Optimisation patrimoniale et
organisation du patrimoine familial

Estate planning

Preparing for your succession makes it possible to anticipate the transfer of your assets, protect those close to you and limit difficulties that may arise when the estate is settled.

The lawyer can carry out an in-depth wealth audit to analyse your family, wealth and succession situation, while also understanding your asset-transfer objectives. This process makes it possible to identify the mechanisms best suited to your circumstances and assess their legal and wealth-related consequences.

Following this analysis, various solutions may be considered, such as the division of ownership rights, the creation of a family SCI, the drafting of a will or the implementation of gifts.

The aim is to build a coherent asset-transfer strategy, taking into account the composition of the family, the rights of each heir and the protection of the surviving spouse.

Depending on the issues identified, this approach may also include a tax-optimisation dimension, in order to organise the transfer of assets under the best possible conditions, while complying with the applicable legal framework.

Protecting wealth interests in a family context

Asset protection raises different issues depending on whether a person is single, married or in a PACS, with or without children, or part of a blended family.

Each family situation raises specific issues. For example:

• Married couple with no children: protection of the surviving spouse and organisation of the transfer for the benefit of the family's other heirs;

 

• Married couple with joint children: seeking a balance between protecting the spouse and preserving the children's rights;

 

• Married couple with children from different relationships: anticipating the risk of conflict between the surviving spouse and the children and organising the distribution of assets;

 

• Single person without children: choosing the beneficiaries of the transfer and protecting certain relatives or family members;

 

• Unmarried couple (PACS or cohabitation): implementing solutions to improve the protection of the survivor, who is less well protected by law.

The lawyer can carry out a wealth and family audit to identify the issues specific to your situation, assess the risk of blockage or conflict and determine the solutions best suited to your objectives.

Wealth structuring in international cases

The presence of assets located in several countries, an expatriate family, a binational couple or heirs living abroad can raise numerous questions concerning the management and transfer of wealth.

For example, a French national who owns an apartment in Spain, a Franco-Belgian couple married under a foreign matrimonial property regime, or children living in different States will not necessarily be subject to the same legal rules depending on the issues involved.

In this context, the lawyer analyses the international family and wealth situation in order to identify the applicable rules, anticipate potential difficulties and secure the transactions being considered.

This analysis may concern, in particular, the transfer of an international estate, protection of the surviving spouse, organisation of an estate containing assets abroad or the consequences of an international change of residence.

Practical case: Anticipating an estate involving real estate to protect an unmarried partner and reduce inheritance tax

The client is delighted to inform the firm, not without a certain amount of pride, that he has just signed a preliminary agreement for the purchase of a beautiful apartment, for €3.5 million, in a famous and charming little fishing village on the French Riviera.

He explains that his Swiss notary told him that, in order for his partner of more than 30 years, to whom he is neither married nor bound by a PACS, to inherit the property, he needs to make a will stating that he leaves the property to her, which he is about to acquire.

Maître Jean-Michel CAMUS congratulates him and asks whether his Swiss notary informed him that, since the property is located in France, even if he can choose, by will, the law applicable to his succession, the applicable tax law will be French law?

And that, since he is neither married nor bound by a PACS, even though his partner has lived with him for several decades, the French tax authorities will, when the property is transferred from his estate to his partner, claim inheritance tax at a rate of 60%?

The client quickly does the calculation: 60% of €3.5 million = €2.1 million, and replies: “But then, she will have to sell the apartment to pay the tax?”

Maître Jean-Michel CAMUS replies that, indeed, this is what could happen, but fortunately there are solutions to avoid reaching that point.

The client then entrusts LEGALCY with handling the matter, in order to implement a wealth and succession tax-planning strategy using several legal tools, which enable the client:

• to retain management of the property throughout his lifetime,
• with the possibility of selling it and receiving the proceeds at any time,
• and to transfer the property to his partner after his death without her having to pay any inheritance tax.

The tax cost of the transaction will prove to be less than €100.

Thanks to the advice of Maître Jean-Michel CAMUS, a lawyer specialising in family, personal and wealth law, the saving achieved on the inheritance tax that would otherwise have been payable was therefore approximately €2.1 million.

This situation clearly demonstrates the value of preparing the legal arrangements before completing a property acquisition, in order to avoid having to pay exorbitant inheritance tax when the time comes, while ensuring full legal and tax compliance.

It should not be assumed that the benefits of this wealth and succession planning are reserved for foreign residents; they are equally important and work in the same way, with the same benefits, for French nationals and French residents.

Indeed, it is enough to consider the inheritance tax rates applicable in France, including for the closest family members, namely direct descendants—the children—who are, in the vast majority of cases, the heirs. This applies regardless of the heir's nationality or country of residence, provided that the estate assets are located in France.

After an allowance of €100,000 per child, provided that it has not been used during the preceding 15 years, inheritance tax is progressive; in 2024, it therefore increases by brackets from 5% to 45%, with the following thresholds:

Up to €8,072	5%
€8,073 to €12,109	10%
€12,110 to €15,932	15%
€15,933 to €552,324	20%
€552,325 to €902,838	30%
€902,839 to €1,805,677	40%
Over €1,805,674	45%

Thus, to give a concrete example:

If a property valued at €650,000 belongs to only one of the parents, for example because that parent acquired it alone under a separation-of-property matrimonial regime, and transfers it to the couple's only child; at the time of death, assuming no gifts have been made during the preceding 15 years; the taxable amount will therefore be approximately €550,000, resulting in inheritance tax of €108,600, representing an average tax rate of 19.75%.

For a direct-line heir, this amount, relating to the transfer of an asset acquired through the owner's work, the income from which was itself taxed through personal income tax or tax on investment income throughout the owner's lifetime, may appear very substantial, especially since it is possible, by making the right decisions, to reduce it to zero.

Just as with inheritance tax for collateral relatives, which is much higher (35% and 45%), or even for a person with no family relationship (60%), there are entirely lawful solutions, available to French citizens and foreigners alike, that can drastically reduce this tax or even eliminate it completely.
A large number of legal tools can and should be put in place to achieve this.

It is obviously important to do so as early as possible, and potentially even before acquiring the asset or assets intended to be transferred.

This is why it is desirable and recommended to carry out wealth and succession planning operations as early and as quickly as possible.

Our firm, which specialises in family, personal and wealth law and practises in particular inheritance law, is fully able to assist and guide you safely and with a clear understanding of these steps.

Our firm's daily practice in family and inheritance litigation places us in a particularly strong position to understand the limits and potential dangers that may result from the use of poorly controlled legal techniques.

This is an additional asset offered by our firm to its clients.

Every family situation has its own particularities and requires an in-depth, personalised assessment. Our team will be delighted to assist you with these specific legal issues; please do not hesitate to contact us!