THE BIG MOVE

What are the im­pli­ca­tions for a cou­ple or fam­ily re­lo­cat­ing to France? Ni­cole Gal­lop-mil­don and Claire Wood high­light some of the dif­fer­ences be­tween French and UK law

French Property News - - Expert Advice -

If you’re a cou­ple re­lo­cat­ing to France, you should care­fully con­sider how the move will af­fect the ar­range­ments be­tween the two of you, and what steps you should take be­fore the move.

By be­com­ing res­i­dent in France, there may be un­ex­pected consequences such as deemed changes in as­set own­er­ship, suc­ces­sion is­sues and the po­si­tion on any divorce. The as­sets avail­able to any third-party cred­i­tors or trustee in bank­ruptcy will also de­pend on the mat­ri­mo­nial regime (whether it is cho­sen or deemed).

Any­one who is a trustee set­t­lor or ben­e­fi­ciary of a trust should also take ad­vice be­fore mov­ing to France.

Mar­riage con­tracts All mar­ried cou­ples in France are deemed to be cov­ered by a mat­ri­mo­nial regime. This may ei­ther be by de­fault or by choice (if they en­ter into a mar­riage con­tract). The mar­riage con­tract de­ter­mines what each cou­ple owns and is en­ti­tled to when the mar­riage ends, ei­ther be­cause of divorce or on death.

A French mar­riage con­tract is very dif­fer­ent to a Bri­tish prenup­tial agree­ment. A mar­riage con­tract is part of French law and there are de­tailed rules on how shares are worked out.

De­pend­ing on cir­cum­stances, Bri­tish cou­ples who move to France and do not have a prenup or mar­riage con­tract may be deemed to be mar­ried un­der the French regime of sé­pa­ra­tion de biens (sep­a­ra­tion of as­sets), which means that each owns broadly what is in their own name out­right and half of what they own jointly.

A mat­ri­mo­nial regime can be changed by agree­ment be­tween the spouses by en­ter­ing into a mar­riage con­tract, which should be for­mally reg­is­tered.

It is not cer­tain that a Bri­tish prenup­tial agree­ment will be recog­nised and up­held in France (in the same way that a French mar­riage con­tract is not au­to­mat­i­cally en­force­able in the UK). When draft­ing prenup­tial agree­ments for French clients, we en­sure that a French fam­ily lawyer is in­volved to make the agree­ment French com­pli­ant and has con­sid­ered ju­ris­dic­tion clauses.

Com­par­ing a French mar­riage con­tract to a Bri­tish prenup is like com­par­ing ap­ples and pears; prenups are not like French mar­riage con­tracts as they are fo­cused on the out­come on divorce, rather than reg­u­lat­ing how the spouses own prop­erty gen­er­ally (in life and in death). The best ad­vice is to re­view your po­si­tion be­fore you move to France and then en­ter into a tai­lored French mar­riage con­tract ap­pro­pri­ate to your sit­u­a­tion.

Like­wise, French na­tion­als mov­ing to the UK should be aware that a French mar­riage con­tract is un­likely to be up­held in the event of divorce, so cou­ples should en­ter into a post-nup­tial agree­ment to prop­erly pro­tect their po­si­tions in the UK.

Suc­ces­sion In French law, on the death of the first spouse, the first step is to wind up the mat­ri­mo­nial regime, and once that is done, es­tab­lish what as­sets form the first spouse’s es­tate and who in­her­its them.

Where a cou­ple are mar­ried un­der a form of com­mu­nity regime, the de­ceased spouse’s es­tate will in­clude half the com­mu­nity as­sets as well as the de­ceased spouse’s non-com­mu­nity as­sets. If the cou­ple en­tered into a mar­riage con­tract, this may spec­ify that on the first death, the sur­viv­ing spouse re­ceives all the com­mu­nity as­sets. This trans­fer of the com­mu­nity as­sets is a re­sult of the mat­ri­mo­nial regime, and does not form part of the es­tate and/or the suc­ces­sion.

This is im­por­tant be­cause in French law, cer­tain fam­ily mem­bers are ‘re­served’ or ‘forced’ heirs. Where there are chil­dren, they are the re­served heirs, but it may also be the spouse if there are no chil­dren. There are sig­nif­i­cant re­stric­tions on tes­ta­men­tary free­dom on French law, and they vary ac­cord­ing to the de­ceased’s per­sonal cir­cum­stances. Ac­cord­ingly, a sur­viv­ing spouse may be best pro­tected un­der a mat­ri­mo­nial regime.

For Bri­tish na­tion­als liv­ing in France, it may be pos­si­ble to choose UK laws to ap­ply to their es­tate. How­ever, the tech­ni­cal consequences of this need to be thought through – in par­tic­u­lar, the po­ten­tial am­bi­gu­ity over which law ap­plies to which as­sets when an­a­lysed un­der UK laws and un­der French law.

Divorce The dif­fer­ence be­tween the UK and French out­comes on divorce can be sig­nif­i­cant. The French court’s ap­proach to spousal

main­te­nance is gen­er­ally much less gen­er­ous than in the UK.

In Bri­tain, the courts have dis­cre­tion as to how as­sets should be split in an eq­ui­table way. In France, the court will look at the mar­riage con­tract (or de­fault mat­ri­mo­nial regime) to de­ter­mine how as­sets should be di­vided and there is no dis­cre­tion.

Cou­ples mov­ing to France should there­fore be aware of the dif­fer­ences and the rules about where pro­ceed­ings can com­mence. If a Bri­tish cou­ple move to France then un­der the cur­rent reg­u­la­tions (which may change af­ter Brexit) both the UK and France may have ju­ris­dic­tion to hear divorce pro­ceed­ings and there could be a race to is­sue in the coun­try which is more ad­van­ta­geous to one party.

On mov­ing, the cou­ple can stip­u­late in their mar­riage con­tract how they own their as­sets, which will al­low them to make a choice about which court deals with the main­te­nance as­pects of the divorce.

Chil­dren Re­lo­ca­tion to France will also have an im­pact on any le­gal is­sues re­lat­ing to chil­dren. Un­der the rel­e­vant Euro­pean rules, de­ci­sions about chil­dren in the event of a divorce will gen­er­ally be heard in the coun­try where they are ha­bit­u­ally res­i­dent.

On divorce, if one party wants to re­lo­cate to the UK with the chil­dren (and this is not agreed) the French court will need to make a de­ci­sion about the pro­posed move back home.

Third-party cred­i­tors A cou­ple’s as­sets which are avail­able to cred­i­tors or a trustee in bank­ruptcy de­pend on the mar­riage con­tract. If a hus­band has debts then, un­less a wife has agreed that her as­sets are at risk, the cred­i­tors are only able to go against the hus­band’s as­sets.

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