Inheritance: Taking care of your stepchild will become much easier

It is a small revolution, which should change the situation in about 300,000 mixed families in France, which consequently have at least one child, only one of whom is the father or the mother, and in which the spouses are married or remarried. . If the reform were to be implemented, the donations that would be given to this unmarried child by the spouse would already be largely exempt. But beware, the situation will still be complicated at the civil level, especially if the current children of the spouses are also present, as is the case in half of the mixed families.

Expected fix

It is very simple: in the current tax system, no allowance is given for donations between non-relatives. So that gratuities to son-in-law or daughter-in-law are taxed from the first euro, up to a maximum of 60%. It does not matter in this regard the involvement of the stepfather or the stepmother in raising the child and investing it in the relationship!

The planned reform will offer a discount of 100,000 euros for this type of transfer, similar to that which will be given to donations to grandchildren or nephews and nieces. Please note: To take advantage of this, both spouses must be married. Thus, the Pacsés and the concubines will be excluded from the reform. These conditions are fulfilled, as indicated in our table, the tax savings will be high: it will reach 60,000 euros, which will depend on the maximum amount of the exempted donation.
be careful, After this limit, the amounts will still be taxed at a 60% forfeiture rate.

capital

(1) Spouses who are married under the legal community system. Hypothesis: Donate to the last living with 100% usufruct option. If Jules dies first, the usufruct will be calculated on Jules’ remaining assets after the donations.
(2) or half of the common heritage and its own heritage.
(3) Taxes of up to 60% for donation between non-relatives without any deduction.
(4) Taxes of 60%, after deducting 100,000 euros as a gift for the child of the husband/wife.
NP: Not appropriate.

How to treat all beneficiaries fairly

So far, most of the mixed families who want to reduce the cost of simple adoption donation have passed. The process requires that you be at least 28 years old next to the adopter, and 15 years apart from the adopted child. The child, if he is over 13 years old, must also give his consent before a notary. Just like the spouse, in front of a notary or on free paper. The adoption is then mentioned in the margin of the adopter’s birth certificate. “After that, it becomes possible to make donations, taking advantage of the current tax deduction of €100,000 between parents and children,” explains Marion Calmette, from SG Private Banking. Thus equal to any biological children of the adopter.

This status also allows the adopter to obtain the status of compulsory heir (but this is not so for adoptive grandparents, who therefore reserve the right to deprive them of inheritance). Such adoption remains revocable, but only before a judge, and for serious reasons (ingratitude, flagrant misconduct, violence): and therefore it is indisputable to return to it in the event of a spouse separation, for example.

Hence the reform envisaged by the re-elected president should greatly simplify the task of mixed families. “We can expect a decrease in the number of adoption applications, once this reduction of €100,000 comes into effect,” confirms Aurélie Chaplain, a notary at Versailles. Even if a simple adoption could retain a slight advantage, it is logical that the reduction allowed in such a framework should by itself go from 100,000 to 150,000 euros thanks to the reform.

How to prefer a specific beneficiary

Apart from adoptions, donations to the stepson can only be made on the portion available to you, so that the genetic reserve of biological children is not amputated. Remember that this only goes up to a third with two children, or a quarter from three. As our table shows, in the event that a bonus is received in a large amount, this reserve can be quickly used, even if the donation does not result in any taxes from a tax point of view! This is the case, in our schedule, for a donation of 100,000 euros, which fully corresponds to the envisaged reduction. After that, the biological children are entitled to claim €25,000 in compensation between themselves. For a donation of €150,000, taxable this time, the possible reduction action would total €75,000, half of the reward.

You should also know that these procedures are long, and insinuate that notaries are trying to find agreement between the parties before, for lack of consensus, before the judge. To avoid disagreement, it is otherwise possible to enter into a life insurance contract, with the stepson being identified as the beneficiary. The trick makes it possible to combine tax benefits (exemption from inheritance tax up to 152,500 euros of transferred capital if the amounts are paid before the participant’s 70th birthday, and 20% tax thereafter) and civil (the capital is considered outside the estate, and therefore does not enter in advance in Genetic reserve calculation for biological children. However, this solution can only be used for transmission upon death, not at the young age of the stepson.

And note: It will also be necessary to protect against any excess. Because, in the case of “exaggerated premiums”, which are estimated by the court according to its date, as well as the genetic status of the holder of the contract, the appeal remains possible for the owners of the reservation of children.

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