarters between them. Children include children from any previous marriage and any born outside marriage even an accident from your youth. You can only leave the remaining one-half, one-third or one-quarter (as the case may be) to your spouse.
You also need to bear in mind that French inheritance tax is payable. In France it is a true inheritance tax which is charged on the people who inherit a share of your estate. The amount of tax depends on how closely related the beneficiary and the deceased are, and there is no spouse exemption.
There are steps you can take to protect your spouse’s position after your death, but you should take advice before you complete your purchase. For further information and advice please contact our City Centre office.