Whilst the applicable law relating to succession matters might be affected both by the "domicile" (a complex legal concept under French Law) of the deceased as well as by the country in which assets are found at the date of death, French Law will automatically be applicable to real property (houses, land etc) situated on French territory.
It may therefore be appropriate to envisage a separate will covering those assets which are held on French territory and it would be advisable to arrange for this will to be lodged with the French National Registry of Last Wills and Testaments in order to avoid difficulty in finding it were the person concerned to be living outside France at the moment of his or her death.
It should also be noted that French Inheritance law is notoriously complicated and despite recent changes remains based on fundamentally different principles from those under common-law systems.
Two areas of French Law worthy of particular note are
- first, the fact that it is not possible to disinherit one's children and that all offspring, from whatever current/previous marriage or relationship, must be treated equally in the succession
- second, France has adopted the system of pre-nuptial settlements (in French 'regimes matrimoniaux' or 'contrats de mariage') which determine the ownership of goods, chattels and real property as between the spouses during the course of, as well as after, the marriage.
Inter-vivos gifts and tax issues should also be carefully considered when dealing with the Estate planning of one's French assets and specialist advice should be sought in these respects.
EU Legislation
Recently adopted EU legislation should make it easier to bypass the rules outlined above.
The basic principle is that an EU national living in another member state will be able to choose which of the two countries’ legislation determines the distribution of their estate, by stating this clearly in a will. For example, for British nationals resident in France they will be able to stipulate that they wish to use English or Scottish Law rather than French Law, thereby circumventing France’s strict rules regarding “reserved heirship”.
However, it is our understanding that, in order for the French Government to ratify this new regulation, the constitution would have to be changed, since the automatic right of children to inherit is an element of “public order”. Also, it is expected that France will seek to apply the regulation as restrictively as possible.
In any case, the regulation will not come into force until three years after it has been adopted by the European Council (ie 2015).
The regulation applies only to rules on who can inherit, but does not cover taxation. This means that should you decide to leave assets to, for example, step-children, French inheritance tax would still be levied at 60%. Therefore, whilst this is good news on the face of it, it is not necessarily a panacea and appropriate advice and planning will still be vital.
Also, the regulations will not be directly applicable in the UK, as a result of its right to opt out.