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Inquiry regarding donations between spouses: Is the validity of such contributions subject to scrutiny during divorce proceedings?

Discussion on Consequences of Spousal Donation in Divorce or Inheritance Scenarios, Led by Notary Nathalie Couzigou-Suhas on our Site / Radio Patrimoine.

Discussion held at 'Grand Appointment of Savings' event (our platform/Radio Heritage) regarding the...
Discussion held at 'Grand Appointment of Savings' event (our platform/Radio Heritage) regarding the implications of a gift given between spouses, should divorce or succession occur, with Nathalie Couzigou-Suhas, a notary in Paris, offering clarification for a listener on the subject.

Inquiry regarding donations between spouses: Is the validity of such contributions subject to scrutiny during divorce proceedings?

Laid-Back Guide to Financial Matters: The Skinny on Donating Between Spouses in France

(In our show "Grand Rendezvous of Savings" on Radio Heritage, our lady, Nathalie Couzigou-Suhas, Parisian notary, puts the kibosh on one listener's queries about transferring the dough between partners in case of a divorce... or succession.)

Author: Quentin Bas Lorant, Journalist | oursite.fr

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Every month, our show "Grand Rendezvous of Savings" tackles the money-related queries that have been gnawing at you. Our experts - sharp cookies like notaries, tax chaps, money managers - sort out the financial fun-'n'-games that confound your head. Today, Magali puzzles over a bit of asset transfer action her hubby's considering to level the playing field and start parceling out to their children: are they shooting themselves in the foot come divorce?

It might sound like an act of generosity, but don't you forget it, there's important tax matters to weigh up, warns Nathalie Couzigou-Suhas, a discerning Parisian notary-lady: "Magali's hubby contemplates rebalancing their property through a hefty 225,000 euro property transfer. But, like a sly fox, this operation could be seen by the tax office as a fierce attempt at tax manipulation, especially if it's used to divvy up the goods before succession to the kids." The tax cops keep a keen eye out for disguised attempts at tax optimization, y'see.

So Long, Donation, My Old Friend

What's the deal in case of divorce? Well, here's a shocker for you: contrary to popular belief, it's a no-go for partners to rip open the checkbook and toss back their donations after a split. "Donations between spouses are now lastingly unchangeable. Thanks to the law in 2004, a donation between married folk cannot be yanked back in the event of le divorce", reminds Nattie. But selected inheritance between spouses remains subject to mutation rights, she elaborates: "There's a get-out-of-jail-free card of 80,724 euros. However, once you step outta those bounds, you're looking at 20% rates."

Alternative Strategies

Instead of the usual asset transfer, another strategy exists that keeps inheritance rights at bay: Nattie suggests they modify their martial regime, such as submerging their assets in a common pool or a joint ownership company, withe a clause for in-case-of-divorce disengagement. This March 2019 law makes it easier to alter the marriage gameplan, as long as the grown kiddos are kept in the loop. "It's the same outcome as a donation, but no taxes and no run-ins with the tax office if they can justify the scheme", concludes the knowledgeable Nathalie.

Where to Turn for Help

Facing questions about investments, inheritance, taxes, or property matters? Each month, ask away by sending questions to the wise ones at question@our site. Let 'em clear the smog from your money quandaries!

Want to learn more about our opinions? Dive into related publications around this article, including our show's "Grand Rendezvous of Savings", and topics like inheritance, divorce, and succession.

From one dollar to the next, the "Grand Rendezvous of Savings" helps you make every cent count!

Under the Hood: Lessons Learned

  • Up to a certain threshold, donations between spouses (or civil partners) often enjoy tax exemptions, leveraging favorable rates and gift allowances to circumvent mutation rights.
  • Being part of the European Union, France follows EU regulations, thus granting similar considerations for citizens of other EU countries donating assets to each other.
  • Inheritance tax in France (impôt de succession) applies to worldwide assets for French residents, although married couples benefit from tax-free transfers up to a certain threshold.
  • The inheritance process may become intricate when partners have foreign assets or differing domicile status, requiring knowledge of international tax laws and treaties.
  • Legal restrictions, such as reserved portions (parts réservataires) for children, may limit a spouse's ability to circumvent inheritance taxes entirely through donation.
  • Strategies for minimizing mutation rights, gift taxes, and capital gains tax derived from gifted assets could include the use of life insurance, financial structuring, and estate planning.

In the realm of money matters, an ounce of knowledge is worth a pound! Now you know the tricks of the trade, go forth and make those bucks grow like cattle aboard a caravan. What's important to remember is this: when building wealth, don't just listen for the cockleburrs; tune in to the pearls of wisdom offered by our experts!

In the world of personal-finance and business, understanding the nuances of donations and inheritances is crucial. For instance, donations between spouses in France are permanently irrevocable according to the law of 2004, but selected inheritances remain subject to mutation rights with a cap of 80,724 euros beyond which a 20% tax rate applies.

An alternative strategy to reducing inheritance tax is modifying the marital regime, such as pooling assets in a common pool or a joint ownership company, with a divorce disengagement clause. This strategy keeps inheritance rights intact while avoiding potential tax controversies.

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