Married couples with children from previous marriages buying a house in France always face the problem of the rules of reserve under French Succession Law.
The reserve provides that children are entitled to a share of their deceased parents’ estate. One way to ensure that the survivor will inherit the property is for the couple to buy it with what is called a tontine clause in the Deed of Sale. This says that on the death of the first to die the survivor be deemed to have been the sole owner from the original date of purchase.
This results in the children of the first to die being disinherited and the children of the survivor inheriting the whole estate on the death of the second to die. Clients generally do not want this to happen. An alternative solution is for the couple to change their marriage regime by adopting that known in France as Universal Community.
However the disadvantage of such a change is that any child of the first to die could apply to set aside that change of matrimonial regime on the grounds that they had thereby been disinherited. Many notaries refuse to receive a Deed of Change because of the risk of an application to the court to set it aside and a claim against them for professional negligence.
From the 1st January 2007, French law has modified the harshness of these rules to implement a recommendation made by the notaries in 1975.
The new law permits children who might have the right to apply to the Court to set aside the change of regime to renounce their inheritance in favour of a named beneficiary before the death of the parent from whom they would otherwise inherit under their reserved rights. The object is to provide security for the bereaved party in the matrimonial home in France.
We will be reviewing this issue in more detail in future issue.
Graham Platt is a Partner in The International Law Partnership LLP
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