Ownership: Rights and Duties

Imagine: you are a property owner in Haguenau, and ten years ago you received a building plot from your father. It was his way of helping you, as an advance on your inheritance. But upon his death, your brothers and sisters contest: according to them, this plot exceeds what your father could give you without encroaching on their reserved share (the minimum share that the law reserves for certain heirs, called 'forced heirs'). You are now sued, facing the risk of having to return part of the plot or its value. This is exactly the type of dispute that the Court of Cassation resolved in its judgment of 5 December 2018 (No. 17-27.982).

The question that every owner or heir asks is: 'If I received a gift during my lifetime, must I bring it into account in the succession (i.e., fictitiously reintegrate it to calculate the shares)? And if it exceeds what the law allows, what happens?' The answer is one word: reduction. A 'preferential' gift (one made outside the estate, i.e., without obligation to bring it into account) can be reduced if it exceeds the disposable portion (the part of the estate that the deceased could freely give, without affecting the forced share of the heirs).

In this judgment, the Court of Cassation clarifies the modalities of this reduction: the beneficiary (the one who received the gift) must restore to the partitionable mass (the total assets to be shared among the heirs) everything exceeding the disposable portion. In other words, if your gift exceeds what your father could freely give you, you must repay the difference – in kind or in value – so that the other heirs receive their due. A decision that seems logical, but whose calculations are often complex, as we shall see.

The Facts: A Story Like Many Others

Mr. X, a retired man from Haguenau, had three children: Paul, Jacques, and Marie. In 2005, he made a gift to his son Paul of a rental property located in Lingolsheim, valued at €200,000. The gift was 'preferential,' meaning that Mr. X specified that it would be charged against the disposable portion and not against Paul's reserved share. Upon his death in 2015, his estate amounted to €300,000 (various assets). The disposable portion (the part he could freely give) is 1/3 of the assets, i.e., €100,000 (since he had three children: forced share = 2/3, disposable = 1/3). The gift of €200,000 therefore exceeds the disposable portion by €100,000.

The other two children, Jacques and Marie, believe that Paul must bring this gift into account in the succession, or failing that, reduce it. Paul refuses: according to him, the gift was preferential, he does not have to bring it into account. The conflict escalates, and Jacques and Marie sue Paul before the Tribunal de Grande Instance of Strasbourg. At first instance, the court rules in favor of Jacques and Marie: Paul must restore to the partitionable mass the excess of €100,000, either in kind (sell part of the property) or in value (pay €100,000 to the heirs). Paul appeals, but the Colmar Court of Appeal confirms. He then appeals to the Court of Cassation.

Before the Court of Cassation, Paul argues that a preferential gift can only be reduced if it encroaches on the forced share, not on the disposable portion. But the Court rejects his argument: it reminds that reduction applies to any gift (inter vivos or testamentary) that exceeds the disposable portion, including preferential gifts. The judgment is clear: the beneficiary must restore everything that exceeds the disposable portion, and the 'preferential' qualification does not change that. A decision with important practical consequences.

The Reasoning of the Court — Analysed

The Court of Cassation bases its decision on Article 922 of the Civil Code, which governs the calculation of the disposable portion and the reduction of excessive gifts. In simple terms, this article says: to determine whether a gift is too large, you add up all the deceased's assets as of the date of death, add any inter vivos gifts (like Paul's), then calculate the forced share of each heir (the reserved share) and what remains (the disposable portion). If the gift exceeds this disposable portion, it is reduced accordingly.

But what exactly does this change? Paul had received €200,000 while his father could freely give only €100,000. The gift is therefore excessive by €100,000. Paul must restore this amount to the partitionable mass, i.e., put it back into the common pot so that Jacques and Marie receive their share. If he cannot restore in kind (for example, if he has already sold the property), he will have to pay €100,000 in cash.

However, note that the reduction does not invalidate the gift itself within the limit of the disposable portion. Paul retains the €100,000 corresponding to the disposable portion. Only the excess is taken back. The Court specifies that this solution applies even if the gift is preferential, because a preferential gift is not exempt from reduction. In short, the preferential nature only avoids bringing into account (i.e., fictitious reintegration for calculating shares), but does not avoid reduction if the gift exceeds the disposable portion.

