French forced heirship rules, Regulation (EU) n° 650/2012 and the new prélèvement compensatoire.

French Successions and the drafting of wills with a French element.

The general consensus after the coming into force of the succession Regulation (EU) n°650/2012 was that UK habitually resident individuals could effectively circumvent the French forced heirship rules over French immovables by a will applying English law. That meant that certain issue could be excluded from benefit under a will or succession where they could not have been prior to the Regulation coming into force. Where the British (i.e. English) testator resident in France chose to use English law as the law of his British Nationality to govern his succession, that was also considered possible. However, that was to reckon without the underlying depth and robustness of the French constitution which requires issue to be treated equally and to take equal shares of what is not part of the quotité disponible or free portion with which our Scottish colleagues will be more familiar.

As indicated previously, the French Parliament have now passed the law which now enables not only French resident children to challenge such arrangements, but also children resident in other EU jurisdictions to claim French forced heirship rights over property situated in France irrespective of the law applicable under the Regulation to reacquire or top up their inheritance to a French level.

The Notaire responsible for the French succession has to call each potential heir in and inform them of their rights under the prélèvement compensatoire.

Whilst certain provisions of the law were subject to a review by the Conseil constitutionnel, that body was not called on to rule on the proposed amendment to article 913 introducing this prélèvement compensatoire.

Those who drafted wills intending to oust French forced heirship rules should review these promptly with their clients.

However, it does not end there. Where any client has French situs assets, and has sought to apply, for example Shariah law to their succession, whether by nationality or simply on the basis of habitual residence in a Shari’ah jurisdiction , thus restricting a daughter’s entitlement to one half of that of their their male siblings, a daughter resident elsewhere within the EU or any other sibling can go to France and plead the new prélèvement to have her share increased out of the French assets in accordance with French principles. Indeed the notaire responsible for the succession to the deceased’s assets in France has to call al the heirs in and inform them of their rights in this area.

The same possibility is open to disgruntled issue of British parents who have been effectively disinherited by reference to French standards, provided that they are resident within the EU or if the deceased was resident in the EU (not just France).

My literalist translation of the amendment is as follows:

I. – Article 913 is completed by a paragraph drafted as follows: ? when the deceased or at least one of their children is, at the moment of their death, a national of a Member State of the European Union or resides there habitually, and when the foreign law applicable to the succession provides no reserve mechanism protecting children, each child or their heir or their successors can deduct a compensatory prélèvement on existing assets, situated in France on the day of the death, so as to be re-established in their reserved rights granted by French law, within their limits.?

Whilst spouses are now considered to qualify now as reserved heirs in another category, they do not appear to benefit from the prélèvement. Article 913 is restricted to the extent of Childen's rights, and not those of the surviving spouse. However,its does not seem that a surviving spouse cna qulify as an heir though their deceased child and claim a deceased child's rights under the prélèvement as those matters are dealt with under articles 738 to 738-2 Code civ..

As you can see, it is widely drafted and it only takes one child to be a national of or habitually resident within the EU for the amended article 913 to apply to their benefit and then, apparently, of all.

It does not only apply to immovables, but also to movables such as shares and bonds.

Note that, post Brexit, British children cannot benefit from this prélèvement unless they have a dual EU nationality, live in Europe or finally if one of their siblings is an EU national or EU resident. In other words, beware of disinheriting a French resident child through using the EU Succession Regulation. There has yet to be a preliminary reference to hte CJEU on this new prélèvement.

As ever, I am available for further information or assistance.

Peter Harris

www.overseaschambers.com

+ 44 1534 625879.