The Shared Gift: A Solution for Planning the Transfer of Your Estate
A shared gift is the preferred option for avoiding conflicts during probate, particularly with regard to real estate, as it allows you to retain the right to use the gifted property until your death.
As the name suggests, a “donation-partage” is both a gift and a division of assets. It allows you to plan the transfer of your estate during your lifetime by allocating all or part of your assets to your potential heirs. It requires the execution of a notarized deed.
The Benefits of a Joint Gift
A shared gift allows you to plan your estate and lock in the value of the gifted assets as of the date of the gift. This helps avoid conflicts associated with “simple” gifts, where the value of the gifted assets has changed over time. A shared gift is a good way for parents to reward their children while preventing future difficulties in dividing the estate and reducing the risk of disputes among their descendants.
Assets Subject to a Partial Gift
All kinds of assets can be included in a shared gift: real estate, stocks, cash, personal property, jewelry, etc. It is possible to limit the gift to the bare ownership of a real estate property and retain the usufruct to continue using it. A shared gift can also allow you to revisit past transactions by reintegrating assets that were previously transferred through a simple gift or a manual gift.
Donors and Recipients of a Shared Gift
You can make a gift on your own or jointly with your spouse (in which case it is called a joint gift). The gift is made to your potential heirs (children, brothers and sisters in the absence of descendants, etc.) provided there are at least two of them. You may also make a shared gift to your grandchildren (this is known as a “transgenerational” shared gift). To do so, you must obtain the consent of both your children and the beneficiaries.
The Cost of a Joint Gift
A shared gift must be established by a notarized deed, the cost of which is regulated by law. The deed gives rise to a fee proportional to the full ownership value of the property being gifted or shared. The applicable fee schedule is as follows:
- From 0 to 6,500 €: 4.84%
- From €6,500 to €17,000: 2.00%
- From €17,000 to €60,000: 1.33%
- Over 60,000 €: 1.00%
Additional fees must be taken into account when dealing with real estate (land registry fees, property tax). These fees are distinct from any gift tax that may be payable to the tax authorities.
Tax Treatment of Gift-and-Share Transactions
The tax treatment of a shared gift is the same as that of “simple” gifts. The standard tax exemptions apply and can be renewed every 15 years. Intergenerational shared gifts qualify for a double tax exemption: one of €100,000, applicable between a parent and a child, and another of €31,865, applicable between a grandparent and a grandchild.
