Transmission of Property for Dual French-American Citizens
The transmission of property raises important questions for dual French-American citizens, who are sometimes unsure whether their estate is subject to French or U.S. law. The situation can become especially complicated when a testator has property located in both France and the U.S., or when the heirs are of a different nationality. How can one determine which estate law governs the transmission of a testator’s property after his or her death?
Before August 2015
The distinction between movable and immovable property long determined which country was competent in the eyes of French law regarding the transmission of the deceased’s property. According to French law, movable property (“any material thing which can be moved; e.g. financial assets, furniture, cars etc.) is subject to the jurisdiction of the last country of residence of the deceased while immovable property (“which by nature cannot be displaced”; e.g. real estate) is devolved according to the law of the country where the immovable property is located[1].
Let’s take an example. A French-American citizen living in New York (Ms. X) has movable property in the U.S. (financial assets) and immovable property in France (real estate). If Ms. X. was living in New York at the time of her death, then, per French law, her financial assets would fall under U.S. jurisdiction while her real estate would fall under France’s jurisdiction.
One of the most common conflicts was the contradiction between foreign estate law and France’s notion of “forced heirship.” Under the previous law, any assets located in France were subject to French inheritance law and its forced heirship system. Under French law (art. 913 of the Code Civil), descendants of the deceased are entitled to a reserved portion of the succession: half if the deceased leaves only one child on death, two thirds if he leaves two children and three quarters if he leaves three children or more[2]. Parents cannot disinherit their children. This led to situations where a foreign testator’s testament came into direct conflict with French forced heirship laws regarding the devolution of his or her property in France.
Since August 2015
The Regulation (EU) No. 650/2012) adopted by the European Parliament in July 2012 and in effect since August 2015 should solve the abovementioned conflict. Under the new European regulation, there will no longer be a distinction between moveable and immovable property. The default rule will be that the settlement of the estate will follow the law of the country of the habitual residence of the testator[3]. However, a testator can still choose to apply the law of his country of citizenship which is known as professio juris[4]. For example, a French citizen living in the US could indicate in his/her American will that he/she wishes French law to dictate the transmission of his or her estate or vice versa.[5]
The ongoing legal battle over the estate of late French singer and songwriter Johnny Hallyday offers an excellent example of the complexities of international estate law and the potential for conflict between French law and foreign law[6]. The deceased rocker’s biological children, Laura Smet and David Hallyday, are challenging their father’s US will on the grounds that it completely disinherits them in favor of his fourth wife and adopted daughters. At the very heart of the dispute is deciding whether US or French law is applicable. While the transmission of Johnny Hallyday’s estate falls under US law given that he was a resident of California at the time of his death (as per the Regulation (EU) No. 650/2012), French law, unlike Californian law, does not allow a testator to disinherit his or her children. Laura Smet and David Hallyday will therefore argue that US law should be set aside in favor of French law because the will deprives them of the automatic inheritance rights or “reserved portion” they are entitled to under Article 913 of the French Civil Code. However, French legal precedents will make their case difficult. In 2017, the Cour de Cassation, France’s highest court of criminal and civil appeal, rendered a judgment on a strikingly similar case involving a French citizen who had been living in California for many years and bequeathed all his estate to his spouse. The court ruled the deceased in question had the right to disinherit his children and that excluding the forced heirship is not, in and of itself, contrary to French international public policy.[7]
Didier Rousseau with Nicole Montalette, Esq.
[1] « DROIT DES SUCCESSIONS : CE QUI CHANGE EN AOÛT 2015 » Paris Notaires, Chambre Des Notaires De Paris, 29 July 2015, www.paris.notaires.fr/actualites/droit-des-successions-ce-qui-change-en-aout-2015.
[2] “General Information - France.” European e-Justice Portal, 13 Feb. 2017, e-justice.europa.eu/content_general_information-166-fr-maximizeMS_EJN-en.do?member=1.
[3] DROIT DES SUCCESSIONS : CE QUI CHANGE EN AOÛT 2015.” Paris Notaires, Chambre Des Notaires De Paris
[4] Proton, Agnes. “The European Regulation No. 650/2012 Related to International Successions .” America Bar Association, May 2016, file:///C:/Users/Didier/Downloads/_IC840000_newsletterpubs_EU_Regulation_International_Article_AP.pdf.
[5] Note that if the French law is elected, French inheritance tax rules will still apply to the devolution of any French estate. If a resident of New York State, the choice of New York law would be advisable since there is no estate tax to be paid for the surviving spouse.
[6] Buthiau, François. “Succession De Johnny Hallyday : Décrypter Les Enjeux Juridiques.” Village De La Justice, 15 Feb. 2018, https://www.village-justice.com/articles/succession-johnny-hallyday-decrypter-les-enjeux-juridiques,27228.html.
[7] Cheytion, Justine. “Forced Heirship and French International Public Policy (Updated as of February 12, 2018).” Soulier AARPI, 12 Feb. 2018, www.soulier-avocats.com/en/forced-heirship-and-french-international-public-policy-updated-as-of-february-12-2018/.c
See glossary
Forced heirship
Reserved portion
