In what situations should a simple donation be preferred?
– When parents do not or want to help only one of their children
– Or when they want him to collect a particular asset, a family home for example: by giving it to him, they certainly attribute it to him.
– Finally, if they want to start sending to reduce inheritance tax, without having to share.
That was confirmed by recent case lawit is impossible to make a donation-partition of a property (a family home for example) that children will hold in joint ownership. The only solution therefore is to make a simple donation of undivided parts to each other.
Are there any risks in making a simple donation?
Unless otherwise specified, what is given to a child is an advance on his or her inheritance. On the death of the donor, in order to restore equality to his siblings, what he has already received must be considered. However, this calculation is made by taking the value of the property on the day of replacement. So, if the child has received € 100,000 to buy a house whose price has doubled, he or she will be considered to have received € 200,000.
What are the consequences?
Psychologically, this calculation is often very badly experienced by the beneficiary. If there are other assets in the estate, to be paid, this child will receive less than his siblings in the inheritance.. If there is not enough left over for the latter to receive their share, he must pay them the balance, i.e. a sum of money sufficient to restore the balance.
How to avoid conflicts?
Parents may provide, in deed of gift, that the donated property need not be re-evaluated. Or give it to this child in addition to his normal share of the inheritance, i.e., excluding the share of the estate. In this case, they have an advantage over others. Attention, siblings still have to receive their inherited reserve upon the death of their parents., meaning the lowest part of the inheritance that they cannot be deprived of. If the donation weakens this reserve, the beneficiary must return it by paying the balance.
Another disadvantage: this donation that does not include the property portion is given to the available portion (the portion of the property that does not automatically go to the children), the same one that allows the property to remain to the wife. To benefit a child in this way reduce as much as the surviving spouse can receive.
What if parents give simple donations to each child?
Each of these gifts needs to be reassessed at the time of succession. And even if all children receive the same amount initially, for example € 100,000, some will put it better than others. For example, if one doubles his bet while one loses money, the former will receive € 200,000 on his share, and the other will only receive € 100,000. The first will not get as much as the second from the rest of the property.
Will a shared donation solve this problem?
Yes, because it certainly covers up sharing between children. If they all receive a prize worth it, there is no need to re -evaluate the goods donated on the donor’s death. It is still necessary to have a way to allocate at the same time a prize to each other. Parents rarely have three apartments of the same value to share between their three children. So you have to complete some lots with money, for example, which requires monetary effort. Sometimes the richer kids themselves pay the balance to others.
What is your advice?
When parents are not able to immediately organize a donation sharing, it can still be helpful (to help a child or expect substitution to reduce taxes for example), to make a simple donation to one or two children. Then, when the latter arrives, there will still be time to re -incorporate these simple donations into a final shared donation.
Thus, the goods donated will be reviewed to respect equality with third parties, but under parental authority, limiting conflicts. Since then, the values have certainly been fixed and there have been no other debates during the replacement. The only drawback: the State will require a 2.5% share fee on the property already donated.
*: with Me Stéphane Vieille, notary in Bourg-en-Bresse, member of the Monassier group.