The pros and cons of a French Tontine clause

The principle behind the clause is similar to that of a joint tenancy in the UK. When a tontine clause is included in a French property purchase deed, the surviving owner is considered to have been the sole owner from the day of purchase.

Therefore, property purchased in this way falls outside the scope of inheritance and bypasses French forced heirship laws. 

Following the amendment to Article 913 of the French Civil Code, the advantage of a tontine clause is that it provides more security for a surviving spouse or partner. 

However, if the parents wish to leave the property to their children upon their second death, the children will miss out on the French inheritance tax-free allowance upon the first death.

It is also important to note that the Tontine clause is completely binding; unless both parties agree to remove it, they remain co-owners until one of them dies. This is why a tontine clause can be dangerous in the event of divorce.

Finally, certain conditions must be met for the tontine clause to be valid; its validity may be challenged by a French court in the event of a succession dispute. 

If you require advice on succession planning for French assets, our dedicated Cross-Border team, who specialise in French law, are on hand to help.