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Protecting my spouse

Spousal protection is a growing concern. With increasing life expectancy, the fear of expensive dependency and the growing number of blended families, this issue has become a priority for many people.
It should not be forgotten that, in the absence of marriage, the surviving cohabitee does not inherit from the deceased. Cohabitation has no legal recognition, and in the event of separation or the death of one of the cohabitants, the situation can quickly become complicated.

Once this has been established, the first thing to do may be to consider a Pacs, which is more protective than cohabitation, especially if it is accompanied by a will. And even with this precious document, the room for manoeuvre is more limited than for married couples. The effects of the will will be limited to the "ordinary" available share (the minimum, as it were), whereas in the case of marriage, this share can be "enlarged". This is why you need to be very careful when drawing up your will, and not hesitate to seek advice from a notary to protect your partner effectively. It is also a good idea to make a donation. In the same way as married people, PACS partners can make gifts to each other in a deed separate from the PACS agreement. Such gifts are irrevocable, even if the Pacs comes to an end.

To be sure of protecting your other half as much as possible, it's best to think about marriage. Although marriage is a good option, you should also be careful when choosing your matrimonial property regime if your family situation (previous marriage with children, etc.) or professional situation (liberal profession, company director, shopkeeper, etc.) is likely to weaken the surviving spouse's material comfort. If one of the spouses works in a high-risk profession where he or she could be held liable for the entire joint estate, it's best to opt for separation as to property. The debts of the spouse exercising a risky profession will not be passed on to the other, who will remain protected from his or her spouse's creditors. For blended families, it is also advisable to avoid confusion of assets to simplify estate management and protect children from conflict.

And if the system you chose at the start of your relationship no longer suits you, don't hesitate to change it. Especially since the procedure has been simpler and faster since 2019. You no longer have to wait two years to reverse your initial decision, as was previously the case. If there are minor children, the change of matrimonial property regime no longer has to be approved by a judge. It is up to the notary to refer the matter to the judge if he considers that the interests of the children need to be safeguarded. If there are adult children, they are informed of the change of matrimonial property regime and have 3 months to oppose it.

An inter-spousal gift (also known as a "last living gift") completes these preventive measures. It gives your spouse an advantage over other heirs, by increasing his or her statutory share of the inheritance. This is indeed somewhat limited. In the case of joint children or children from a previous marriage, the surviving spouse is entitled only to a share of his or her spouse's assets. Similarly, the surviving spouse is only entitled to half or three-quarters of the estate if one or both of his or her parents-in-law are still alive. A last living gift offers the surviving spouse a greater choice, and legally increases his or her share of the estate.

Real estate: an essential part of a well-managed estate plan

Real estate gives your loved ones the assurance of owning a valuable asset, which they can then resell or rent out. In turn, this financial security will enable them to move forward with peace of mind and make plans for the future. Real security in the event of personal difficulties or economic crisis!

I invest for peace of mind

To cope with the vagaries of the health crisis, which seems set to last, the search for security has become the watchword for many. And what better sector than real estate to respond to this quest for stability and profitability? Unlike financial and stock market investments, the immediate return on such an investment is that you become the owner of a real asset, unaffected by market volatility or a downturn in stock market prices. Becoming a homeowner has always been a lifelong project for many people. This is even more true today, with the quest for a house or apartment, preferably with terrace or balcony, far from the big cities.

So don't hesitate to take the plunge. Especially since interest rates are still low, and the public authorities are helping to finance your project. Especially if you're a first-time buyer, thanks in particular to the Prêt à taux zéro ( PTZ). This means-tested loan, with no application fees or interest to pay, will save you a lot of money. It can only finance part of the real estate transaction, and is therefore complementary to another source of financing (bank loan, personal contribution, social housing loan, etc.). The amount of the PTZ varies according to the zone in which the property is to be built or purchased.

You're already a homeowner. Why not turn to rental investment, while at the same time benefiting from tax-free rental income? This is the opportunity offered by the Pinel scheme. It allows you to benefit from a tax reduction of 12, 18 or 21% of the purchase price of a new property, depending on the length of the rental commitment (6, 9 or 12 years respectively). The only conditions are that you choose a property located in a "zone tendue" (i.e. where rental supply is lower than demand), and that you comply with certain rental and income conditions. As long as you choose the right geographical area and location, you can expect a return of around 7%, with an affordable purchase price and rising rents.

Our advice

Before making any decisions, take stock of your family and asset situation. Identify your objectives, then determine the right strategy. With the help and advice of your notary, of course!

Protect your loved ones with foresight

Protecting your loved ones or benefiting certain ones, limiting inheritance tax, securing the transfer of your business, preserving family harmony... these are just some of the reasons why you should think ahead about your succession. It's the best way to preserve your family. With the help of your notary, of course. Because there is no general solution. In this area, everything is tailor-made.
Perhaps now is the time to consider making a gift to your children. That way, you won't have to apply the letter of the law when it comes to inheritance, which may not be what you want for your heirs.
If you want to help all your children, without harming any of them, a shared gift is the ideal solution. It avoids the difficulties and family disputes that can arise when settling an estate. It also facilitates the allocation of assets in accordance with the donor's wishes and the needs of each child.
Anticipating the succession is also an opportunity to reduce your tax burden. For example, if you plan to make a gift to your children, an allowance of €100,000 will apply. For grandchildren, it's €31,865. And you can repeat the operation every 15 years without incurring a single cent in inheritance tax. Don't forget life insurance. This allows you to pass on capital to one or more designated beneficiaries under particularly advantageous tax conditions. In fact, life insurance is exempt from inheritance tax as long as the amount passed on does not exceed €152,500 and the premiums are paid by a policyholder under the age of 70. In other words, if you pay into yourlife insurance policy before the age of 70, each beneficiary (other than your surviving spouse or civil union partner, who are exempt from inheritance tax) can receive up to €152,500 tax-free. Beyond this sum, the surplus is taxed at a rate of 20% up to €700,000 per beneficiary, then 31.25% beyond that. For amounts paid in after age 70, a one-off allowance of €30,500 applies, regardless of the number of beneficiaries. Beyond that, the capital paid in is added back to the estate assets. However, capitalized interest is exempt.
If you own a company and wish to pass it on to your descendants, you can use the Pacte Dutreil during your lifetime. This enables you to pass on shares in a company while benefiting from a tax exemption equivalent to 75% of the value in question, provided several conditions are met (signature of a collective undertaking to retain shares for a period of two years by one or more shareholders or unitholders together holding a minimum percentage of the company's capital).after the transfer, at least one of the signatories of the collective or individual undertaking must hold a management position, for the following three years, etc.).

Have you considered a life annuity?

A life annuity may be an option if you own your principal residence but have little or no financial savings. The principle is simple: you sell your property in return for an initial capital sum and an annuity paid until your death. This form of sale enables you to obtain regular additional income while benefiting from an attractive tax system. Only 50% of the annuity is taxed if you are aged between 50 and 59.Then 40% between the ages of 60 and 69, and 30% beyond that.
In the case of an occupied life annuity (i.e., if you sell while remaining in the property), co-ownership charges and property taxes are paid by the buyer (only rental charges, such as heating and council tax, are the responsibility of the seller).

Marie-Christine Ménoire