HELPLINE: 
Today’s case study spotlights succession laws.
The situation. John and Jane are tax residents in France married under the séparation de biensregime, and each have two children from a previous marriage.
Their assets include liquid investments in assurance vie and a property worth €1 million in southeast France.
They implemented a clause bénéficiaire démembrée for their assurance vie, so the surviving spouse gets the usufruct (allows the spouse to rent out or live in the home for life) while the children retain the nue-propriété (bare ownership, meaning they can’t sell or force a sale while the spouse is alive).
Current outcome. However, if further steps aren’t taken, under French law the surviving spouse would only receive a quarter of the deceased’s half of the property with the rest going to the deceased’s children.
They want to ensure:
- The surviving spouse has sufficient income and can downsize.
- The children of the first deceased inherit their father’s or mother’s share while avoiding dues, like the 60% punitive tax.
Legalities. In France, if an arrangement such as a will or Donation au dernier vivant has not been made, the surviving spouse can only inherit one quarter of the deceased’s estate.
Expert take. To protect the remaining spouse’s financial security, allow for property downsizing and guarantee fair inheritance for the children without punitive taxes, we advised our clients to do the following:
- Register a Donations au dernier vivant: Aka the Donation entre époux, this typically grants a larger part or full usufruct of the estate.
- Add a Clause de remploi des fruits de la vente immobilière: If the property is sold this ensures the proceeds are reinvested in a split-ownership assurance vie, maintaining income for the surviving spouse while preserving capital for the children.
Avoid losing out over inheritance and let us help you hop the hurdles.