French probate : An inheritance settlement

One of your loved ones has passed away, consult the “Inheritance: manual”.

Settling an inheritance requires 4 steps

1. The notary draws out the notoriety act
2. The notary draws up a complete inheritance assessment, for the person who has passed away
3. The notary completes the mortgage and tax formalities related to the death
4. Division of assets is defined

The timeframe for the complete settlement of an estate mostly depends on the specifics of each file. On an average, it takes six months. This is also the maximum time limit imposed on the heirs to pay up the inheritance tax (one-year time span for the people who didn’t die in France). In case of a delay, an interest of 0.20% per month is due to the tax authorities (in addition to a penalty of 10% if the delay goes beyond six months).

1. The notary establishes the notoriety act

The act of notoriety lists out the people who are notified to collect the inheritance, but also their respective rights.

For this, relatives of the deceased must provide the notary with the documents, which allows to identify the family members who are concerned by the inheritance (family record book, marriage contract, divorce decree, etc.).

You must also give the documents in which the deceased would have designated one or more people to collect the entire or part of his inheritance: will and donation between spouses.

The notary also examines the master file of last resort provisions.

2. The notary then draws out a comprehensive inheritance review of the deceased

The comprehensive inheritance review of the deceased lists out the assets (bank accounts, security assets, real estate) and the value but also debts.

For this purpose, you must send all documents (property titles, bank statements, savings books, invoices) to assess the assets and liabilities of the inheritance, and indicate the different operations carried out in the past by the deceased (purchases, sales, exchanges, incorporation of companies, donations).

The notary writes, as the case may be, a simple statement of inheritance or an inventory.

3. The notary accomplishes the mortgage and tax formalities related to the deceased

• establishment and publication of a real estate certificate for buildings in the Land Publicity Service,
• drafting inheritance declaration, if need be (The declaration is compulsory even if there is no payable duty. However, the direct heirs (children for example) or the spouse are not required to opt for a declaration of succession when the gross assets of the succession are less than 50,000€ (3,000€ for direct-line successions),
• payment of inheritance tax to the tax office, within six months of death
• possible request for payment in installments or portion of duties.

At this stage of the operations, the heirs can decide whether or not to share the property, totally or partially.

4. Sharing : the 4th step

The heirs can decide not to share, which means a "joint ownership". If they plan to include joint ownership in the long run, they are advised to express the latter through agreement, which organizes the joint-ownership management.

But if joint ownership is deemed too restrictive, the heirs may wish to share the property. Theoretically, this can take place at any given time. Most often, it takes place amicably.

In case of a serious disagreement (on the composition of the batches or on their assessment for example), one must address the judge, which leads to delays and additional costs.

Special formalities and interventions for a succession

In these stages which are the same for successions, specific formalities do exist:

• The presence of a minor or a protected adult (under guardianship or tutorship) among the heirs may require call upon a family council, consult a guardianship judge or obtain their authorization. Several months may be required to complete these formalities.
• Moreover, certain assets require special procedures (stock in trade, agricultural exploitation, enterprise whose exploitation must be maintained or passed on).
• Appointing an expert or a court administrator is sometimes necessary.
• Searching for an unknown heir or legatee also requires a genealogist. The latter shall conduct an investigation and the duration remains unpredictable.

Many other factors make an impact on the process of settling a succession: more or less good harmony between heirs, significance of assets or debts, the presence of foreign heirs or properties located abroad. All these factors make an impact on the processing time of the file.

Am I obliged to accept a succession that I inherit?

Heirs are free to accept/or not the succession. Three choices are made available to people who inherit:

• simple acceptance which means the heir is obliged to pay all the debts of the deceased without restriction, even on his own property.
• acceptance to a maximum of net assets, which consequently limits the payment of the debts of the succession by the heir, of what he collects through the succession. This means that debts are to be settled only within the limit of the value of the assets of the deceased.
• renouncing the succession. The heir is then considered to have never been a heir. He receives no assets but in return, he does not have to pay the debts of the deceased.

How much does a succession cost?

Settlement of an estate also leads to a genuine cost. The notary can only assess this, after obtaining key information. To find out more on notary fees.

Claims and disagreement during a succession

Since 2007, an heir can claim a succession for only 10 years (compared to 30 years in the past). At the expiration of a period of four months after the death, a summation to decide may be issued to the silent heir.

Heirs can carry out certain acts of ongoing management (payment of rent, invoices ...) without being held to accept the assets, which means without risking to personally bear all the liabilities. In the case of discovering an unforeseen liability which seriously affects the inheritance of the heir, the court may authorize this heir to cancel this acceptance. The acceptance procedure in the amount of the net assets, allows the heir to be liable for debts, only within the limit of the assets which are transferred.