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Inheritance: can a child inherit life insurance?

Life insurance is often compared to a Swiss army knife of savings. And it’s not for nothing. Both a savings product and a tax envelope, the preferred investment of the French, also offer advantages at the time of inheritance. A final feature which is of great interest to our reader, Lucie. She can no longer get along with one of her two daughters, whom she simply wants to disinherit in favor of her other child, whose fragile health may soon lead to high medical expenses. To achieve her goals, she is thinking of using her life insurance, generously provided. Unaware of the rules she must follow, she seeks the help of experts from the “Grand rendez-vous de l’├ępargne” (Capital / Radio Patrimoine) in order not to take any risks and ensure that her money goes to the girl she leads after. she chose. Nathalie Couzigou-Suhas, a notary in Paris, is responsible for the information.

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Our expert will first remind you of a few basic rules about inheritance, especially the one dealing with the inheritance reserve, i.e. “the part that is reserved for your children in your estate. We cannot completely inherit them”, Nathalie Couzigou-Suhas therefore decides immediately. It is up to you, during your lifetime, to use your assets as you wish and ultimately leave nothing to your heirs. But it is not our reader’s will that must therefore comply with the inheritance reserve rule: “When Lucie dies, the notary will recompose the mass of property left by the deceased and what was given from her while alive,” she says. In Lucie’s case, the reserve share for each of her daughters amounts to one-third, the available share – which our reader is free to assign – also one-third.

How does one of his daughters benefit under these circumstances? First of all, by making a will to “give more to his exposed daughter, bequeath her the available part and therefore (in total, editor’s note) two-thirds of the estate, so that Lucie’s second daughter only gets one third party”. recommends Nathalie Couzigou-Suhas.

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Life insurance is out of the estate

Additional option, mobilize the powerful weapon of life insurance. Because “yes, if Lucie wants to benefit one of her daughters, life insurance can be a good way to bypass the reserve”, appreciates the expert. By designating his second daughter through the recipient clause, our reader can benefit her considerably over her sister. Yes, “the insurance code, in article L132-12, establishes the principle that the capital received by the beneficiary is never supposed to pass through the estate, that it leaves the estate”. In other words, life insurance is not included in the estate subject to the reserve rule… and also benefits from advantageous taxation with a deduction of 152,500 euros to the beneficiary.

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But there again, it is impossible to completely inherit one of your children. Several limits are actually imposed by law. First, if the premiums (payments) are “manifestly excessive”, they can be reintroduced into the estate. To avoid this pitfall, Nathalie Couzigou-Suhas recommends avoiding “one shot” payments, i.e. payments made at once for large amounts and that regular supplementary payments are preferred over the long term. Another limitation to keep in mind: the usefulness of the operation to the subscriber. “If a 90-year-old person with terminal cancer puts 300,000 euros on a life insurance contract, there will be no risk and this amount risks being returned to the estate”, warns the expert.

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