How can we protect our savings for the surviving spouse in France?

Reader question: We live in France. My wife has no children, I have two. We bought our house en tontine to protect the survivor, but what can we do to protect our cash for the survivor? The children should inherit when we have both gone.

We regularly receive questions about how to protect the survivor in preference to the children. The tontine clause should ensure the survivor inherits the house (there can be grounds for challenge, but these are rare).

Presuming you are British nationals, you should be able to protect your financial investments in the terms of a will. As the wife has no descendants, she should have no restriction on whom she can name as beneficiary.

For the husband, at least, you would declare that English law should apply to your assets, which you would leave to the wife if you die first. Following the recent clarification in France’s inheritance laws, there should be no problems with compensatory claims for the children.

Your wills could also then declare that, if you are the survivor, the estate would pass to the husband’s children.

However, beware: if the husband dies first and leaves everything to the wife, this would result in 60% inheritance tax for her step-children when she dies. You may just accept this, perhaps on the basis that anything the children might inherit is a bonus.

For some, though, such rates are unacceptable. Other options may be available, such as life assurance policies or changing the ownership structure to give the survivor a life interest. Such questions will require specialist professional advice, as it will be important to understand in detail the costs and consequences of any proposed structure. Similarly, the wills would require professional drafting.

Matthew Cameron is a partner with Ashtons Legal.