In the event of death, thelife insurance is not part of the classic inheritance of the deceased. True or false? Well, it’s true, as Camille Guillaume, associate notary, specializing in family law at the Vendôme Notaire firm, explains to us: “ L’life insurance does not enter into the inheritance and when we talk about inheritance, we must always differentiate between the civil aspect and the tax aspect. From a purely tax point of view, life insurance is not governed by inheritance tax taxation. It is a plan that is specific to it, depending on the age at which the premiums were paid on the contract “.
Before 70 yearsthe specific exemption for life insurance is 152,500 euros per beneficiary. “ It is therefore interesting to have life insurance in your estate from a tax perspective because it allows you to have two different exemption regimes. », Analyzes the notary. On the other hand, if the payments were made after 70 yearsthe reduction is 30,500 euros. “ Please note, this is not per beneficiary but divided between the beneficiaries and between all contracts on which there were payments after this age. Beyond that, it is taxed according to inheritance tax “.
Variable release times
Depending on the age at which the premiums were paid, the release of funds may be quite fast. This is particularly the case when they were paid before age 70 since “ taxation is managed directly by the insurance company “. After 70 years? “ You are obliged, before the funds are released, to declare the contract to the tax services, which can take time depending on processing times of the department concerned », Announces Camille Guillaume.
So what constitutes a classic succession? Everything else, be it real estate, bank accounts, a business, furniture, cars, etc. “ All other components of the heritage are included in the inheritance », she describes. This is why life insurance is of great interest, to multiply the forms of transmission and therefore different tax regimes. “ Particularly for people who do not have children or direct heirs, to avoid being heavily taxed “.
A legal system
If life insurance is an inheritance device, it is also a legal device which allows amounts to be removed from the inheritance, which means that they do not fall within the distribution obligations between the children. “ There must still be a system to protect children in case a person wants to empty their assets and put everything for the benefit of a third party.alerts Camille Guillaume. Children can set up a premium reduction action which would be clearly excessive “.
