Anticipating the transmission of your assets is not trivial, especially when age begins to weigh in the tax equation. In France, a few years difference is enough to increase the bill for the heirs.
Transmitting real estate, savings or a life insurance contract is not just a simple administrative formality. Behind these decisions, there are precise tax rules, and above all a timetable that can change everything. As we get older, the room for maneuver becomes smaller, the allowances change and certain schemes become less advantageous. As a result, two almost identical situations can produce significant tax differences, simply because they were not anticipated at the same time.
In notarial studies, this observation often comes up. Parents who begin to organize their estate at the start of retirement benefit from much more flexible conditions than those who wait a few more years. The French system is largely based on abatements, that is to say amounts transmitted without taxation, which can be renewed every fifteen years. A parent can thus give up to 100,000 euros to each of their children without paying duties. Using these thresholds gradually allows you to reduce the overall tax impact at the time of death, but you still have to start early enough to take full advantage of them.
Real estate illustrates this logic well. Many families opt for property dismemberment, a technique which consists of separating the usufruct, retained by the parent, and the bare ownership, transmitted to the children. This strategy makes it possible to prepare for succession while maintaining use of the property. But the tax value of these two shares changes with the age of the donor. Between 61 and 70 years of age, usufruct still represents 40% of the property, and bare ownership 60%. Beyond that, the balance shifts: usufruct decreases to 30%, while bare ownership increases to 70%. Concretely, the later the donation occurs, the more the tax base increases, and therefore the higher the duties to be paid. On a property estimated at 500,000 euros, the difference can amount to thousands of euros for each child, without the value of the property having changed.
In this context, the 70-year mark marks a real turning point: beyond this age, passing on one’s assets costs significantly more. This threshold modifies the fiscal balance in several situations, by reducing the advantages and increasing the taxable portion of the assets transferred. The closer we get, the tighter the room for maneuver, particularly because there is not enough time to fully use the reductions renewable every fifteen years. Waiting often means concentrating the transfer over a shorter period, with less favorable taxation and more taxed amounts.
Moreover, this reasoning also applies to life insurance, often presented as a preferred tool for transferring assets under good tax conditions. Here, it all depends on the date on which the payments were made. Amounts paid before a certain age benefit from a reduction of 152,500 euros per beneficiary at the time of death, which allows large amounts to be transmitted with little or no tax. On the other hand, payments made later are subject to a much less favorable regime. The reduction falls to 30,500 euros, shared between all beneficiaries, and the rest is integrated into the classic inheritance. In other words, funding a contract late generally means losing a large part of the initial tax advantage.
