8. Joint Ownership of French Property

1. Joint Ownership 'En Indivision'
2. 'En Indivision' for Married Couples
3. 'En Indivision' for Unmarried Couples/Groups
4. Joint Ownership 'En Tontine'

8.2. Married Couples and 'En Indivision'

In relation to inheritance rights the effect of indivision has historically been a problem for surviving spouses of a marriage, who risked having to sell the marital home at the bequest of other inheritors entitled to a share of the estate of the deceased!

However, the situation has improved in recent years, to the extent that the surviving spouse is now afforded a large degree of protection.

Although under French laws they may not inherit all of the property on death of their spouse (as children are protected heirs), they are entitled to remain in the property for the remainder of their life, provided it is their principal home, whatever the proportion of the property retained by them on inheritance.

If the deceased has children by a previous relationship they are entitled to share in the inheritance of the property, in the same manner as children from the present marriage. This can sometimes be a source of conflict between family members, although it does not necessarily weaken the legal position of the surviving spouse.

Whilst there is no inheritance tax liability between man and wife, there is a potential liability on that part of the estate inherited by the children. However, the tax allowances available to children are generous, so this is only going to be a problem for those with substantial wealth.

Accordingly, purchase en indivision makes sense for most married couples, particularly if accompanied by entering into a French marriage contract, called régime de communauté universelle with the clause d’attribution intégrale.

This marriage contract is only available to those who are resident in France.

Under the terms of this marriage contract, the whole of the estate of the deceased spouse passes to the surviving spouse, or at least that much of the estate that you wish to include within the marriage contract. Such a contract does, however, reduce the inheritance tax allowances that are granted to your children.

Another problem with this solution is that if you have children by a previous relationship a French marriage contract has the effect of disinheriting children from outside of the relationship, not blood children of the final deceased.

For this reason most notaires are reluctant to allow a couple with children outside of the relationship to enter into such a contract. Indeed, a notaire is obliged to notify children not of the issue, who then have right three months to contest the proposed change of marriage regime. If the children oppose the change, then it would be necessary to bring the matter in front of a court of law, and for a judge to determine if the change was in the best interests of the family.

If the notaire proceeds without notifying the children, the latter can later bring an action in the courts to obtain an annulment of the change, or seek a proportion of the inheritance if they do not become aware until after the death of their parent.

Nevertheless, it is possible for a child from a former marriage to renounce their right to bring an action for retrenchment, but retain their rights to an inheritance, which they would receive on the death of the surviving spouse, in the same manner as children from the existing marriage.

Accordingly, you may need to adopt a marriage contract in tandem with a Family Inheritance Pact (called a pacte successoral,) something you can discuss with your notaire.

Alternatively, you should consider purchasing of the property through a French property company, particularly if you are non-resident.

Finally, since August 2015, a European law has made it possible to avoid the entrenched inheritance rights of French law altogether and, through a Will, adopt the inheritance laws (but not taxes) of your home country. However, in 2021 the French government passed a law that conflicts with this right, re-establishing the rights of hiers, so you need to discuss this with your notaire and solicitor. You can read more at French Inheritance Law Under EU Investigation.

If, by contrast you wish to buy property with children you can do so using a split ownership structure called démembrement de propriété. You can read about this structure at How to Transfer French Property to Children. See also How to Reduce the Cost of an Inheritance.

Next: 'En Indivision' for Unrelated Persons

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