Inheritance: Transgenerational Shared Gifts—A Way to “Skip a Generation”
Stéphane Jacquin of Lazard Frères Gestion sheds light on a mechanism that is still little known: the transgenerational shared gift. It allows grandparents to transfer assets directly to their grandchildren—with their children’s consent—while ultimately reducing the tax burden associated with the transfer.
Increased life expectancy has profoundly altered the timeline of estate planning. By the time an inheritance is finally received, children are often already established, both professionally and financially. This explains families’ growing interest in mechanisms that directly assist the youngest generation—the one that needs it most. Among these mechanisms, the transgenerational shared gift holds a special place, as detailed in the note by Stéphane Jacquin, head of wealth engineering at Lazard Frères Gestion.
How does the “
” arrangement work? The basic principle is that a grandparent transfers assets directly to their grandchildren as part of a shared gift to which their own children consent. Legally, the assets received by the grandchildren are deemed to satisfy their parents’ statutory inheritance share. The parents therefore agree that their children will receive, in whole or in part, on their behalf. The process requires the agreement of all parties and the involvement of a notary, but it offers great flexibility in its organization and finalizes the distribution, thereby limiting the risk of future disputes among heirs.
The main advantage is tax-related. By transferring assets directly across two generations, the family avoids double taxation: the tax that would apply to the transfer from grandparent to grandchild, and then, later, from grandchild to great-grandchild. Gift taxes are calculated based on the family relationship between the donor and the recipient, and each grandparent may make a tax-free gift to each grandchild up to the amount of the statutory exemption, which is reset every fifteen years. By planning ahead and spreading out the gifts over time, families can optimize the use of these exemptions and the progressive tax scale.
Interest Heightened by the Current Context
This arrangement takes on particular significance in the current tax climate. As Lazard Frères Gestion points out, wealth taxes could increase in the future, given the strained state of public finances, where the issue of inheritance taxes regularly resurfaces in public debate. Planning for the transfer of assets in advance therefore means locking in the rules that are in effect today and protecting oneself against a potential increase in transfer taxes on gifts.
The arrangement offers another technical advantage: it allows for the reincorporation of gifts that have already been made. A child who received an asset from his or her parents years ago can thus reallocate it to his or her own children as part of this process, often under favorable tax terms when the initial gift was made more than fifteen years ago. The transgenerational gift-and-sharing arrangement thus becomes a genuine tool for reorganizing the family’s estate, rather than a simple act of transferring new assets.
Who, specifically, is this mechanism intended for? Primarily families with an established estate, whose children are financially independent and support the approach. It requires upfront family discussion, as it alters the balance of asset transfers among family branches. When properly implemented, it allows for a balance between family solidarity and tax efficiency, complementing other tools—such as life insurance, simple gifts, and dismemberment—within an overall strategy. Hence the importance of joint guidance from a notary and a wealth management advisor.
Beyond mere optimization, transgenerational shared gifting is rooted in a spirit of family solidarity: funding a grandchild’s education, a first home purchase, or the transition into the workforce—where the assistance will have the greatest impact. It is part of a broader trend, one in which wealth transfer is increasingly viewed as something to be done “while one is still alive” rather than “after one’s death .” However, this approach is not suitable for all situations: it requires assets that are already transferable, children who agree to waive part of their rights, and a clear understanding of each person’s needs. The note reminds readers that Stéphane Jacquin and the experts at Lazard are available to assist editorial teams in explaining the finer points of this process.
