Dutreil Pact & Estate Planning: The expert guide to navigating inheritance, taxation and family protection

In summary…

A inheritance Inheritance is a heavily taxed process. Between strict tax deadlines (six months to pay) and the complexity of French civil law, inheritance can quickly become a financial and emotional burden. The key lies in planning ahead: the combined use of renewable allowances, usufruct, and assurance-vie can reduce the average tax burden by two-thirds, while also mitigating the risk of family conflicts.

A few months ago, I was accompanying a family from Lyon whose father, a business owner, had just passed away suddenly. Beyond their grief, the heirs were facing a brick wall: a wealth Significant real estate holdings but little liquidity, and a bill of inheritance rights amounting to several hundred thousand euros to be paid within 6 months. "How can one owe so much on money that has already been taxed all one's life?" the eldest son asked me.

This is the harsh reality of the inheritance in France when it is not orchestrated. At Balmont Conseil, We intervene to transform this moment of vulnerability into a controlled transition. As the first AI-enhanced wealth management firm, we combine algorithmic precision with a human approach to secure your legacy.

Understanding the inheritance The fundamentals

There succession is the legal and fiscal process by which the assets of a deceased (real estate, bank accounts, works of art, debts) is transferred to his heirs or legatees.

The opening of the succession

It all begins at the time of the death. It is this precise moment that freezes the value of the assets and determines the applicable law. notary then plays a central role: he must establish the affidavit of heirship which lists the people entitled to receive the inheritance.

The heir's three options

In the event of an inheritance, you have a right of option:

1. Complete and unconditional acceptance: You receive the goods, but you also pay all the debts.
2. Acceptance up to the value of the net assets: You only pay debts up to the amount you receive (protection of personal assets).
3. Renunciation of inheritance: Often used to pass directly to the next generation (generation skipping) or in case of insolvency of the deceased.

Legal deadlines: The fiscal clock vs. civil time

This is where the most common mistake occurs. There is confusion between the time required to divide the assets and the time allotted for paying the tax.

• The 6-month tax deadline: That's the final deadline. You have 6 months from the date of death to file the inheritance declaration and settle the tax due. After this period, late payment interest (0.20 % per month) and penalties will apply.
• The civil time limit (10 years): This is the time an heir has to choose whether or not to accept the inheritance.
• The urgency of the settlement: If the estate includes buildings, the notary must draw up a property certificate to formalize the transfer of ownership with the Land Registry Service.

Alexis Sagnier's opinion: «"The tax authorities don't wait until you've sold the house to claim what's owed. That's why we systematically audit the liquidity of an estate: having 5 million euros in real estate and nothing in the bank is a major inheritance trap."»

Inheritance tax: Calculation and optimization mechanisms

The calculation of the’net taxable assets is a surgical operation. We start with the gross assets (everything the deceased owned), we deduct the inheritance liabilities (debts, funeral expenses), then the allowances are applied.

Tax allowances and progressive tax scale (2026)

L'’personal dejection depends on the relationship:

• Direct line (children): 100 000 €
• Siblings : 15 932 €
• Nephews and nieces: 7 967 €
• Spouse and civil partner: Total exemption from inheritance tax (but be careful, they don't inherit everything without a will!).

The burden of taxation

After the initial shock, the progressive scale applies. In direct line, it climbs up to 45 %. For third parties (or unmarried partners), it is 60 % from the first euro after a meager allowance of €1,594.

Anticipating the transfer: The strategist's tools

To reduce the taxation and avoid the’joint ownership In the event of a conflict, several levers can be activated during your lifetime.

The shared gift: Family peace

Unlike a simple gift, the donation-partage It freezes the value of the assets on the day of the deed. This prevents a situation where, at the time of the final division, a child has to compensate their siblings because the apartment they received has increased in value more than the others' stock portfolios.

