In what cases is a simple donation preferred?
When parents cannot or only want to help one child
– or when they want him to collect a certain asset, a family house for example: by giving it to him, they attribute it to him definitively.
– Finally, if they want to start transferring to reduce the inheritance tax, without sharing.
The last law confirms thisIt is impossible to make a portion of the donation for property (for example, a family home) owned by children in common property. So the only solution is to make a simple donation of an undivided share of each.
Are there risks in a simple donation?
Unless otherwise stated, what is given to the child is an advance on his inheritance. At the death of the donor, in order to restore equality with his brothers and sisters, what he has already received must be taken into account. However, this calculation is made by taking the value of the property on the day of the succession. Thus, if a child gets 100,000 euros to buy a house whose price has since doubled, he will be considered to have already earned 200,000 euros.
What are the consequences?
Psychologically, such a calculation is often very badly done by the recipient. If there are other assets in the estate, to compensate, this child will receive less than his siblings in the inheritance. If there is not enough for the latter to receive his share, he will have to pay them a credit, that is, an amount of money sufficient to restore the credit.
How do you avoid conflicts?
Parents can, in the deed of donation, stipulate that the donated property does not need to be revalued. And giving it to this child in addition to his natural share of the inheritance, i.e. excluding the share of the inheritance. In this case, they tend to him over others. Be aware, brothers and sisters will still receive their genetic reserve upon the death of their parents., i.e. the minimum inheritance that cannot be deprived of them. If the donation undermines this reserve, the beneficiary must restore it by paying a balance.
Another drawback: this donation except for the share of the estate is given on the available part (the share of the estate that does not automatically go to the children), the same thing that allows the assets to be left to the spouse. Benefiting the child in this way means reducing what the surviving spouse will receive.
What if parents made a small donation to each child?
Each of these gifts must be re-evaluated at the time of succession. And even if all the children got the same amount initially, say 100,000 euros, some would have put it better than others. For example, if one of them doubles his bet while the other loses money, the first will get 200,000 euros for his stake, and the other only 100,000 euros. The first will not be able to take the equivalent of the second from the remainder of the estate.
Does joint donation solve this problem?
Yes, because it certainly governs sharing between children. If they all receive a prize of equivalent value, there will be no need to re-evaluate the goods awarded upon the death of the donor. It is still necessary to have the means to allocate a prize at the same time to each one. Parents rarely have three apartments of equal value to share between their three children. So you have to complete some lots with money, for example, which requires cash effort. Sometimes well-off children themselves pay credit to others.
What do you advise?
When parents cannot organize a donation sharing right away, it can be helpful (to help the child or anticipate succession in order to reduce tax for example), to make a simple donation for one or two children. Then, when the last donation comes in, there will still be plenty of time to reincorporate those simple donations into a final joint donation.
And therefore , Goods already donated to respect justice will be re-evaluated with the third, but under parental authority, limiting disputes. From then on, the values will be permanently fixed and there will be no further discussions during the succession. The only drawback: The state will require a 2.5% participation fee on property already donated.
*: With Me Stéphane Vieille, notary of Bourg-en-Bresse, member of the Monassier group.