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Revising the reserved portion of a death estate : the family agreement

01.18.2017

By entering into a family agreement, a child may henceforth agree in advance to waive all or part of the inheritance that they expect to receive from their parents.

This is a legal scheme which makes it possible, for example, to favour a disabled brother or sister 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?

    • 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 instrument 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) or 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.

Namely

Do not hesitate to consult your notaire. They can give you useful information about how you may benefit from a family agreement in the light of your situation. They can explain the effects and, where appropriate, will draft the document for you.

See also
29.11.2016
The letter of the notaries of France in the world / November 2016
25.01.2017
French property market report / N°34
congres_notaires_europe_cnue_2017
22.09.2017
4th Congress of the Notaires of Europe
02.10.2017
Conseil du coin : meet a french notaire to a cafe !