French inheritance law specificities and family agreement
With a family agreement, a child may agree in advance to waive all or part of the inheritance from their parents. This is a legal scheme which makes, for example, to favour a disabled heirs in a difficult financial situation.
What is a family agreement?
Children are entitled to inherit a reserved portion of their parents' estates on death [héritiers réservataires]. Because of this, they are entitled to a minimum share of their parents' death estates. They may not, in principle, be deprived of this. Therefore, if the parents make gifts or stipulate legacies that will infringe this reserved portion, the children may, when the succession is opened, cause such gifts or legacies to be reduced in order to protect their share.
Since 2007, family agreements have enabled heirs entitled to a reserved portion to waive, in advance, their right to bring an action seeking a reduction of prior gifts or legacies. Until then, a protected heir could not take action of this kind. Any such waiver was seen as an agreement on a future succession, which was prohibited under French law.
What are the effects of a family agreement?
Thanks to this innovation, a donor has more freedom to dispose of their assets to individuals of their choice (surviving spouse, other child, third-party, etc.), as they may make gifts without fearing that this action will be challenged. However, the waiver has no effect on the entitlement to inherit of the person who has waived their right, who continues to be able to inherit other assets from the donor or the legatee, in accordance with their rights.
Agreements of this type also allow for gifts to be made directly from grandparents to grandchildren.
How is such an agreement made?
A family agreement has to be recorded in an authentic deed signed by two notaires. The instrument must expressly state the name of the beneficiary of the waiver and mention all its legal consequences.
Furthermore, the consent of the person who is waiving their right and of the donor are essential. The renunciant must not be an emancipated minor, a minor under guardianship (unless he is assisted by his guardian) or under guardianship (unless authorized by the family council).
The person who makes the waiver has a great deal of freedom:
- the waiver may concern a gift that affects the whole of the reserved portion (in which case the person waiving their rights agrees to lose all their rights)
- the waiver may concern a gift that affects only a fraction of the reserved portion (one half, one quarter, etc.).
- the waiver may even only relate to the reduction of a single gift involving a specific asset.