Donations and wills: what impact on the division of the estate?

Gifts and wills allow individuals to organize the transfer of their assets, either during their lifetime or upon their death. However, this freedom is not absolute: the law protects certain heirs through the concept of the reserved portion of the estate. What are the concrete effects of these gifts on the division of an inheritance? How can the heirs entitled to this reserved portion enforce their rights? This article presents the rules relating to the disposable portion, the right to bring an action for reduction, the accounting of gifts, and the advance waiver of the right to bring an action for reduction.

1. Gifts and wills: a freedom limited by the disposable portion

Anyone can prepare for the transfer of their assets through two main methods:

• gifts inter vivos, which produce their effects during the donor's lifetime;
• The will, which allows one to make one or more bequests taking effect upon the death of the testator.

The freedom to pass on one's assets is, however, limited by the reserved portion, defined byArticle 912 of the Civil Code as the share of property and inheritance rights which the law ensures will be passed on free of any encumbrances to certain heirs known as forced heirs.

The portion of the estate that the deceased can freely dispose of is called the disposable portion. Gifts—donations and bequests—that exceed this portion and infringe upon the reserved portion can be reduced at the request of the forced heirs.

If there are descendants, the deceased's children are forced heirs. If there are no descendants, the surviving spouse (if not divorced) is entitled to a reserved portion equal to one-quarter of the estate, in accordance withArticle 914-1 of the Civil Code.

To delve deeper into this issue, also consult our article dedicated to the calculation of the reserved portion of the estate and the rights of children.

How is the reserved portion of the estate protected?

Protecting the reserve involves several operations:

• determine the calculation mass of the estate;
• calculate the reserved portion of the estate and the disposable portion;
• identify the donations and bequests made by the deceased;
• to allocate the various gifts;
• to determine if they exceed the available portion;
• to implement, where appropriate, the reduction of excessive gifts.

The assets used to calculate the reserved portion do not necessarily correspond solely to those present in the estate on the day of death. Pursuant to Article922 of the Civil Code, it is necessary, in particular, to notionally add to the existing assets the value of assets disposed of by the deceased through gifts inter vivos, after deduction of debts.

Example of a donation that infringes on the reserved portion

The deceased leaves two children. The estate to be calculated amounts to 300,000 euros.

With two children, the total reserved portion represents two-thirds of this estate, or 200,000 euros. The disposable portion is equal to the remaining third, or 100,000 euros.

If the deceased made a gift of €150,000 to a third party, and no other factors alter the calculation, this gift exceeds the disposable portion by €50,000. The children can then bring an action to reduce the gift in order to have their reserved portion restored to the amount of this sum.

The available portion depends on the number of children

Article913 of the Civil Code determines the reserved portion of the estate and the disposable portion according to the number of children:

Family situation	Available quota	Global heirship reserve
A child	1/2 of the heritage	1/2 of the heritage
Two children	1/3 of the heritage	2/3 of the heritage
Three or more children	1/4 of the heritage	3/4 of the heritage
No descendants, but a surviving spouse who was not divorced	3/4 of the heritage	1/4 of the heritage

In the absence of descendants and a surviving spouse who is not divorced, there are no forced heirs. Subject to other specific rules, the deceased can therefore dispose of their entire estate.

2. Action to reduce excessive donations and bequests

The action for reduction allows a forced heir to have the infringement of their reserved portion by a gift or bequest exceeding the disposable portion penalized.

Article920 of the Civil Code specifies that gifts infringing upon the reserved portion of the estate are not automatically reduced. Reduction can only be requested after the opening of the succession and only by those persons legally entitled to bring such a claim.

Who can bring an action for reduction?

The action belongs primarily to the forced heirs:

• the descendants of the deceased;
• in the absence of descendants, the surviving spouse who is not divorced.

The right to take legal action can also be transferred to the heirs or successors in title of the forced heir. The latter's creditors may, under certain conditions, exercise their rights and actions through a subrogatory action.

On the other hand, the beneficiary of an excessive gift cannot spontaneously claim the reduction to challenge the provisions made in his favor.

What is the time limit for filing a claim for reduction?

Article921 of the Civil Code provides that the action for reduction is time-barred after five years from the opening of the succession or after two years from the day on which the heirs became aware of the infringement of their reserved portion, without being able to be exercised more than ten years after the death.

Settling an estate involving old gifts therefore requires quickly gathering the deeds, valuations, statements and other elements that allow the deceased's assets to be reconstructed.

How is the reduction carried out?

The reduction is generally made in monetary terms. The beneficiary of the excessive gift must compensate the forced heirs up to the amount exceeding the disposable portion.

According toArticle 924 of the Civil Code, the recipient may in principle keep the gift, provided they pay compensation to the forced heirs. However, certain situations may lead to a reduction in kind.

An action for reduction therefore does not systematically lead to the cancellation, even partial, of the donation or bequest.

3. Gifts, their inclusion in the estate and equality among heirs

Gifts made to an heir can produce another effect during the division of the estate: they may be subject to being brought back into the estate.

The inheritance report is distinct from the reduction. It aims to preserve equality between the co-heirs by taking into account gifts previously received by some of them.

In accordance with Article843 of the Civil Code, any heir coming into the estate must in principle report to his co-heirs the gifts received from the deceased, except when these were expressly granted to him outside of the inheritance share.

Which donations are taxable?

A gift made to an heir is generally presumed to have been made as an advance on their inheritance. It must then be taken into account during the division of the estate.

