The commencement of an estate results in the commencement of an estate indivision that only terminates once the estate has been distributed.
Scope of inheritance indivision :
During the indivision, the heirs possess jointly all assets of the succession. They are only able to carry out specific types of acts on these joint assets (article 815 and following of the French civil code).
All produced income during the indivision becomes joint and part of the common assets (article 815-10 paragraph 2 of the French civil code).
The heirs will receive their legal share during the distribution of the estate (“le partage”).
The indivision is settled by the law unless the heirs decide to organize it contractually.
a) The legal indivision:
Management of the assets is limited by the indivision. The law specifies the different types of acts that the inheritors can take on joint assets.
The heirs can take alone all necessary measures regarding the preservation of an asset (article 815-2 of the French civil code).
The majority of two thirds is required for any act of management or administration. Other joint heirs must however be warned of these type of acts subject to unenforceability (article 815-3 of the French civil code).
The sale of an asset must be authorized by the majority of two thirds of the joint heirs subject to the fulfillment of certain conditions. According to article 815-5-1 of the French civil code, the joint heirs must make known their intention to sell an asset to the notary. The notary must within one month inform the other joint heirs by formal notification (“signification”). If the other heirs oppose it or do not formulate any reply within three months following the notification, the First instance court (“tribunal de grande instance”) can authorize the sale of an asset if it does not carry an excessive breach of the minority holding heirs’ rights.
Finally, unanimity is required for any act of disposition outside the scope of normal use of joint assets (article 815-3 paragraph 3 of the French civil code).
Therefore, joint heirs can use joint assets in accordance with their rights. If these rights are breached, a joint heir that privately enjoys joint assets will owe compensation (article 815-9 of the French civil code).
b) The contractual indivision:
The heirs can choose to organize the indivision throughout an agreement (article 815-1 of the French civil code).
This agreement requires a writing that lists all assets included in the indivision and details the different rights of the joint heirs. It must indicate the conditions in which the joint assets can be used.
When a real estate property is part of the estate of the indivision, the agreement must be written by notarial deed and published at the land registry (“registre de la publicité foncière”).
A manager that can be a joint heir or a professional can be designated to manage the joint assets. The agreement must specify the powers of the manager.
The indivision will terminate on the date set in the agreement by the heirs.
If a date is agreed on, the distribution of the estate will only be able to take place on the chosen date. If the term of the agreement is undetermined, the distribution of the estate can take place at any time.
Article 815 of the French civil code specifies that: “No one may be forced to remain in indivision and partition may always be demanded, unless it has been suspended by judgment or agreement.”
Termination of the indivision: amicable and judicial distribution:
The joint heirs can decide on an act of distribution together in order to terminate the indivision. If an agreement is not reached, the distribution of the estate can be made judicially.
The joint heir can also terminate the indivision by giving or selling his share in the indivision or a determined asset.
a) Amicable distribution (“partage amiable”):
An amicable distribution requires a written agreement on the principle of distribution and the allocation of assets between the heirs. However, if the assets include a real estate asset, the act of distribution must be passed by notarial deed (article 835 of the French civil code). The distribution of a real estate asset must be published at the land registry by the notary that will charge 0,1% of the value of the real estate asset to fulfill this formality.
If the distribution by notarial deed is superior to 60 000€, the notary will retain a fee of 1,03125%.
In the event of a passive heir, the joint heirs can formally notify the latter in order for him or her to be represented at the distribution. The passive heir then must within three months appoint an authorized representative. The lack of designation allows the other heirs to address a request to the judge in order to appoint an authorized representative until the complete achievement of the distribution (article 837 of the French civil code).
The heir that is prejudiced from more than one quarter of his rights can carry out an action in addition of share (“action en complement de part”). This action is possible in the two years following the distribution (article 889 of the French civil code). The heir will receive an addition in nature or in cash from the other joint heirs.
b) Judicial distribution (“partage judiciaire »):
Judicial distribution intervenes when the heirs cannot agree on an amicable distribution. One of the heirs can challenge the handling of the distribution or refuse to consent to it.
The request in distribution must be formulated in front of the first instance court (“tribunal de grande instance”) of the last residence of the deceased (article 840 of the French civil code). At this request, must be enclosed a summary description of the estate to be shared, the intentions for the distribution of assets and the fulfilled diligences in order to reach an amicable distribution (article 1360 of the French civil procedure code).
In simple situations, the judge can order the distribution and send the heirs in front of a notary to formalize the act of distribution (article 1361 of the French civil procedure code). An expert can be required to valuate the assets.
In more complex situations, the court can designate a notary to undertake the operations of distribution that the judge supervises. The notary is required to establish the settlement state (“état liquidatif”) within one year and the documents tracing the accounts between heirs, determine the mass to be distributed, set the rights of each party as well as the content of lots to be shared. At the expiration of this time limit, the notary must send a report (“procès-verbal”) detailing all challenges from heirs on the distribution that the judge will rule on.
Maître Frédéric Michel – Fairfield Law firm | Lawyer in Cannes