Assurance-vie: The Swiss Army knife

L'’assurance-vie allows a transmission outside of inheritance. It is the ideal tool to reward a loved one (even without a family relationship) with ultra-low taxation (allowance of €152,500 per beneficiary before age 70).

The division of ownership

Giving away the bare ownership of one's real estate allows one to transfer the property while retaining its use and income (usufructUpon death, the usufruct ends and the heir becomes the full owner without any additional tax.

Attention : These arrangements are powerful but sensitive. A poorly drafted beneficiary clause or an improperly calibrated division of ownership can lead to tax reclassification.

[Book a business transfer audit with Alexis Sagnier]

Managing joint ownership: Avoiding asset deadlock

After a death, the heirs often find themselves in joint ownership. This means that every decision (works, sale, rental) requires the agreement of everyone or a qualified majority.

• Administrative acts: Require the majority of two-thirds of the undivided rights.
• Acts of disposition (sale): They require unanimity.

In cases of deep disagreement, the deadlock is total. We often advise implementing a representative or the drafting of a joint ownership agreement to streamline management during the period of division.

International inheritances: The trap of double taxation

If you reside abroad or own property outside of France, the inheritance It is becoming a global headache. Between the 2015 European Regulation and Article 750 ter of the French General Tax Code, the risk of double taxation is real.

THE tax residence The deceased's estate and that of the heir trigger cross-reporting obligations. At Balmont Conseil, we use AI to map tax treaties and identify available tax credits to protect your expatriate heirs.

Tax exemptions and benefits: What the tax authorities won't take from you

In a succession, The rule is taxation, but the exception often represents major opportunities. Balmont Conseil, We don't just calculate rights; we look for areas of’exemption total or partial as provided by law.

Exemptions related to the individual

• Spouses and civil partners: Since the TEPA law, the surviving spouse and the PACS partner are totally exempt from inheritance rights. Important: a PACS (civil partnership) absolutely requires a... will so that the survivor can inherit legally.
• National heroes and victims: France completely exempts inheritances from military, firefighters, police, police And customs officers who died on missions or from injuries sustained in the line of duty. The same applies to victims of terrorist acts or acts of war. It is the Nation's recognition, enshrined even in the General Tax Code.

Assets benefiting from preferential tax regimes

Certain goods, by their nature or social utility, benefit from massive tax reductions:

• Sole proprietorship & Dutreil Pact: Business transfer with a 75% discount % (see below).
• Forest and agricultural assets: Subject to a management commitment, these assets benefit from a 75% exemption on their value. This is a powerful tool for diversifying one's portfolio while preparing for its transfer.
• Historical monuments and protected natural areas: Under certain conditions of public access or agreement with the State, these assets can be transferred without taxes.
• Philanthropy: THE legacy to an association or to a foundation Properties recognized as being of public utility are completely exempt. This is a way to give meaning to one's assets while reducing the taxable base.

Tools and instruments of transmission: The strategist's arsenal

Transferring ownership is not just about giving; it's about choosing the right legal vehicle to minimize "tax friction".

The Life Insurance and PER duo

THE assurance-vie contract The remaining pillar is outside the estate (a tax allowance of €152,500 per beneficiary for premiums paid before age 70). Retirement Savings Plan (PER), Although included in the estate assets, it allows for the transfer of capital while optimizing one's own income tax during one's lifetime.

The Tontine: The banks' forgotten asset

A tontine clause allows joint owners of a property to stipulate that the last surviving owner will be considered the sole owner from the beginning. It is a powerful tool for protecting a partner's share of their primary residence, outside the rules of forced heirship.

Disaggregation, Gifts and Bequests

• Usufruct and Bare Ownership: By giving away the bare ownership, you transfer the future value without losing the current enjoyment.
• Family cash gift and manual gift: Simple tools, but they must be declared (form 2735) to start the 15-year period and clear the tax liability.
• Gift to the surviving spouse: It allows for a significant increase in the rights of the spouse, particularly in the presence of children from a previous marriage.

