Reader question: We have a large family, and when talking to a friend about wills they mentioned a pacte de famille. In which circumstances would it be good to choose this option?
A pacte de famille (family pact) is used for inheritance planning.
Drawn up by a notaire, this can be used by families to agree in advance on some matters relating to who will inherit, notably allowing for an heir to waive all or part of their legal inheritance share in advance, to the benefit of (named) others.
As a reminder: French inheritance law allows for a set amount that must be left to a person’s children, called the réserve héreditaire. This is half of the estate if the heir has only one child (biological or adopted), two-thirds if there are two or three-quarters if there are three or more.
It can be a useful procedure where there is an amicable relationship between parents and children, to make sure in advance that the parents’ wishes are carried out, for example if one parent wants to leave everything to the survivor, with the aim that the children should inherit after he or she dies.
An alternative can be, in the case of parents who are not French, opting in a will for the inheritance law of one’s nationality to apply to the whole estate, thus using, for example, more flexible UK or US law. Having said this, this option has been made more complicated by a 2021 French inheritance law which seeks to water down this right and enforce the rights of heirs.
The pacte de famille can also come into play with regard to lifetime gifts.
Usually if someone makes large lifetime gifts which are to the detriment of the reserved heirs then the heirs can contest this after the donor dies (using a legal procedure called an action en réduction).
However a pacte de famille can be used by which the heirs can agree they will not enforce their rights in relation to the gift.
An heir may not renounce part of their rights through these formalities if they are under 18, and they may only do so in limited circumstances if they are under legal guardianship (curatelle or tutelle).
This formality has to be done in front of two notaires and involves the signing of a formal notarised document clearly identifying all the parties and the property concerned.
It can be made with regard to all of an heir’s inheritance, or a named proportion of it, or a specific piece of property.
The person renouncing has a period of one year in which they can go to court to ask for the document to be revoked. It can also be revoked in certain other limited circumstances: if the parent does not fulfil their duty under French law to help their child if they are in need (obligation alimentaire), or the child concerned finds themselves in serious financial difficulty due to having renounced, or if the person who will inherit in place of the child commits a crime against them.