“Duty Free Remittance to Grandchildren” Advice to Michelle and Lawrence

Favorable measures will enable us to reduce inheritance tax with full legality.Michelle and Lawrence must take advantage of them without delay as they may not last forever … Michelle and Lawrence, our advice to retirees

Lawrence and Michelle are plagued by comments about the legacy of the presidential candidate. “Inheritance tax increases are tax cuts,” they protest. Like millions of French, they are obsessed with the concept of parents, the transmission of the fruits of their work to a new generation under acceptable conditions.

Michelle, a longtime member of Le Revenu, has always been involved in managing his business. He is a wholesaler of industrial paints on his account and has successfully taken over and developed the company created by his father before selling it in turn as he approached retirement.

At the individual level, he made a lot of investments in family property. He refurbished everything himself with the help of village masons. Today he is reaping the fruits of his labor. The property is up-to-date and is a 20 hectare park with trees and flowers. A priori, his daughter and his son-in-law will take over and continue developing the annex. This is not a little of his satisfaction.

Lawrence is also very active. She will contact her writing-age grandchildren by email. And she takes responsibility for the maintenance of the house. In the spring, she spends hours gardening. Dedicated to jams in the summer and venison stews in the fall, she freezes and lovingly brings her out between friendly and family meals.

Michelle contacted us to help him optimize his personal financial management. The stock market isn’t too worried about him. He is happy with his performance: over 10% per year since 2010 (all the same!).

In taxation, he is not very comfortable. Illuminated by an old dispute with the tax authorities, he intends to carefully prepare for the transfer of his property. To address his wealth concerns, we investigated his income, expenses, assets and liabilities. As a result, he has a means of his ambition, but he has to make a decision. Quickly.

Recommendation 1: Funding Life Contracts Before Age 70

The couple’s assets are globally balanced. There are all major families of investments (real estate, banking products, stocks, bonds). With one big exception: life insurance. There is no life contract because the fees are likely to be too high. It is correct that they are interested in the fees charged by the savings manager. Some people are certainly a little heavy.

Nevertheless, life insurance is a powerful tool for reducing inheritance tax. It’s a pity not to use it. Amounts paid before the age of 70 are completely exempt from taxation on the death of the insured within the limit of € 152,500 per beneficiary, and in part exceed 20 or 31.25% for up to 45%. Please note that you will only be taxed. Inheritance of the classic line.

Lawrence and Michelle are 68 years old. This is the right age to sell unprofitable rental properties and fund Trophée d’Ordu Revenu life insurance policies by applying the careful allocation recommended by the editorial staff. market. You had better not delay. Payments made after the presidential election may not benefit from the same inheritance benefits.

Michelle is tempted by our tax debate. He also appreciates the ease of managing life insurance compared to direct rental properties. He thinks about the arbitration we propose.

Recommended number 2: Take advantage of donation reductions

Another powerful tool for not legally inheriting tax authorities: donations. There is an urgency here as well. Today, couples under the age of 80 and three adult children can be given nearly € 800,000 (exactly € 791,190) every 15 years, excluding tax. Tomorrow, after the possibility of post-election tax reform, this number could be halved. They are sensitive to our argument, but prefer to skip generations and pass them directly to their grandchildren. Their idea is interesting.

Each grandparent can remit € 31,865 to each grandchild every 15 years, excluding tax. In addition, if the donor is under the age of 80 and Donnie is the legal age, a total of € 31,865 can be sent. It is the grandchild who must declare the transaction to the tax authorities by filling out Form 2735 more than once. Cash comes from the sale of Napoleon and ingots. Lawrence has always been fascinated by yellow metal. Le Revenu does not share his passion.

Gold does not distribute income, its taxes are punished, and performance is rarely there. We recommend selling for 250,000 euros. No more, no less.

Recommendation n ° 3: Adopt a universal community

A good legal organization is also required for a successful transmission. Lawrence and Michelle are married under a community regime reduced to conquest, such as 80% of couples. They have already signed a gift between spouses. This is a cheap notary who provides survivors with a larger percentage of inheritance. This is a good thing. When it comes to spouse protection, they now have to strengthen their gear.

Solutions can only be individual. Switching to a universal community with full attribution is optional. In this case, there is no opening of the successor.

The surviving spouse becomes the complete owner of the property left by the deceased. Disadvantages: The child inherits only on the second death. This is why it is often recommended to make donations for their benefit before adopting the universal community.

The couple makes an appointment with a notary. He appreciates the quality of our recommendations.


Lessons to be learned from this heritage study

Inheritance tax is a direct line and will soon rise to 45% Life insurance and donation deductions can significantly reduce overall taxation.

Marriage is a key factor in a successful infection. It makes sense for many couples to join the “universal community” after the age of 65.