Option of the Donee between Ownership and Usufruct: An Insaisissable Personal Right

Imagine for a moment: you own a house in Le Chesnay, received as a gift from your parents ten years ago. Today, a creditor demands repayment of a debt. The judge orders a reduction of the gift to satisfy that creditor. But who will choose what is seized? You, or the liquidator? This crucial question was decided by the Court of Cassation in 1976, and the answer may surprise you.

Many think that when a gift is reduced to the disposable portion (the part of the estate that the deceased may freely transfer), the donee has no say. Wrong. The decision of 18 May 1976 (No. 74-13.982) affirms that the option between ownership and usufruct of the assets comprising the disposable portion is a right exclusively attached to the person of the donee. In other words, this choice cannot be exercised by a third party, not even by the liquidator of the estate.

This solution, which may seem technical, protects a subtle balance between the rights of creditors and the will of the donor. But what are its precise contours? And above all, how to apply it concretely to your situation? That is what we will see.

The facts: a story like many that happen every day

Mr. X, a trader based in Plaisir, had received from his father a gift of several properties. Unfortunately, his business declined. His creditors obtained his judicial liquidation (collective procedure where all assets are realised to pay debts). The liquidator (representative of the creditors) then requested a reduction of the gift to reintegrate the assets into the seizable estate.

The question that arises: who, Mr. X or the liquidator, can choose whether the disposable portion will be taken in full ownership or in usufruct only? The liquidator considers that this choice is a patrimonial right, therefore seizable. Mr. X argues that it is a personal right, reserved to him.

The Court of Appeal rules in favour of the liquidator: it holds that the option is an element of the estate, so only the liquidator can exercise it. Mr. X appeals to the Court of Cassation. The High Court quashes the judgment: the option is exclusively attached to the person of the donee. It has no seizable patrimonial value. The liquidator cannot therefore exercise it in place of Mr. X.

The reasoning of the court — dissected

The Court of Cassation relies on Article 866 of the Civil Code (in its version then in force), which provides that the donee may, in the event of reduction, choose between retaining the assets in kind or in usufruct. But the Court specifies that this choice is a personal right, not a patrimonial one. Why? Because it is linked to the very person of the donee, to his relationship with the donor. It can only be exercised by him, or by his heirs, but not by a third party, even a liquidator.

The liquidator, in his argument, argued that the option had an economic value: choosing usufruct rather than full ownership allows the donee to retain enjoyment of the asset, which has a price. But the Court dismisses this argument: the personal nature of the right takes precedence over any potential patrimonial value. It is a matter of principle: the donee must be able to exercise his choice freely, without pressure from his creditors.

This decision is part of a consistent line of case law: rights intuitu personae (attached to the person) are unseizable. The same logic applies to the right of return in succession, or the right of election in succession. Here, the Court confirms that the donee's option falls into this category.

What this means for you — concretely

For the donee (the one receiving the gift): if you are in a collective procedure, you retain control of the choice between ownership and usufruct. The liquidator cannot decide for you. You can, for example, choose usufruct to keep the enjoyment of your house in Le Chesnay, even if the asset is seized. But be careful: this choice must be exercised in legal form, usually before a notary.

For creditors: they cannot force the donee to opt for full ownership, which would maximise the seizable value. They must wait for the donee to exercise his option, or challenge his choice if it is abusive. In practice, this reduces their recovery possibilities.

Let's take a numerical example: a property in Plaisir is worth €300,000 in full ownership, but only €150,000 in usufruct (depending on the donee's age). If the donee chooses usufruct, the creditors can only seize the bare ownership, i.e. €150,000. They lose €150,000. This is a significant issue.

For the notary: when making a gift, he must inform the donee of this personal right and the consequences in case of reduction. He must also ensure that the option is exercised in good time.

Four tips to avoid this type of dispute

• Inform the donee at the time of the gift: At the time of the deed, the notary must clearly explain that the donee has a personal choice between ownership and usufruct in the event of reduction. This information prevents misunderstandings.
• Exercise the option in writing: In case of collective procedure, the donee must formalise his choice in writing (notarised deed or registered letter) to prevent the liquidator from contesting it. Date and proof are crucial.
• Consult a lawyer as soon as there is a threat of reduction: As soon as a creditor acts, seek advice. A lawyer specialised in property law in Versailles can help you prepare your option and defend your rights.
• Anticipate tax consequences: The choice between ownership and usufruct has different tax implications. For example, usufruct can reduce inheritance tax in the long term. Patrimonial advice is recommended.

Further reading: related case law and developments

This 1976 decision has been confirmed subsequently. In a judgment of 12 March 1985 (No. 83-15.876), the Court of Cassation reiterated that the donee's option is a personal right, unseizable, even in collective proceedings. More recently, in a judgment of 9 July 2014 (No. 13-21.617), it extended this solution to the right of election in succession: the heir can choose between accepting or renouncing the succession, and this choice cannot be exercised by his creditors.

The trend is therefore clear: personal rights related to the transmission of assets are protected against creditors. This strengthens the freedom of the donee and the heir, but complicates the task of creditors. For the future, this case law is likely to be maintained, as it is based on a strong principle: the will of the donor and the protection of the donee's person.

Summary and next steps

FAQ

1. Can I be forced to choose full ownership if my creditors request it?
No, the choice belongs exclusively to you. Creditors cannot impose an option on you, but they can challenge your choice if it is fraudulent.

2. What if the liquidator exercises the option in my place?
You can apply to the judge to have that decision annulled, as it violates your personal right. Consult a lawyer quickly.

3. Is this personal right transmissible to my heirs?
Yes, if you die before exercising the option, your heirs can exercise it in your place, as they succeed to your rights.

4. Is there a time limit to exercise the option?
The law does not set a specific time limit, but it is prudent to exercise it as soon as possible after the request for reduction, to avoid any challenge.

5. Does this right also apply to gifts made by marriage contract?
Yes, the principle is the same: the donee (often the spouse) retains the personal choice, even in the event of reduction for infringement of the heirs' reserved share.

Do you find yourself 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 →