Coronavirus - How can you help a loved one get through the crisis?

The sudden outbreak of the coronavirus is perhaps prompting us to speed up certain decisions. For example, the decision to transfer part of your estate to your loved ones, which not only activates generational solidarity, but also enables you to benefit from tax deductions. Now is the time to think about the different ways of giving while preparing your estate.

1st solution
Gift of money

More often recommended as an emergency solution, the manual gift stands out for its ease of implementation, as it does not require written registration. This excludes real estate, for which a notarial deed is mandatory. It therefore only concerns movable property (money, jewelry, cars, shares, etc.). It offers the advantage of being able to pass on up to €31,865 every 15 years without paying tax. Although manual gifts must be declared to the tax authorities, they are not subject to tax.
However, this practice must be transparent to the family. As a result, the donee is obliged to report the donation to ensure equality between heirs, since it must not be a means of giving an heir an advantage. It should be noted that, unlike a shared donation, a manual gift must be revalued on the donor's death.
To make an informed decision, a meeting with your notary will help you find the best way to donate. However, it is preferable to draw up a notarial deed in order to specify certain conditions of the donation - this is not possible with the tax form - and thus to make a "tailor-made" donation.

2nd solution
Shared donation

A genuine asset management tool, the shared donation can also be used in emergency situations such as the one we are experiencing with COVID-19. It makes it possible to divide all or part of one's assets among one's heirs, the donees, who then have an immediate inheritance. However, the donors can retain the use of the assets by reserving the usufruct, for example. As a shared gift must be drawn up in a notarial deed, a notary is required. It offers the advantage of not harming any of your children, as :

- it allows you to organize the distribution between children as you see fit, in the knowledge that each must receive his or her share as stipulated by law;
- it avoids the difficulties and family disputes that can arise when settling an estate, by facilitating the allocation of assets.

Shared gifts can also be made in joint ownership when several beneficiaries receive the same property. Each child then has a share in the property.

It offers the same tax allowances as "simple" donations. This means that up to €100,000 per child and €31,865 per grandchild can be transferred every 15 years. Another advantage is that the value of the property taken into account in a shared gift is that of the day the notarial deed is drawn up.

3rd solution
Temporary gift of usufruct

Assets generate income that could be very useful to the children, while the parents can temporarily do without it. With a temporary gift of usufruct, the owner (donor) gives the right to use and receive the income from an asset to a named beneficiary (donee), for a set period of time. The donor retains bare ownership of the property, but is released from its management.
At the end of the temporary gift of usufruct, the donor becomes the full owner again, and the usufruct reverts to him/her without any formalities.
A temporary gift of usufruct can also be advantageous in terms of income taxation, if the donated property generates income. In this case, the income is taxed in the hands of the donee and no longer in those of the donor.

Christophe RAFFAILLAC