Conversely, a gift made outside of the inheritance share is intended to benefit its beneficiary. It is deducted from the disposable portion and is not subject to collation, without, however, infringing upon the reserved portion of the other heirs.

In practice, it is therefore necessary to check:

• the beneficiary's status as an heir;
• the exact terms of the deed of gift;
• the existence of an exemption from reporting;
• the value to be retained at the time of sharing;
• the possible existence of an infringement of the reserve.

How is the report produced?

The report is generally made in monetary terms. The gift is not materially cancelled: its value is taken into account in the liquidation and division proceedings in order to determine the rights of each heir.

The action for restitution is exercised within the framework of the division of the estate. The restitution is only due to the co-heirs and does not benefit the legatees or the creditors of the estate.

The surviving spouse, when inheriting as a co-heir, may be affected by these transactions. Certain gifts subject to collation are also taken into account when calculating their full ownership rights under the conditions stipulated inArticle 758-5 of the Civil Code.

4. Reduction and relation to succession: two different mechanisms

The inheritance report and the action for reduction pursue different objectives.

Mechanism	Objective	Gifts concerned	Main effect
Inheritance report	Preserve equality between co-heirs	Primarily, donations made as an advance on inheritance	Taking into account the value of the gift in the division
Sale	Protecting the reserved portion of the estate	Donations and bequests exceeding the disposable portion	Payment, in principle, of a reduction allowance

A single donation can be subject to both mechanisms. In this case, the following procedures must be carried out successively: reporting, allocation, and, if necessary, reduction.

5. Waiving the right to bring an action for reduction in advance: the inheritance agreement

A forced heir cannot renounce their status as an heir in advance, nor, more generally, their reserved portion. However, they can agree, within a strictly regulated framework, not to subsequently bring an action to reduce a specific gift.

This operation is called an advance waiver of the right to bring an action for reduction, or RAAR. It is sometimes referred to as a succession agreement.

The waiver may cover all or part of the potential infringement on the reserve. It may be established in favor of one or more specific persons.

It allows, in particular:

• to facilitate the transfer of a family business;
• to give an advantage to a child with a disability;
• to pass on a specific asset to one of the heirs;
• to secure an asset organization accepted by the family;
• to prevent a specific gift from being challenged after death.

What are the conditions for the waiver?

The renunciation must be freely given and with full knowledge of its consequences. It is recorded in a specific authentic instrument executed before two notaries. Each party renouncing signs the instrument separately in the presence of only the notaries.

The renunciation has no effect if it has not been accepted by the person from whom the renouncer is entitled to inherit.

It is not considered a donation and does not, in itself, constitute a taxable transaction, in accordance with Article756 bis of the General Tax Code.

Can an advance waiver be reversed?

The waiver is, in principle, irrevocable. However, the waiving party may request its revocation in the limited cases provided for inArticle 930-3 of the Civil Code, in particular:

• when the donor no longer fulfills his maintenance obligations towards him;
• when, on the day the succession is opened, he finds himself in a state of need which would disappear if he had not renounced;
• when the beneficiary of the waiver has committed a crime or offense against his person.

The advance waiver of the right to bring an action for reduction must therefore be carefully prepared and adapted to the financial and family situation of the persons concerned.

Frequently asked questions about gifts and wills

How do gifts and wills affect the division of an inheritance?

Gifts made before death and bequests stipulated in a will are taken into account when settling the estate. They may be reduced if they infringe upon the reserved portion of the estate. Gifts made to an heir may also be subject to collation in order to preserve equality among the co-heirs.

What is the difference between an action for reduction and a report to the estate?

An action for reduction penalizes exceeding the disposable portion and protects the reserved portion of the estate. The accounting for inheritance aims to restore equality among the co-heirs by taking into account any gifts previously received by some of them.

The report does not call into question the donation. The reduction, in principle, obliges the beneficiary of the excessive gift to pay compensation to the forced heirs.

Does a gift made to a child always have to be included in the estate?

No. A gift made as an advance on inheritance is generally subject to collation. A gift expressly made outside of the inheritance share is not, but it is deducted from the disposable portion and can be reduced if it infringes on the reserved portion of another heir.

Can a forced heir renounce their reserved portion?

An heir cannot simply renounce their reserved portion of the estate during the lifetime of the future deceased. However, they can, through a notarial deed meeting strict conditions, waive in advance the right to bring an action for reduction against a specific gift.

Is the surviving spouse still a forced heir?

No. The surviving spouse is only a forced heir if the deceased has no descendants. In this situation, their reserved portion represents one-quarter of the estate. If there are children, the reserved portion belongs to the descendants.

Can a donation be challenged after death?

A gift duly made is not automatically revoked upon the donor's death. However, it may be subject to collation if it was received by an heir as an advance on their inheritance. It may also be reduced if it exceeds the disposable portion and infringes upon the reserved portion of the estate.

Conclusion

Gifts and wills are essential tools for organizing the transfer of assets. However, their effectiveness depends on respecting the reserved portion of the estate, the disposable portion, and the rules relating to inheritance reporting.

Analyzing prior gifts, their classification, allocation, and the valuation of transferred assets can have a decisive impact on each heir's rights. Careful planning helps minimize the risk of disputes and secure the future distribution of the estate.

In the event of difficulties relating to the settlement or division of an estate, the lawyers ofARST Avocats can analyze the deeds of gift and testamentary provisions, assess the existence of an infringement of the reserved portion and support the heirs in the context of an amicable division or an inheritance dispute.

If you are facing a problem with donations, wills or more generally inheritance, our personal law department can assist you, contact us.

Article written by Olivier Paquereau and Morgan Jamet