Life and succession insurance: how to protect money for your grandchildren?

In the “Great Savings Rendez-vous” (Capital / Radio Patrimoine), Amélie Ziegelmeyer, regional director private management at Laplace, responds to a worried auditor on the transmission of open life insurance on behalf of her grandchildren .

Capital video: Life insurance: How to reserve it for small children by avoiding parents?

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Each month, the “big savings meeting” (capital / radio heritage) answers your questions in the “your questions, our answers” sequence. Our experts – notary, heritage engineer, employee savings expert – enlighten you on all your questions, which they relate to your taxes, your succession, your placements, your retirement or your real estate assets. Here, Amélie Ziegelmeyer advises Colette, an auditor who opened life insurance in the name of her grandchildren whom she does not know because of a conflict with their mother. She is concerned about what would come from funds in the event of death before their majority.

The expert begins by recommending to Colette d ‘“Inform his notary of the existence of this life insurance contract, in order to anticipate the transmission and to ensure that this sum is well integrated into his heritage project”. A way to avoid any forgetting during the settlement of the succession. Regarding the management of the contract after his death, a solution exists: “It is possible to appoint a third party administrator in the beneficiary clause. This person, who can be a family member, a friend or even a wealth management company, will be responsible for ensuring good capital management for grandchildren. ” A precaution which therefore makes it possible to prevent the parents of children from taking control of the funds themselves.

However, Amélie Ziegelmeyer recalls that this solution, if it is practiced, could be legally attacked: “Article 384 of the Civil Code does not mention life insurance as a contract that can be administered by a third party in place of the legal representatives of the child. This is still a legally debated question. ” To get around this difficulty, the expert advises writing a will: “Bequeath capital via a will makes it possible to introduce a third party administrator, but the disadvantage is that the grandchildren would then benefit from a lower tax reduction than to life insurance (1,594 euros if the parents are still alive) , then will then apply the scale inheritance tax Directly 20% for example beyond 15,933 euros. ”

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A question about your investments, a succession, your taxes or your real estate investments? Each month, we will select several and subject them to our experts who will enlighten you on all the subjects that affect your money. To ask them your questions, an address: question@capital.fr