Donation-partage with usufruct: who must prove the reinvestment?

Imagine: you have just inherited from your parents, and together with your siblings, you discover that the donation-partage they made during their lifetime does not reflect reality. One of them may have received a sum of money, but the funds were never invested as planned to secure the donors' usufruct. What should you do? This question might well be asked one day by a resident of Houilles or Plaisir. The French Court of Cassation, in a decision of 6 November 1979, provides a clear answer: it is for the person contesting the donation to prove that the funds were indeed remitted. Explanations follow.

The facts: a story like many others

Mr and Mrs A..., a couple of property owners in Houilles, wished to organise their succession during their lifetime. By a deed of donation-partage (a donation made to their children distributing assets in advance), they gave their two children, Camille and Georges, part of their assets. However, they reserved the usufruct (the right to use the assets and receive income from them) until the death of the surviving spouse. In addition to real estate, they gave a sum of 10,000 old francs (about 100 euros today, but at the time a substantial amount). To secure the usufruct over this sum, the deed provided that the 10,000 francs would be invested in French government bonds, registered in the donors' names for the usufruct.

Upon the death of the surviving donor, the children discovered that the funds had never been invested as agreed. Camille, who did not receive her share, sought a reduction of the donation-partage (i.e., a reduction of her brother Georges's share to restore equality). Georges, for his part, argued that the funds had indeed been handed over to Camille in person. The court had to decide: who must prove that the sum was given? The Court of Appeal ruled in favour of Camille: it was for Georges, who alleged that the transfer had taken place, to prove it. Georges appealed to the Court of Cassation.

The court's reasoning — broken down

The Court of Cassation dismissed Georges's appeal. It upheld the reasoning of the Court of Appeal: the donation-partage deed provided that the donors retained the usufruct over the sum of money until their death. Consequently, as long as the donors were alive, they had control over the funds. However, if the sum had been remitted to Camille, that would have meant that the donors had renounced their usufruct, which was not provided for. Therefore, it was for Georges, who argued that the transfer had taken place, to provide proof thereof.

The legal basis here is Article 1078 of the French Civil Code (old version, now Article 1078-1 since the 2006 reform of inheritance law). This article provides that, for the valuation of assets given in a donation-partage, the relevant date is the date of the donor's death. But the Court goes further: it recalls that the burden of proof lies on the person who asserts a fact. In this case, Georges claimed that the transfer had occurred; thus it was for him to prove this fact. The decision confirms a jurisprudential trend protecting heirs who have not received their due. The judges consider that the mere fact that the deed mentions a reservation of usufruct is sufficient to place the burden of proof on the person contesting that reservation.

What this means for you — practically

If you are a property owner in Plaisir and have received a donation-partage, or if you are the heir contesting such a donation, this decision directly concerns you. For the donor: if you make a donation-partage with a reservation of usufruct over a sum of money, ensure that the reinvestment (the placement) is actually carried out. Otherwise, your heirs could find themselves in a complex situation. For the heir who did not receive their share: you can seek a reduction of the donation. But beware: the burden of proof may fall on you if you assert that the funds were not remitted. In our ruling, it was the defendant heir (the one who received the assets) who had to prove the transfer. For the heir who received more than their share: if you claim that the funds were remitted to another, you must prove it. Keep written records, witness statements, or any document establishing the transfer.

Example: if the donation involved a sum of €50,000, and the usufruct was not respected, the prejudiced heir can seek a reduction of up to €50,000, or even more if the value of the assets has increased. The time limit to act is 5 years from the death (Article 921 of the French Civil Code).

Four tips to avoid this type of dispute

• Draft a precise donation-partage deed: clearly mention the reservation of usufruct and the terms of reinvestment. Consult a notary to avoid ambiguities.
• Keep proof of the investment: if the donation provides for an investment in securities, keep bank statements or deposit certificates. In case of a dispute, these documents will be decisive.
• Inform your heirs: explain to them how the donation-partage works. A family meeting can prevent later misunderstandings.
• Anticipate the burden of proof: if you are the heir who received the assets, gather all evidence of the transfer of funds as soon as the death occurs. Better safe than sorry.

Further reading: related case law and developments

The Court of Cassation confirmed this position in a subsequent decision of 13 January 1987 (no. 85-16.342): in matters of donation-partage, the burden of proving reinvestment lies with the person relying on the gift (the one who received the assets). The trend is therefore protective of the heir who did not receive their share. Since the 2006 reform of inheritance law, Article 1078-1 of the French Civil Code specifies that donated assets are valued as of the date of death, but the issue of proof remains unchanged. This case law is therefore still relevant today.

Key takeaways

FAQ:
1. Can I contest a donation-partage if the usufruct was not respected? Yes, by seeking a reduction. You must act within 5 years of the death.
2. Who must prove that the funds were remitted? The heir who claims that the transfer took place must prove it.
3. What should I do if I am the heir who received the assets? Keep all documents proving the reinvestment or transfer of funds.
4. Is a notarial deed sufficient? It is conclusive until proven otherwise, but it is better to attach supporting documents.
5. Can I renounce the usufruct? Yes, but this must be done by a notarial deed.

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