A rigid organization of heritage transmission: The reserve and the available quota
More precisely, it is article 912 of the civil code which defines two important concepts: the available quota and the hereditary reserve.
The hereditary reserve is the share of property and inheritance rights the law of which ensures the free devolution of charges to certain heirs known as reservers, if they are called to the succession and if they accept it.
The available quota is the share of property and inheritance rights which is not reserved by law and which the deceased was able to freely dispose of by donations.
The civil code even goes so far as to define a quota which must absolutely go to the reserved heirs, the first of whom are the children.
The gifts, either by acts inter vivos, or by will, cannot exceed:
- Half of the settler’s property, if he leaves only one child on his death;
- The third, if he leaves two children;
- A quarter, if he leaves three or more.
- Depending on the number of children, the share which can be freely disposed of is reduced and can reach only 1/4 of the assets in the presence of 3 or more children.
However, behind this legal rigidity in the organization of the transmission of heritage, it is quite possible to disinherit, at least in part, one’s children. It is through the skillful use of life insurance that this is made possible.
But life insurance provides more flexibility in the organization of its transmission
If it is not possible to derogate from the application of the civil code, that is to say an organized and rigorous transmission of the inheritance heritage by the civil code, it is quite possible to reduce the basis on which the notary the person responsible for the succession must apply the reservation.
The application of the reserve is compulsory and it may not be possible to derogate from it, but by reducing the mass on which the reserve is calculated, it is the amount of the reserve and the available quota which is automatically reduced.
To reduce the estate weight on which the calculation of the reserve will be applied, nothing complicated, since the simple subscription of a life insurance contract is enough as recalled by Christiane TAUBIRA in a ministerial response of July 2012:
Under paragraph 1 of Article L. 132-13 of the Insurance Code, the capital or the annuity paid in respect of life insurance taken out for the benefit of a third party is neither subject nor to the reporting rules inheritance or those of the reduction for damage to the reserve of the contractor’s heirs. Indeed, they do not appear in the assets existing at the death of the insured insofar as the beneficiary acquires them directly against the insurer by virtue of a specific right born from the stipulation for others on which the operation of ‘insurance. Thus, life insurance is not taken into account when calculating the available quota and the hereditary reserve.
Nothing very complicated therefore to disinherit one’s children… There are nevertheless some firewalls instituted by case law: The questioning of the assembly for manifestly exaggerated premium and for indirect donation.
The principle of using life insurance to deprive your children is not in question, provided that you are at least cautious and organize this “spoliation” in time and not excessively. It will be complicated, not to say impossible to TOTALLY disinherit a child.
Within certain limits anyway.
As we presented to you in these two articles “Requalification of the life insurance contract: Can you invest all your wealth in Life Insurance. “And” Children deprived by a life insurance contract: Which remedies? “, Only two remedies allow a possible questioning of the strategy:
The concept of premium exaggeratedly exaggerated with regard to the contributory powers of the underwriter / insured of the life insurance contract; This notion of manifestly exaggerated premiums must be assessed in the light of “the circumstances and times of the payment of premiums as well as the importance” and “the usefulness of the transaction for the subscriber” in consideration of his age.
The notion of indirect donation when payment on the life insurance contract is made late (close to death) and in the absence of any hazard. The purchase of a life insurance contract is based on the concept of contingency, a concept essential for all insurance operations. As soon as this hazard is absent from the subscription of the life insurance contract (because the insured would be dying for example), a requalification of the life insurance contract is entirely possible. This involves demonstrating that the policyholder intended not to take advantage of life insurance.
Christiane TAUBIRA in the same ministerial response confirms this possibility