Special situations: When the succession becomes complex

There wealth management is never more crucial than when situations fall outside the standard framework.

Blended families and the protection of vulnerable people

In a blended family, The risk of seeing one's assets "go" to the spouse's family is real. We use wills or survivorship clauses here to balance the protection of the spouse and the inheritance of the children. For a minor child or a protected adult (below guardianship Or guardianship), the intervention of guardianship judge or family council is mandatory to accept the inheritance. The role of notary The aim here is to protect the interests of those who cannot defend themselves.

The international dimension: Home and location

This is the core business of Balmont Conseil.

• Tax residence in France or abroad: Article 750 ter of the French General Tax Code (CGI) defines whether France taxes all world wealth or only the properties located in France.
• International succession: A death abroad triggers conflicts of law. Which law applies? The law of habitual residence or the law of the property's location? Without planning, your heirs may face double taxation or insurmountable administrative hurdles.

Family conflicts and disagreements

L'’joint ownership is often the breeding ground for family conflicts. In the event of disagreements between heirs, The inheritance process can remain stalled for years. Our approach is to anticipate these stalls through well-designed posthumous mandates or gifts-partitions, so that settling the estate becomes a mere formality and not a legal battle.

Data Factsheet: Key figures of the succession

Answer Capsules

• Who pays the royalties? The heirs pay the tax, in proportion to what they receive, unless there is a specific clause in a will.
• Can we do without a notary? Mandatory if the assets exceed €5,000 or if they contain real estate.
• How to protect your spouse? Through marriage, the gift to the last surviving spouse or an arrangement of the matrimonial regime (full attribution clause).

Conclusion: Don't let the state become your primary heir

There inheritance It should not be something to be endured. It is a final management decision that requires as much rigor as building your wealth. By 2026, wealth engineering, combined with the simulation power of Balmont AI, will make it possible to design smooth, equitable, and tax-efficient transfer pathways.

Your situation is unique, your transfer strategy must be too.

Do you want to plan your estate or are you in the middle of settling a complex inheritance?

A situation audit is the first step towards regaining control.

[Request an estate planning assessment with Alexis Sagnier]

FAQ (Frequently Asked Questions)

• What is the maximum time allowed to settle an estate? Civilly, 10 years, but fiscally, 6 months to pay the duties without penalties.
• Can a child be disinherited in France? No, the reserved portion of the estate the forbidden. We can only play on the available quota.
• Does assurance-vie form part of the estate? No, it is treated "outside the estate", except in cases of manifestly excessive premiums.
• How can you tell if a deceased person had hidden accounts? The notary checks the files FICOBA (bank accounts) and FICOVIE (assurance-vie).

Sources:

• Ministry of Economy and Finance – Official Bulletin of Public Finances (BOFiP).
• French Civil Code – Articles 720 to 892 on successions.
• ANACOFI Member Booklet 2025 – Section Asset Engineering.
• Notaries of France – Practical guide to settling estates.

Everything you need to know about the Dutreil pact :

• Definition of the Dutreil pact: everything you need to know about this business transfer tool
• Advantages of the Dutreil agreement: Securing the transfer of your family business in 2026
• Disadvantages of the Dutreil pact: The pitfalls and risks of a highly monitored system
• The Dutreil Pact and Taxation: The Expert Guide to the 2026 Reforms
• Objectives of the Dutreil Pact: To secure the continuity and sovereignty of the family business
• Dutreil Pact and family businesses: Securing the transfer and protecting your business assets
• Conditions for applying the Dutreil agreement: Securing the transfer of your business assets in 2026
• Inheritance planning: The expert guide to navigating inheritance, taxation and family protection
• Inheritance planning: The expert guide to anticipating, protecting and optimizing your legacy in 2026
• Transferring a family business via the Dutreil agreement: The strategic guide to ensuring the long-term viability of your family business