Donation: the gift for young and old.

To make a donation is to pass on property or money to someone for free, without expecting anything in return. But beyond that, this gesture of pure generosity allows the donor to distribute all or part of his assets among his heirs while he is still alive and/or to favor the persons of his choice instead of waiting for the settlement of the estate. The donor optimizes the transmission of his assets while preserving family harmony. Without forgetting the fiscal aspect.

Making a donation means

- distribute during your lifetime all or part of your assets among your heirs and/or favor the persons of your choice instead of waiting for the settlement of the estate;
- preserve family harmony by avoiding conflicts that may arise during the settlement of an estate;
- optimize the management and transmission of your estate;
- allow the beneficiary(ies) of the donation to get started in life or to carry out a project that is important to them;
- benefit from tax advantages, which vary according to the person to whom you are giving and the type of donation.

Giving has limits

Before making a donation, draw up an asset assessment with your notary.

The freedom to give is not infinite. To avoid abuses, the law has set limits concerning :

- the donor. Some people need to be protected either because of their age or because their mental capacity prevents them from understanding the risks involved in making a donation and from discerning fraudulent maneuvers aimed at misappropriating their assets. This is why the law prohibits an unemancipated minor from giving away property belonging to him or her. And even his legal representative (parent or guardian) cannot do so on his behalf. As for protected adults, the latitude to make a donation will depend on the protection regime. But in all cases, the incapable adult will not be able to act alone

- the donee (the beneficiary). In principle, everyone is supposed to be able to receive a donation. However, as with a will, some people who may be able to influence the donor's choice cannot be designated as beneficiaries of a donation. These include, for example, the attending physician, employees of home care and nursing homes, domestic employees, professional guardians and curators (and the public institutions and associations for which they work), ministers of religion, etc.

- what can be given. The donor, even if he is very generous, cannot give all his patrimony as he would like. To avoid any dilapidation, a part of his goods (the hereditary reserve) is automatically destined to the heirs of the donor (children...). They cannot be deprived of it. On the other hand, the other part of the estate (the available portion) can be freely given or bequeathed to the person of one's choice (apart from the exceptions mentioned above).

Put it in the right form

A donation is not a trivial act. If you want to be sure that it produces the expected effects, a minimum of rules must be respected:

- a donation must be drawn up by a notary. Otherwise, it may be cancelled. The intervention of a notary brings a certain number of guarantees (the deed is indisputable, there is no risk of it being lost or destroyed...) and it is the assurance of making the right choices and of having all the necessary information to properly understand the consequences of your gesture at the family, patrimonial and fiscal levels.

- it is possible to include specific clauses to protect the donor's interests according to the circumstances and objectives. For example, a donation with encumbrances (obliging the donee to perform certain acts if he wants to benefit from the donation), a donation with a conventional return clause (allowing the donated property to return to the donor's patrimony in the event of the donee's predecease if he does not die), or a donation with a return clause.(allowing the donated property to return to the donor's patrimony in the event of the predecease of the donee if he or she has no children, for example), a gradual donation (allowing the donor to give full ownership of a property to a first beneficiary who is obliged to keep it until the end of his or her life and then to sell it to a second beneficiary). the end of his life and to transmit it at his death to a second beneficiary designated in the deed of gift), of a gift withusufruct reserve...

Lexicon

- Usufruct: The right to use and receive the income from a property belonging to another person (the bare owner).
- Full ownership: "Complete" right combining the effects of bare ownership and usufruct.

Ensure a more secure future for your spouse

Spouses automatically inherit from each other, without inheritance tax. In spite of this, the gift between spouses has many advantages. It allows you to give more than the law provides for and ensure a more comfortable future. Especially in the presence of children, especially if they are born from another union or when the deceased leaves neither ascendants nor descendants. A gift between spouses can be made at any time after the marriage. Generally, couples think about it when they buy their first home or when their first child is born. But the sooner the better.

Gifts between spouses are not made once and for all. If your assets or your needs change, it is possible to modify its content (always before a notary). It will only take effect at the time of the death of one of the spouses and will only concern the assets that the donor spouse will leave at his death.
Two situations must be distinguished:

* If the spouses have children together, the surviving spouse receives either all of the deceased's property in usufruct, or 1/4 in full ownership. With the gift between spouses, his or her rights are extended, as desired, to :

- the usufruct of the entire property;

- 1/4 in full ownership and 3/4 in usufruct;

- full ownership of the available portion of the estate.

* If one of the spouses has children from a previous union, his or her spouse can only receive 1/4 of the estate in full ownership. With the gift between spouses, he or she can claim, at his or her choice, :

- more extensive rights in full ownership ;

- the usufruct on the totality of the succession;

- a combination of full ownership and usufruct.

When donation rhymes with sharing

To be sure that none of your children will be harmed, a shared donation is the ideal solution. It is both a donation and an anticipated sharing of your estate. The shared donation cannot be challenged when the estate is opened. It is irrevocable. What is given is given.
The shared donation avoids the difficulties and family disputes that can arise during the settlement of an estate, and facilitates the allocation of assets in accordance with the donor's wishes and the needs, capacities or abilities of each child (the donees).
You are free to decide how to divide the property among your children. However, each child must receive at least his or her share as provided by law. If this is not the case, a child who feels he or she has been wronged may act to reduce the amount.
Note: since 2007, the shared donation does not only apply to children. The donor can also give to his grandchildren. This is called a "transgenerational shared donation".
The law also gives the possibility to make donations within blended families. Finally, childless people can make a shared donation to their brothers and sisters (or, in the event of their death, to their nephews and nieces).

Think about it

The temporary donation of usufruct allows you to give, for a determined period of time, the usufruct of an income-producing property (housing, shares of a non-trading property company, etc.). This can help a child to finance his or her studies or a professional project, for example.

You can also help one of your children

If your objective is more to help one of your children, you have two options

- if you wish to provide one-time assistance to this child, without giving him or her a special bonus compared to his or her siblings, you can make a donation in advance of his or her inheritance;

- if your intention is to give the child an advantage over the others, you can make a donation "outside the inheritance". You can thus give him more, while remaining within the limits of the rules of the available portion and the hereditary reserve.

On the other hand, if the gift encroaches on the share of his brothers and sisters, they may, when your estate is opened, question the gift.

Give and save money

The beneficiary of a gift must normally pay gift tax. But depending on the relationship with the person to whom you give and the nature of the goods received, the tax burden will be more or less heavy. Donations benefit from a very advantageous tax system.

In the case of a family donation of a sum of money, the donation is exempt from gift tax up to €31,865, under certain conditions. The donor must be under 80 years old and the beneficiary must be of age or emancipated.
This type of donation of money must be made in full ownership to children, grandchildren or great-grandchildren or in the absence of descendants, to nephews and nieces or in the event of the death of the nephews and nieces, by representation to grand-nephews or grand-nieces.

This exemption is renewable every 15 years. The donation may have been made by check, bank transfer, money order or cash. This exemption can be combined with the deduction granted according to the family relationship.

Note: Disabled persons benefit from an allowance of €159,325, which can be added to other allowances.

Interesting

Within the framework of a family donation, a child can receive every 15 years, duty free:
- 63 730 € from his parents (31 865 € x 2)
- and 127 460 € from his 4 grandparents (31 865 € x 4)

Marie-Christine MÉNOIRE