Inheritance – Foreign law and concept of hereditary reserved share of the Estate

A foreign law that ignores the concept of hereditary reserved share of the Estate (« réserve héréditaire ») is not in itself contrary to French international public policy

By two decisions of September 27, 2017 (Nos. 16-17198 and 16-13151), the First Civil Division of the French Supreme Court ruled on the application to an Estate of a foreign law that ignores the French concept of hereditary reserved share of the Estate (« réserve héréditaire »).

In both cases, the deceased, who died in California (United States), where he had his last domicile, had organized his Estate by setting up a « family trust » to which all his assets had been transferred, and with the surviving spouse being its sole beneficiary, and, upon his death, the children of their union.

The dispute arises because the children of the previous union(s) are thus excluded from their father’s Estate. They bring an action on the basis of the right of deduction – meanwhile declared contrary to the Constitution (Decision No. 2011-159 QPC) – to claim their reserved shares in the Estate on the basis of the application of French law, on the grounds that the Californian law normally applicable but ignoring the concept of hereditary reserved share is contrary to French public policy.

The French Supreme Court held, however, that « the foreign law designated by the rule of conflict which ignores the hereditary reserved share of the Estate is not in itself contrary to French international public policy and can only be rejected if its concrete application, in the present case, leads to a situation incompatible with the principles of French law considered essential ».

The question remains as to which principles of French law should be considered essential.

In this respect, in both cases, the Supreme Court points out that the heirs of the Estate who were evicted from the Estate by the application of foreign law were all over the age of majority at the time of death, were not in a situation of economic precariousness or need, but above all, that the deceased had an old and durable settlement in California (United States).

It was undoubtedly the latter element that was decisive, in the sense that there was no fraud in the determination of the law applicable to the Estate.

Indeed, the deceased had had their permanent residence in the United States for many years and a large part of their movable and immovable property assets were also located in the United States. In addition, one of the deceased had contracted his unions in the United States, and the other had registered his will there.

These Estate therefore undoubtedly had genuine links with the United States, justifying the application of Californian law, as designated by the rule of conflict. 

These decisions confirm that the hereditary reserved share of the Estate is not in itself an essential principle of French inheritance law.

Moreover, since the entry into force of European Regulation No. 650/2012 on Inheritance, which allows one to choose the law applicable to his Estate, there will be more and more situations similar to those cases, as often as the law chosen by the deceased to govern his Estate will ignore the concept of hereditary reserved share.

But then, would we be able to question the application of the chosen law, if the precise purpose of this choice was to exclude the reserved heirs from the Estate ?

Audrey KANDALA

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