Will life insurance lose its exceptional regime? After the drop in the passbook rate A to 0.5% announced on February 1, would it be the turn of insurance contracts, the other favorite investment of the French, to be in the sights of the government? This favorite savings product - 17 million French people hold at least one for an outstanding amount of over 1,700 billion euros! - could be integrated into the estate of his subscriber. This is at least what is recommended in a technical report on the hereditary reserve given to the Minister of Justice, Nicole Belloubet, on December 13, 2019.
"Without prejudice to the tax provisions specific to insurance [...], it is therefore proposed [...] to subject life insurance to the ordinary law of inheritance and gifts", recommends its authors, lawyers, law professors and notaries . In other words, it is a matter of attaching life insurance currently “outside the estate” to the estate of the deceased without touching the tax advantage of life insurance (its beneficiaries are exempt from taxes up to € 152,500 ).
This proposition is anything but trivial. Because that amounts to integrating life insurance into the calculation of the hereditary reserve, this famous part of inheritance which obligatorily returns to the heirs of a deceased (his children at the head) during a succession. Contrary to the available portion of which the holder can freely choose his beneficiary.
Fight against certain abuses
However, integrating life insurance into property amounts to increasing it accordingly, which directly benefits the reserved heirs (taking advantage of the hereditary reserve) to the detriment of the beneficiary (ies) designated in the contract. 'life insurance. An example ? Take the case of two children inheriting from their father. He has nothing but a life insurance of 100,000 € contracted for the benefit of only one of his children.
On his death, the child beneficiary of the contract has an inheritance of € 100,000 while the second child inherits nothing. He can of course go to court, but he is in fact excluded from any inheritance. If we apply the recommendation in the technical report, the insurance contract is included in the estate calculation, thus allowing the “deprived” child to obtain their share of the hereditary reserve (one third of the estate), ie 33,333 € while the second child inherits € 66,666, the same share supplemented by the balance of the insurance contract of which he is the sole beneficiary.
Ultrasensitive, the subject divides. "This recommendation is consistent," rejoices the president of the High Council of Notaries (CSN), Me Jean-François Humbert. The French themselves consider life insurance as an element of their heritage, as a financial investment and no longer as a provident contract. It therefore makes sense to integrate it into a heritage estate in the same way as a house ”.
This would allow the passage, according to him, to avoid certain abuses which consist in privileging an heir by designating him beneficiary of a life insurance contract. "We would avoid circumvention of the inheritance regime without touching the advantageous tax system", he argues.
Opposite, the French Savings and Retirement Association (Afer) is already on the move. No question that we limit the freedom to contract savings. Present on the whole territory, it does not intend “to remain without reacting”. "This project, if it were to see the light of day, would be particularly unwelcome when savers need a climate of confidence and not distrust to ensure the success of the Retirement Savings Plan (PER), assures its president Gérard Beckerman. I do not know if this project is not likely to enrich a few notaries, but I know for sure that it will impoverish millions of savers ”. A financial argument that the CSN strongly contests.
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Faced with the controversy, the Ministry of Justice is cautious. "The report is under study and it is too early to say whether it will lead to a bill," he said. However, several MPs are already ready to open Pandora's box. "We have just obtained that a report on this subject is made to see more clearly," emphasizes Jean-Paul Mattei, MoDem deputy from the Pyrénées-Atlantiques, who is rather favorable to the proposal. This deserves public debate, nothing should be forbidden. "