Law advice? inheritance in another country.

[MarionC]

i know it's a long shot posting here but I have a dilemma.
I bought property in France and the agent said I should put my daughter on the deed to avoid big taxes for her when I die.
But when I questioned what happens on the USA side of things the french notaire said American citizens are governed by American laws of inheritance.
Sound like we take a hit on both sides of the pond.
I don't know what to do and I can't get a straight answer. French lawyer referred me to an American lawyer, and American lawyer referred me to a French lawyer.
Can it be that mysterious to get to the facts???

 

[Missy]

Can it be that mysterious to get to the facts???

Wow does not surprise me that the countries and their politics and their attorneys are making things confusing.

IDK but my common sense tells me this-if your DD remains a USA citizen and you are a USA citizen no matter where you die and no matter where she is living I think USA laws would apply to your general inheritance. However for property in France I am guessing French laws apply. IDK Jimmianne sorry I am no help whatsoever. Just thinking out loud.

When Greg gets home later I will ask him but I am doubtful he would know as this is not his area of expertise but I will ask him if any of his colleagues can help with this question.

In the meantime perhaps this has some answers. I have not read it yet but sharing it here and will attempt reading it too.

https://www.cobar.org/Portals/COBAR/Repository/Sections/Opinions/France Article.pdf?ver=2016-06-14-090831-210


America has a tax treaty with France. Info in pdf.

Note that most countries, including America, h ave a tax treaty with France. The 19% capital gains are also taxable in the United States, but the tax liability will be reduced by a tax credit equal to the tax withheld in France.

And on French inheritance

Owning property located in France has consequences with respect to a succession. Once again, French law applies despite residency or citizenship. (art. 3 du Code Civil).

16

In the absence of careful estate planning, French inheritance rules and taxes will apply. The historical tradition of French inheritance law protects the whole family. Unlike the case in the US, a spouse is not a protected heir. In fact, until as recently as 2002, the order of inheritance placed the surviving spouse after the cousins of the deceased!

 

[Missy]

OK so from a quick read it seems French laws will apply unless you have "careful" estate planning accomplished. Whatever "careful" estate planning means. Looks like as with the USA there are loopholes in France as well. So IOW you need a "good" attorney. Good luck Jimmianne!!!

And also congratulations! I know I already congratulated you but this is worth repeating. So happy for you and your DD!

 

[MarionC]

Thanks Missy

 

[Missy]

Thanks Missy

I am sorry I couldn't be of more help but I do not see why a competent (well versed in international affairs) attorney would not be able to answer this question.

 

[diamondseeker2006]

(*not legal advice, obviously) Seems to me that adding her to the deed now would keep that property from being inheritance because it would automatically be hers when you are gone. That's the case here, at least. Joint ownership means the property automatically is the survivors. We've been working on our planning and made sure that every single bank and investment account has both of us on it and the kids named as beneficiaries (and we may do some accounts with the kids as joint owners later). That was always done with investment accounts, but we recently did it on regular bank accounts such as checking, etc. so those would pass automatically and not have to go through probate.

 

[smitcompton]

Hi,

Estate inheritance taxes are zero if your estate is less than five million(each yr it increases until no inheritance tax). Trump did this under his tax plan. I think ownership of the property should be put a certain way, tenants in the entirety, or tenants in common. something like that. Or, you can do as I did, by putting all property in a revocable trust with you as trustee, until you die and then your daughter becomes the trustee and controls the estate. This way there is no probate and everything becomes hers. I think the French property will still fall under US law, but there may be transfer taxes, or if she is a French citizen and could be taxed.
I am not an attorney, but I paid 1,000 to have my assets, bank accounts, property be put in a revocable trust. During this process a will is incorporated, and powers of attorney designated. I went to an estate attorney. Hope this helps a bit. No estate taxes, yea!

Annette

 

[MaisOuiMadame]

We had similar issues, but within the EU. So different treaties and legislations applied.

We found a tax advisor / accountant from a big international firm most helpful to help sort out the taxation side.
The (excellent) lawyer came in when we knew what we wanted him to draw up for us.
French legislation is CRAZY ...

Also it boiled down to the fact that we never had to pay twice, but we had to pay some fees twice and were reimbursed later.

 

[MarionC]

Thanks to you all.
In the states everything is in a trust, and Annette, yes, you are exactly right about tenants in common or whatever the proper wording is. (Which I will check into). That is what I found out yesterday.
I always feel a bit at sea with estate law. My parents set up a trust, but because of the way it was done the estate still went through probate. Just awful. So I try to get things as right as possible and hope it's enough!

 

[lissyflo]

I agree with Kipari- It’s a very long time since I studied tax (and only to a comparatively basic level), but it certainly used to be the case (UK legislation anyway) that if you held overseas assets and were taxed on them, this could be set off against what was due on your ‘home’ nationality tax on the same assets. Maybe that was just a UK and EU agreement though? It would presumably also depend on exactly how you jointly hold the property - a percentage each vs a pooled ownership of the whole property?

But I second the recommendation above for a good international tax planner!

ETA - just seen your comments above!

 

[Missy]

I always feel a bit at sea with estate law. My parents set up a trust, but because of the way it was done the estate still went through probate. Just awful. So I try to get things as right as possible and hope it's enough!

@Jimmianne Just spoke to Greg about this and you need a Trust and Estates attorney who specializes in International Law. He doesn't have any personal recommendations but if you are interested he will see if any of his colleagues have anyone they recommend.

 

[diamondseeker2006]

Can you just gift her the property now and put it in her name?

 

[Roselina]

Buying property in France as a foreigner is rather complicated. It’s true that most who do it, put in their children as the owner. You certainly need to find a lawyer who knows what he or she is doing. There are some in Geneva (even with an US background) who would know. But then you’re based in the US.

 

[Ella]

This is an old thread that a spammer reopened, so closing again.