Right of Return of Collaterals: Deferred Salary Excluded from the Base

Imagine the scene: in La Ciotat, a farmer spent thirty years working on the family farm without receiving a salary. Upon the death of his parents, he receives land in compensation for this unpaid work. But then his brothers and sisters claim a part of this land, invoking the “legal right of return” (a mechanism that allows privileged collaterals, such as brothers and sisters, to recover certain assets given by the deceased). The question that every owner in this situation asks: should these lands received in payment of a deferred salary claim (a claim that the law recognises to a child who worked without pay for their parents) be included in the base of this right of return? In other words, can a brother or sister claim a part of the assets you received in compensation for your work? This decision of the Court of Cassation answers clearly: no.

What few people know is that the legal right of return is often invoked in successions to try to recover assets that have been given to an heir. But the Court of Cassation, in this judgment of 1 December 2021 (No. 20-12.315), puts a stop to this claim when the assets have been allocated in settlement of a deferred salary claim. In short, if you have worked on your parents' farm without being paid, the lands you receive in compensation cannot be recovered by your brothers and sisters under the right of return. Good news for farmers, but it deserves to be understood in its finest details.

So, how did the judges reach this conclusion? And above all, what does it change for you, owner, tenant or real estate professional in the Bouches-du-Rhône, in Septèmes-les-Vallons or elsewhere? Let's dive into this decision.

The facts: a story that happens every day

Mr X, owner of a farm in La Ciotat, had worked with his parents for decades without receiving a salary. Upon his mother's death, a deed of partition (a document that distributes assets among the heirs) allocated several plots of land to him. These plots represented a value of 500,000 francs (about €76,000). Of these 500,000 francs, 300,000 francs corresponded to his deferred salary claim (the unpaid work he had provided) and 200,000 francs to his rights in his mother's succession (his ordinary inheritance share).

Problem: after Mr X's death, his own heirs (his children) wanted to sell the land. But Mr X's brothers and sisters (therefore the uncles and aunts) asserted their “legal right of return” over these assets. This right, provided for in Article 757-3 of the Civil Code, allows the deceased's brothers and sisters to recover assets that the deceased had received from their parents by gift or succession, provided that those assets are still in kind (not sold) at the time of death. The privileged collaterals (brothers and sisters) argued that all the plots allocated to Mr X should be included in the base of this right of return, including the part corresponding to the deferred salary.

The Court of Appeal (the court that heard the case before the Court of Cassation) agreed with them. It considered that all the plots allocated to Mr X by the deed of partition, whether they came from his deferred salary claim or from his inheritance rights, should be subject to the right of return. Mr X's heirs then appealed to the Court of Cassation to challenge this decision.

What few people know is that deferred salary is a specific institution in the agricultural world. It allows a child who has worked on their parents' farm without being paid to be paid after their death, in the form of assets or money. The question was therefore whether this payment should be treated as an ordinary inheritance or as an independent claim.

The reasoning of the court — dissected

The Court of Cassation quashed (annulled) the Court of Appeal's judgment. Why? Because, according to it, assets received in payment of a deferred salary claim are not assets “received from the ascendant” within the meaning of Article 757-3 of the Civil Code. This article provides that “the legal right of return is exercised over assets that the deceased had received from his ascendants by gift or succession.” However, the deferred salary claim is neither a gift nor a succession: it is a claim that the law recognises to a child who has worked without pay, and which is paid by the succession.

But how do the judges reach this conclusion? They rely on Article L. 321-17 of the Rural and Maritime Fishing Code, which specifies that deferred salary is a claim that must be paid out of the estate (all the deceased's assets) before the partition. In other words, deferred salary is a debt of the succession, not an inheritance. When the child receives assets in payment of this claim, they do not receive them “from their parents” gratuitously, but in execution of a legal obligation to pay.

However, note: the Court of Cassation does not merely cite the texts. It operates a subtle reasoning. It notes that the deed of partition allocated the plots to Mr X for three-fifths under the deferred salary and for two-fifths under his inheritance rights. The Court of Appeal had treated the whole as a single unit, but the Court of Cassation considers that it was necessary to distinguish. The part corresponding to the deferred salary does not enter into the base of the right of return, because it is not a liberality (gift or legacy) from the ascendant. It is a deferred remuneration.

