The impact on international successions opened in Monaco of the right to a compensatory levy introduced by France for the benefit of children (as of November 1, 2021)
Civil ● Family ● IPL – International successions ● Estate planning
The French Law n° 2021-1109 of August 24, 2021 reinforcing the respect of the principles of the Republic (published in the JORF n° 0197 of August 25, 2021) instituted in Article 913 of the Civil Code (last paragraph) a right of compensatory levy (prélèvement compensatoire) in international successions for the benefit of the children of the deceased who do not benefit from a protective mechanism of reserved portion of the estate pursuant to the foreign law governing the succession.
The laws of succession concerned are those that allow the children being disinherited (freedom to organize one’s succession, discrimination on the basis of gender, sexual orientation, religion, filiation, order of birth, for example).
The children will be able to take from the movable and immovable property located in France the share of the reserve granted to them by French law, provided that the deceased or at least one of the children is, at the time of death, a national of a Member State of the European Union or has the habitual residence there.
This provision will be applicable to international successions opened on or after November 1, 2021, including when liberalities were granted by the deceased before that date.
International successions opened in Monaco involving movable or immovable property located in France, and in particular those governed by an Anglo-Saxon law (of the nationality of the deceased), are likely to be affected by this reform.
Indeed, although the reform is part of the provisions relating to the respect of the rights of individuals and equality between women and men and its main objective is to put an end to the application on French territory of foreign succession rules which are detrimental to the daughters of the deceased, in practice the scope of application of Article 913 of the French Civil Code covers the succession laws of most common law countries.
The French measure reduces testamentary freedom, which is no longer total if the applicable foreign succession law does not have a mechanism of reserved portion of the estate. Changes to your estate planning may be necessary.