It depends. With careful lifetime planning there are ways of ‘cutting-in’ a spouse to children’s
shares and you can usually sell your French estate or leave it to your family in a trouble-free and
tax-efficient way when you die. In many cases a simple and cheap solution is to make a French will. Your
English or other will should also be reviewed at the same time. If you do not have a will, French law makes
almost no provision for a widow(er) or surviving partner. Depending on your will, the property will usually go
to your children (but not your spouse) or if you don’t have any, to your siblings and parents.
Some cases require additional or more complex solutions but, whatever your needs, prevention is
always better and cheaper than cure. For example, it is also possible to get round French succession rules if
you are buying property jointly. When you bought your house in England, you probably bought it jointly with
your husband or wife. Your solicitor will have explained to you that there are two ways of owning property
jointly. One is that on your death the property passes automatically to then survivor (in English “joint
tenancy”, in French en tontine) and the other is that each of you own a part of the property which you can
deal with separately (in English “tenancy in common”, in France en indivision). You probably chose the former
method and your solicitor would probably have been very surprised if you had chosen the other method. In
France, the same two ways of jointly owning property exist, though for quite different reasons. The French
almost always use the en indivision method for the very reason which makes it usually disastrous for the
English to do so: it does not avoid the normal French succession rules. The English should (subject to advice)
always buy en tontine which is how they would buy in the UK and the property will pass automatically to the
survivor. A carefully worded tontine clause must appear in the deed of conveyance and cannot be inserted
after completion of your purchase.
It is quite impossible to say how many English husbands and wives who have not been properly
advised on this point are horrified to learn that they have made the wrong choice. In fact, usually they have
not made a choice at all but have signed papers prepared by a French notary who assumes that English law
is the same as French law and that all English couples buy jointly in the same way as French couples.
Usually, it is far too late to do anything about it except at great cost. If you are buying jointly, get advice
from a lawyer who knows English and French law and who, if the circumstances require, will ensure that the
notary does the right thing.
It is worthwhile giving an example so that you may see how important this is. Remember that if
you are not prepared for it, the problem will arise just at the moment when one is least able to cope with it
i.e. on the death of a husband or wife. Take the following situation, which is not unusual.
Mr and Mrs A are married and are UK domiciled. They have one child by their marriage. Each has been
previously married. Mr A has two children by her previous marriage and they now live with their mother who
has remarried. Mrs A had one child by her previous marriage who lives with Mr and Mrs A. Some of the
children are under 18 and some are older. Mr and Mrs A have bought a holiday home in France for FrF
750,000. They have bought it by the standard French method of joint ownership (en indivision). Mr A dies.
Mrs A owns one-half of the house as her own property. Three-quarters of Mr A’s half share is divided among
his three children (by his existing and previous marriage) and one-quarter goes, if his will says so, to Mrs A.
At best, therefore, Mrs A has five eighths of the house and her joint owners now include children whom she
may never have known and with those of whom are under 18 she can come to no legal arrangement.
It is true that arrangements can be made so that Mrs A can be given a life interest in her husband’s
share so that she would own one-half outright and one-half she can use for as long as she lives. This is,
however, hardly a situation which Mrs A wants to learn of for the first time on the death of her husband, She
may well have assumed that because her husband’s will in England leaves everything he has to her, she now
owns the whole of the house. She is mistaken, however, because French law overrides that will.
If Mr and Mrs A had bought en tontine none of this would have happened. On the death of one of
them, the French realty would automatically have passed to the survivor.
It is true that the tontine method of joint ownership may involve the payment of French inheritance
tax, whereas the indivision method might avoid it. However, the amounts involved are usually only a small
price to pay to avoid the confusion caused by the imposition of the French law of succession.
There are French notaries and others who say that there are dangers in using the tontine method
because children who have been ‘cut out’ can claim to be ‘cut in’. Take courage from some recent cases on
this point which say that it is almost impossible for children to succeed if care is taken and the
documentation is correctly prepared. This applies to any Power of Attorney given by the buyer and to the
deed of conveyance itself. It is worth taking the right advice to ensure that this happens.
Please remember that the above examples may not give you a complete overview of your own personal
circumstances and you may therefore miss out on putting the appropriate structure in place thereby
jeapordising your heirs and relatives’ wealth and rights.