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Husband wants my grandchildren to inherit
We live in France and have a usufruit will signed six years ago. My husband wants my grandchildren to inherit his share. He has no children. I will leave my share to my two sons. What would go to the grandchildren if I die first?
You have French wills drafted by a notaire, each leaving a life interest (usufruit) to the survivor.
We understand that under your will the legal ownership (nue propriété) goes to your sons (their right in French law) with usufruit for your husband and, in his will, he leaves his share to your grandchildren (not his blood relations), subject to your life interest. He can leave his share to whom he wishes (assuming no tontine is in the purchase deed and there is no French marriage contract).
If he dies first, the usufruit to you is exempt from inheritance tax; but an age-linked value is attributed for the property for your grandchildren and, as they are not his blood relatives, they face 60% tax on assets over €1,594. You are French-resident so your worldwide estate will be assessed for French tax. On your subsequent death, your estate passes to your sons (your grandchildren already own the other part). If you die first, your husband has a life interest, your sons inherit the nue propriété (usufruit valued as before). Your sons each benefit from €100,000 tax free and then sliding-scale tax from 5% to 45%. When your husband dies, your grandchildren inherit his share.