How the Donation Graduel Can Support Succession

A Strategy for Spousal Protection and Inheritance Security

The situation. Ralph and Susan* are a married British couple living in France and are French tax residents. They own a property in Paris, each holding a 50% share. 

As they married in the UK, their default marital regime under French law is séparation de biens, so their assets remain individually owned. Susan has two children from a previous relationship, while Ralph has none.

Succession goals. They want to ensure mutual financial protection by:

• Allowing the surviving spouse to continue living in their Parisian home.
• Guaranteeing that Susan’s children will inherit her share of the estate, even if she predeceases Ralph.
• Ensuring Ralph’s assets pass entirely to Susan.

Two-part solution. We employed a two-part testamentary strategy:

1. Ralph leaves 100% of his assets to Susan, ensuring she inherits his estate in full.
2. Sue establishes a donation graduel to Ralph so he is obligated to pass Susan’s share equally to her two children upon his death.

A donation graduel is a French inheritance mechanism ensuring assets pass first to a surviving spouse but later transmitted to a specified second beneficiary. 

Takeaway. This will result in financial security for Ralph during his lifetime and inheritance protection for Susan’s children.

*Names have been changed for confidentiality.