In a landmark decision issued recently, the French Supreme Court (Cour de cassation) reaffirmed the principles governing the calculation of the freely disposible (quotité disponible) part of the estate in inheritance cases, particularly when assets are sold after the deceased’s death.
The freely disposable part of the estate ranges from one quarter to three quarter’s, depending on the number of children, each of whom has a reserved right to a share. If there are no children, there is no reserved portion, though the surviving spouse retains specific rights.
This ruling, arising from a complex family dispute, confirms that the value of assets at the time of death remains the rule, whether the assets are existing or those previously gifted.
Details of the Case
This ruling arose from a complex family dispute concerning the estate of a husband and father who died in 2006, leaving behind his spouse and children.
Among his assets was a property that he had made available to one of his daughters as early as 1969.
In a handwritten will dated 2005, he bequeathed the freely disposable portion of his estate to this same daughter.
After his death, the property was sold in 2017 for €451,000.
The central issue in the dispute was whether the value of the property at the time of death (2006) or at the time of sale (2017) should be used to calculate the freely disposable portion.
The Versailles Court of Appeal had chosen the latter, citing an Article in the Civil Code, which states that “if assets have been alienated, their value at the time of alienation shall be taken into account.” The court therefore used the value of €451,000 to use as the basis for calculating the available portion.
However, the Supreme Court overturned this decision following an appeal by another heir.
The Court reaffirmed that the value of assets at the time of death must be used to calculate the freely disposable portion, provided those assets were part of the estate at the time of death—even if sold later.
In this case, the property was part of the deceased’s estate at the time of his death. It was not a previously gifted asset, and its value at the time of death should have been used to calculate the available portion.
The case was further complicated by the fact that the daughter had not only received the freely disposable portion but had also enjoyed an indirect benefit: free use of the property since 1969. The lower courts valued this benefit at €212,380 and ordered its return to the estate for the portion exceeding the bequeathed freely disposable portion.
The Supreme Court did not challenge this valuation but reiterated that the available portion must be calculated based on the property’s value at the time of death, not its later sale value. This distinction ensures that the distribution of the estate remains unaffected by post-death market fluctuations.
The decision had major financial implications for heirs. Recalculating the available portion based on the property’s value at the time of death significantly altered the share received by the legatee of the available portion.
Related Reading:
