Parental Inheritance: Can Parents Revoke Inheritance for a Sibling or Grandchildren?
In the "Great Savings Rendezvous" (our site), Nathalie Couzigou-Suhas, a Parisian notary, and Guillaume Berthiaux, president of Sofidy Private Management, tackle common financial quandaries alongside Stéphane, a man estranged from his family.
(This article is brought to you by Quentin Bas Lorant, Journalist at our site.fr, published on [date])
Today, Stéphane brings up a concern: Can his parents, through a will or a life insurance clause, favor his sister or certain grandchildren, leaving him out?
Marital donation: Keeping Heirs in the Dark?
The marital donation, or survivor's donation, may be one method Stéphane's parents can use. This type of donation empowers the surviving spouse to make the most beneficial choice at the time of their death by opting for the usufruct of the entire estate (freezing the children's share until the spouse’s own death or sale by mutual agreement). Nathalie Couzigou-Suhas, the Parisian notary, reminds us, "This does not mean that Stéphane is cut off from his inheritance entirely."
By Will or Life Insurance, Stéphane Can Fall Behind
When it comes to unequal distribution among heirs, the situation is more complex. According to French law, it is not possible to fully disinherit a child. Each child is a reserved heir, and in Stéphane's case with a sister, the reserve accounts for two-thirds of the estate, divided equally. The remaining third, known as the available quota, can be given to other children or grandchildren as the parents see fit. Nathalie envisions a scenario for Stéphane, "Your parents could leave two-thirds of the estate to your sister, with the remaining third going to you or certain grandchildren."
Things become complicated with life insurance, as it operates independently of the hereditary reserve—except in cases of abuse. Guillaume Berthiaux, president of Sofidy Private Management, warns, "With this tool, a grandchild or a single child can be favored, providing that no excessively high premiums are paid."
Beware of potential inheritance rights on the bare ownership, which Stéphane may be liable for: "If the value of the assets surpasses the legal allowances, the beneficiaries will have to pay taxes, even if the usufruct is retained by a third party," Guillaume notes, offering a glimmer of hope, "Fortunately, as Nathalie Couzigou-Suhas reminds us, 'the tax administration allows for payment deferral with interest, until the death of the usufructuary.'"
Can the Marital Donation be Contested in Divorce Cases?
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Discover their publications Around this article * The Great Savings Rendezvous * Life Insurance * Inheritance ** Will
Note: French inheritance law has specific regulations that curb a parent's ability to favor certain family members when distributing assets. This rigorous system of forced heirship (réserve héréditaire) protects close family members, primarily children, from disinheritance or unequal treatment by ensuring their reserved share in the estate. In reality, a parent cannot fully override these protections without risking legal challenges and potential redistribution orchestrated by courts. These laws keep a minimum guaranteed share for reserved heirs, regardless of a parent's wishes.
- In the realm of wealth management and personal finance, one might question the implications of using a marital donation for unequal distribution among heirs, as it could potentially leave certain family members, like Stéphane, with a smaller inheritance.
- Pursuing education and self-development in the field of finance and investment could equip individuals with the necessary knowledge to understand complex financial matters such as the use of marital donations, life insurance, and the implications of inheritance in various family circumstances.
- During career development, financial advisors and wealth managers could benefit from gaining a deep understanding of the intricacies of inheritance laws in countries like France, allowing them to provide comprehensive advice and guidance to clients who are facing similar scenarios as Stéphane.