In short, the judges considered that the Court of Appeal had violated the texts by including all the assets in the base of the right of return. The reasoning is as follows: the legal right of return can only be exercised over assets that the deceased had received gratuitously from his ascendants. However, assets received in payment of a deferred salary claim are received for valuable consideration (in exchange for work). They therefore escape the right of return.

undefined, I have encountered cases where brothers and sisters tried to recover agricultural land by invoking this right of return, without success since this judgment. This decision confirms a protective trend for farmers who sacrificed their salary for the family farm.

What this changes for you — concretely

This decision has immediate practical implications, especially if you are an owner of agricultural property or if you have worked on your parents' farm without pay.

For the farming child: If you are in this situation, you should know that the lands you receive in compensation for your work cannot be claimed by your brothers and sisters after your death, under the right of return. This protects your descendants. For example, if you received a plot worth €100,000 in La Ciotat, of which €60,000 is under the deferred salary, your children can keep it without fear that your brothers and sisters will claim it for the €60,000.

For non-farming brothers and sisters: Attention, your rights of return only apply to assets received gratuitously by your deceased brother or sister. If part of the assets comes from a deferred salary claim, you cannot recover them. Concrete example in Septèmes-les-Vallons: a brother received a house and land in partition. If the house was allocated in payment of his deferred salary, you cannot exercise your right of return over that house.

For notaries and advisors: When settling a succession, you must clearly distinguish in the deed of partition the part allocated under the deferred salary and the part allocated under inheritance rights. This distinction is crucial to avoid subsequent disputes. If the deed does not make this distinction, the risk is that privileged collaterals will contest the base of the right of return.

But what exactly does this change for a non-agricultural owner? Little directly, but the principle may apply to other succession claims. For example, if an heir has a claim against the succession for work carried out, the assets received in payment could escape the right of return. This is a possible extensive interpretation.

Four tips to avoid this type of dispute

• 1. Have your work on the farm recorded: As soon as you start working on your parents' farm without pay, have a document drawn up recognising your right to deferred salary. This can be a notarial deed or a simple letter signed by your parents. This document will serve as proof in case of a dispute.
• 2. Insist on a detailed deed of partition: During the succession partition, ask the notary to expressly distinguish the part allocated under the deferred salary and the part allocated under your inheritance rights. This distinction is essential to prevent your brothers and sisters from claiming the right of return over the whole.
• 3. Anticipate the right of return in your own succession: If you have received assets from your parents, know that your brothers and sisters could exercise a right of return over those assets at your death. To protect your children, you can sell the assets during your lifetime (the right of return only applies to assets in kind) or give them to your children with a return clause.
• 4. Consult a specialised lawyer: The rules of the right of return and deferred salary are complex. A lawyer specialising in property and succession law can help you structure your situation to avoid disputes. A 30-minute consultation can save you years of proceedings.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

Further reading: related case law and developments

This decision is part of a line of case law protective of deferred salary creditors. Already, in a judgment of 20 November 2013 (No. 12-26.976), the Court of Cassation had held that deferred salary was a succession claim and not a gift. However, the question of its exclusion from the right of return had not been decided so clearly.

Conversely, some Courts of Appeal had previously included assets received in payment of deferred salary in the base of the right of return, considering that the deed of partition globally allocated assets without distinguishing the origin. The Court of Cassation puts an end to this divergence by imposing a systematic distinction.

What this means for the future: notaries will have to be particularly vigilant in drafting deeds of partition. Courts will be stricter on the qualification of assets. And brothers and sisters who hoped to recover agricultural land through this means will have to revise their claims.

Another possible development: the extension of this principle to other succession claims, such as claims for care or work. But for now, the case law is limited to deferred salary.

Summary and next steps

FAQ:

1. What is the legal right of return?
It is the right for the deceased's brothers and sisters to recover assets that the deceased had received from their parents by gift or succession, provided that those assets are still in kind at their death.

2. What should I do if I am in Mr X's situation?
If you have received assets in payment of a deferred salary, make sure that the deed of partition clearly distinguishes that part. If it is already done, you are protected. If not, consult a lawyer to regularise.

3. Can I sell the assets received to avoid the right of return?
Yes, the right of return only applies to assets in kind. If you sell the assets during your lifetime, your brothers and sisters cannot claim them. However, beware of tax consequences.

4. What are the time limits to act?
The right of return must be exercised within five years of the death. After this period, it is time-barred. If you are an heir, you must therefore act quickly.

5. Does this decision apply to assets received before 2021?
Yes, the Court of Cassation interprets the law in force. It applies to all situations not finally decided. If you have an ongoing dispute, you can invoke this judgment.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →