What is a Donation Entre Époux & How Can it Help With French Inheritance?

For instance, consider Daniel and Annie, a British couple who recently moved to France after purchasing a flat in Nîmes. They have two children who reside in the UK, and although they sold their house in Bath, they still have bank accounts and investments in the UK. Their goal is to ensure that after the first of them passes away, the surviving spouse is adequately provided for during their lifetime.

By making a donation entre époux, which covers their assets in France, they have three options to achieve this –

• Gift the Usufruit: They can gift the usufruit of their French property, giving the surviving spouse the right to use and benefit from the property. This is particularly useful to ensure that the surviving spouse can remain in the principal home.
• Combination of Usufruit and Full Ownership: They can give their spouse 1/4 of the full ownership of their assets and 3/4 of the usufruit of the property.
• Full Ownership: They can give the other spouse full ownership of the available portion of the estate that is not legally reserved for their two children (in this case, each child will be entitled to 1/3 of the deceased’s assets).

As discussed, a donation entre époux allows for greater flexibility, in some circumstances, for couples as well as simplifying the process for the surviving spouse. Notably, the donation entre époux can cover assets owned when it is made, and assets assets acquired in the future. This allows Daniel and Annie to either sell their current property or purchase another house, which will then be included when the donation comes into effect on death. They can also make a donation regardless of whether they have previously entered into a matrimonial property regime.

However, it is important to mention that a donation entre époux is only available to married couples. If you are in a civil partnership, known as a PACS in France, or are cohabiting, you cannot benefit from this option.

A donation entre époux can be established before or during the marriage by a notarial deed. Each spouse must agree to the donation for the benefit of the other, in a similar way to mirror Wills.

Can a donation entre époux be revoked?

Unless created by a marriage contract, a donation entre époux can be revoked and can be cancelled automatically in the event of a divorce, as both spouses will lose any marital benefits they were previously entitled to.

The interaction between Wills and donation entre époux can be complicated, especially if the documents are very different.

Therefore, we strongly advise that you review your estate planning and make sure that the legal structures you put in place work well together.

If you would like to discuss this further, our specialist cross-border team can help you update your Wills to cover your assets in France, taking into account a donation entre époux if appropriate.