Life insurance in French succession planning: a strategic advantage

Life insurance (assurance-vie) is a valuable tool for estate planning in France. Unlike most assets, life insurance payouts are generally excluded from the estate in France, meaning they bypass the usual inheritance rules. This makes it an effective way to provide financial security for loved ones while maintaining flexibility and confidentiality.

The real power of life insurance lies in its tax benefits. Premiums paid before age 70 enjoy a generous allowance of €152,500 per beneficiary, with favourable tax rates beyond that threshold. After age 70, a smaller allowance of €30,500 applies, but spouses and PACS partners remain fully exempt. These advantages can significantly reduce the tax burden on beneficiaries, provided the contract is structured correctly.

To maximise these benefits, it’s essential to review your beneficiary clauses regularly and align them with your overall estate plan. A well-designed life insurance strategy can protect your family, optimise taxation, and ensure your wishes are respected. In succession planning, timing and clarity are everything.

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