What few people know is that the calculation is often complex. You must take into account prior gifts, the value of assets at the date of death, and tax allowances. In my practice, I have encountered cases where heirs had to sell their house to repay, due to lack of anticipation. This decision confirms settled case law, but it has the merit of reminding a fundamental principle: even a well-intentioned gift can be reduced if it exceeds legal limits.

What This Changes for You — Practically

If you are a landlord owner and have received a gift, check whether it exceeds your parent's disposable portion. For example, if your father gave you a flat in Lingolsheim worth €150,000, and he had two children, the disposable portion is 1/3 of his estate. If his total estate (assets + gifts) is €300,000, the disposable portion is €100,000. You therefore have an excess of €50,000 that you will have to restore.

For forced heirs (children, surviving spouse), this decision is a protection: it allows you to claim the reduction of excessive gifts. If you are in this situation, you must act quickly. Indeed, the action for reduction is subject to a five-year limitation period from the opening of the succession (Article 921 of the Civil Code). Do not delay in consulting a lawyer.

For notaries and advisors, this decision reminds of the importance of properly calculating the disposable portion before drafting a gift. A poorly calibrated gift can lead to family conflicts and legal costs. Example: if the gift exceeds by €100,000, lawyer and expert fees can reach €10,000 to €15,000, not counting additional transfer taxes.

Finally, if you are the beneficiary (the one who receives), do not think that the gift is definitively acquired. You must keep evidence of the value of the assets at the date of the gift and at the date of death, because it is the value at death that serves as the basis for calculating the reduction (Article 922, paragraph 2).

Four Tips to Avoid This Type of Dispute

• Have the gifts valued: Before accepting a gift, obtain a precise valuation of the asset from a property expert. Keep this valuation for the date of death.
• Consult a notary to calculate the disposable portion: Before signing a gift, have a provisional partition plan drawn up. The notary can simulate the partitionable mass and tell you if the gift is likely to be excessive.
• Prefer a gift-partition: This type of gift distributes assets among all heirs during the donor's lifetime, avoiding subsequent disputes. It is more complex but more secure.
• Anticipate funding for the reduction: If you receive a large gift, set aside savings or life insurance to be able to repay any excess without having to sell the asset.

Further Analysis: Related Case Law and Developments

This decision is part of a line of Court of Cassation judgments. For example, the judgment of 13 February 2008 (No. 07-10.634) had already ruled that a preferential gift is subject to reduction if it exceeds the disposable portion. The novelty of 2018 is the explicit reminder that the restoration is made to the partitionable mass, not directly to the aggrieved heirs. In other words, the excess goes back into the common pot to be shared among all forced heirs, in proportion to their rights.

Another notable decision is the judgment of 3 November 2016 (No. 15-23.471), which specified that reduction is made in value, unless the beneficiary prefers to restore in kind. This flexibility is confirmed here. The trend of the courts is therefore to protect forced heirs, while leaving some leeway for the beneficiary to choose the method of restoration.

For the future, we can expect judges to be increasingly vigilant about the date of valuation of assets. Indeed, Article 922 refers to the value at the date of death, but if the asset was given a long time ago, its value may have increased significantly. In the Haguenau case, the property had increased by 20% between the gift and the death, which increased the excess. A point to watch.

What You Absolutely Must Remember

Here is a checklist of reflexes to have if you are involved in a preferential gift:

1. Identify the type of gift: is it preferential (outside the estate) or simple (with bringing into account)? The notary must specify this.
2. Calculate the disposable portion: it depends on the number of forced heirs (children, spouse). For one child, the disposable portion is half; for two children, 1/3; for three children, 1/4.
3. Value the assets as of the date of death: this is the key date. If the asset has increased in value, the excess may be larger than expected.
4. Act within five years: the action for reduction is limited to five years from the death. After this period, you can no longer contest the gift.
5. Consult a specialist lawyer: every situation is unique. A professional can help you negotiate a settlement or initiate proceedings.

In summary, this Court of Cassation decision reminds us that gifts, even preferential ones, are never definitively acquired if they exceed legal limits. The protection of forced heirs prevails over the donor's wishes. So, before signing a gift or accepting an inheritance, seek advice.

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 →