Which law applies?
If a German testator lived in France and owned real estate and bank accounts there, French law may apply to the succession.
If the succession took place before 17 August 2015, two successions are usually required: one in Germany, one in France. Since 17 August 2015, the European Inheritance Law Regulation has been in force, according to which inheritance cases are generally to be assessed uniformly.
The EU Inheritance Regulation provides that the succession shall be settled according to the law of the country in which the deceased had his or her last habitual residence. Where the specific objects of the estate are located is not of importance.
Nevertheless, the testator has the possibility to determine the application of the law of his or her home country. In the case of multiple citizenship, the testator has the choice between the two countries.
Legal succession in France, Art. 734 ff. Code Civil
- order: descendants of the deceased (legitimate, illegitimate and adopted children).
- order: parents and siblings of the deceased
- order: ancestors of the parents
- order: side relatives
French inheritance law grants a legal right of inheritance to the surviving spouse. Registered partners can only inherit from their partner by will.
If the deceased was married and childless, the surviving spouse inherits ½ and the parents ¼ each. If one parent is predeceased, the spouse inherits his or her share. If both parents are predeceased, the joint estate falls to the surviving spouse (Art. 757-1 and 757-2 Code Civil).
If the deceased was unmarried and childless, but still has parents and siblings, the parents inherit ¼ each, the remaining half is divided equally among the siblings. If only one parent is still alive, he or she inherits ¼ and the siblings share the remaining ¾ (Art. 738 Code Civil).
If the deceased leaves his spouse and joint children, the surviving spouse may choose between usufruct of the entire estate or ownership of ¼ of the estate. If the children do not result from the marriage to the surviving spouse, the spouse receives ownership of ¼ of the estate (Art. 757 Code Civil).
If the deceased was unmarried and childless, the deceased’s parents and siblings inherit in equal shares. If the deceased leaves neither siblings nor descendants, both parents each inherit ½ of the estate (Art. 736 Code Civil). If the deceased’s parents are predeceased, his siblings and their descendants inherit in equal shares (Art. 736 Code Civil).
Under certain circumstances, descendants are deprived of the right to inherit by operation of law, e.g. in the case of (attempted) murder of the testator (cf. Art. 726, 727 Code Civil).
Settlement of the estate
Unlike in Germany, in France notaries are responsible for settling the estate. They are mandated by the heirs and take care of listing the assets and debts, certify an “acte de notoriété” (certificate of inheritance) according to Art. 730-1 Code Civil and submit the inheritance tax return to the tax office of the deceased’s last place of residence.
As soon as the estate has an international connection (e.g. real estate, bank account abroad), the notary will issue a European certificate of inheritance so that the heirs can also prove their legal status outside France.
If the succession is settled according to German law, the heirs must apply for a European certificate of inheritance at the German probate court and present it to the French notary. Only then can the property be transferred or access to the bank account be made possible.
French inheritance law also grants a claim to the compulsory portion (so-called “réserve héréditaire”) to certain persons who have been excluded, e.g. due to a will or inheritance contract.
Only descendants and the spouse of the deceased are entitled to the compulsory portion.
The compulsory portion of the surviving spouse amounts to ¼ of the estate assets if there are no descendants.
The compulsory share of a child amounts to ½ of the estate; with two children 1/3; with three children ¼.
Caution: a waiver of the compulsory portion by an heir is inadmissible under French law!
Real estate located in France is always subject to French inheritance tax, regardless of which law is applied to the inheritance.
As in Germany, the tax-free amounts depend on the degree of relationship to the deceased.
Allowances between spouses: tax-free!
Allowances between parents and children: € 100,000 for each inheritance per inheritance or gift every 15 years.
Allowances between siblings: € 15,697
Allowances in favour of nieces/nephews: € 7,849
In Germany, the tax allowances are usually more generous than in France!
Allowances between spouses: € 500,000
Allowances between parents and children: € 200,000 for each inheritance per inheritance or gift every 10 years
Allowances between siblings: € 20,000
Allowances in favour of nieces/nephews: € 20,000
In order to save taxes on international inheritances, legal advice on the choice of law is indispensable. Our international team will be happy to assist you in structuring your estate.