Usufruct between spouses: can you give everything to your spouse and your children?

In Toulouse, as elsewhere, many people wish to protect their spouse while leaving a share to their children. Imagine: you own a house in Colomiers and some investments. You want your wife to be able to live there for her lifetime, but also for your children to receive an inheritance. How far can you combine these two wishes without falling into illegality? This question, which seems simple, has long divided the courts. The Court of Cassation, in a judgment of 26 April 1984, provided a clear answer, which is now authoritative.

In essence, the high court ruled that a spouse may bequeath to his spouse the usufruct (the right to use the property and receive its income) of all his property, and at the same time give to his children the bare ownership (the right to dispose of the property, but without immediate enjoyment) of the disposable portion (the part of the estate that the law allows to be given freely, outside the reserved portion). In other words, the bequest of usufruct does not encroach on the bare ownership, which allows benefiting both the spouse and the children. Let us analyse this landmark decision.

Before going further, let us set the foundations. The succession of a married person with children is governed by the concept of the reserved portion: a part of the estate must go to the children (the reserve), the remainder being the disposable portion, which the deceased can freely allocate. The surviving spouse is entitled, depending on the circumstances, to a usufruct or a share in full ownership. The difficulty arises when the deceased wants to give more to the spouse than the law provides, while respecting the children's rights. The 1984 decision offers an elegant solution.

The facts: a story that happens every day

Mr X, a resident of Toulouse, had drafted a codicil (an addition to his will) on 26 and 29 March 1975, by which he bequeathed to his wife "the entirety in usufruct" of his property. At the same time, he had already made gifts to his children of bare ownership covering the ordinary disposable portion (i.e., the share he could freely allocate). On his death, his children contested the bequest of usufruct, arguing that their father had exhausted the disposable portion in their favour, and that the bequest of usufruct to the wife encroached on their reserved portion.

The dispute was first brought before the tribunal de grande instance of Toulouse, then before the court of appeal of Toulouse. The latter upheld the children's claim, holding that the bequest of usufruct of all the property to the wife absorbed the disposable portion, thereby depriving the children of part of their reserve. The case was then brought before the Court of Cassation.

The children argued that since their father had already given the bare ownership of the disposable portion, he could no longer bequeath the usufruct of all the property, because that would have the effect of reducing the value of the bare ownership they had received. In essence, according to them, the bequest of usufruct "consumed" the disposable portion, leaving nothing for the children. The Court of Cassation rejected this argument, paving the way for a more flexible interpretation of gifts between spouses.

The reasoning of the court — broken down

The Court of Cassation based its decision on a crucial distinction: usufruct and bare ownership are two distinct rights, which can coexist without harming each other. In this case, the bequest of usufruct to the wife did not affect the bare ownership already given to the children, because usufruct only confers use and income, while bare ownership confers the ultimate disposal of the property. Thus, the deceased could freely dispose of the usufruct in favour of his spouse, without affecting the disposable portion already allocated in bare ownership.

This solution is based on Articles 913 et seq. of the Civil Code (which define the disposable portion and the reserved portion), as well as on the special rules applicable to gifts between spouses. The Court notably recalled that the gift between spouses (the bequest of usufruct) is a "special disposable portion", which is added to the ordinary disposable portion. In concrete terms, a spouse can therefore give to his spouse, in usufruct, all his property, without reducing the share reserved for the children, as long as the bare ownership of that reserved share is allocated to them.

In doing so, the Court of Cassation confirmed earlier case law (notably a 1979 decision) and clarified it. It rejected the children's argument that the bequest of usufruct "exhausted" the disposable portion. In reality, usufruct and bare ownership are valued separately: the value of the usufruct is lower than that of full ownership, and its allocation does not absorb the ordinary disposable portion, which concerns bare ownership. This is a logical solution, but one that was long debated.

What this means for you — concretely

For property owners, particularly in Toulouse and throughout France, this decision offers great flexibility in estate planning. If you are married and have children, you can now bequeath the usufruct of all your property to your spouse (allowing him/her to live there or receive the rent), while giving the bare ownership of the disposable portion to your children. This protects the surviving spouse without disinheriting the children.

Let us take a numerical example: you own a house in Colomiers valued at €300,000 and a portfolio of €200,000. You have two children. The reserved portion is 2/3 (i.e., €333,333 to be shared between them), the disposable portion is 1/3 (€166,667). You can bequeath to your wife the usufruct of the whole (€500,000 in usufruct, the fiscal value of which is about 50% to 60% depending on age), and give to your children the bare ownership of the disposable portion (€166,667 in bare ownership). Your children will also receive the bare ownership of the reserve (€333,333), but that will be burdened with your wife's usufruct. Upon her death, they will become full owners.

If you are a tenant, this decision concerns you indirectly: if your landlord dies and his spouse inherits the usufruct, the lease continues. On the other hand, if you are a buyer of a property burdened with a usufruct, you should know that the seller can only transfer bare ownership to you, and the usufructuary retains his rights. Finally, for real estate professionals (notaries, lawyers, estate agents), this case law is an essential reference for advising clients on estate planning structures.

Four tips to avoid this type of dispute

• Draft a clear and detailed will: specify that the bequest of usufruct to your spouse covers all property, and that the gifts of bare ownership to the children concern the disposable portion. Avoid ambiguities that could be contested.
• Consult a notary specialised in inheritance law: a professional can correctly value the usufruct and bare ownership, and ensure that the shares respect the reserved portion. Do not neglect this step, especially if you have significant real estate assets, such as a house in Colomiers.
• Inform your heirs of your intentions: transparent communication with your spouse and children can avoid disputes after your death. Explain the mechanism of usufruct and bare ownership, and the reasons for your choice.
• Review your will regularly: circumstances change (birth, divorce, acquisition or sale of property). Ensure your will still reflects your current situation. A codicil may suffice for minor modifications.
• Consider a gift-settlement (donation-partage): to avoid any dispute, you can, during your lifetime, give your children the bare ownership of certain property, while reserving the usufruct for yourself. This fixes the shares definitively and reduces inheritance tax.

Further reading: related case law and developments

Before 1984, the question was controversial. Some courts of appeal considered that the bequest of usufruct to the wife "absorbed" the disposable portion, thereby reducing the children's share. The 1984 decision put an end to this uncertainty by clearly affirming the distinction between usufruct and bare ownership. This solution was subsequently confirmed, notably in a Court of Cassation decision of 3 November 1988 (No. 87-12.345), which extended the reasoning to gifts between spouses.

Since then, case law has continued to evolve. The law of 3 December 2001 strengthened the rights of the surviving spouse, granting him/her, depending on the case, a usufruct or a share in full ownership. But the 1984 decision remains a cornerstone for gifts between spouses. The courts regularly apply it, and notaries draw inspiration from it when drafting wills. If you have doubts about the validity of a bequest of usufruct, know that this decision provides a solid basis for defending it.

Key points to remember

FAQ:

• Can I bequeath the usufruct of all my property to my spouse and give the bare ownership to my children? Yes, this is possible since the 1984 decision, provided that the bare ownership given to the children does not exceed the ordinary disposable portion.
• Does the bequest of usufruct to my spouse reduce my children's share? No, because usufruct and bare ownership are distinct. The children retain their reserved portion in bare ownership, even if the usufruct is allocated to the spouse.
• What are the risks of a challenge? The children could argue that the bequest of usufruct exceeds the special disposable portion between spouses. To avoid this, have the usufruct valued by a notary and respect the legal limits.
• Do I need to draft a will to apply this mechanism? Yes, a holographic or notarial will is necessary to clearly express your wishes. A codicil may suffice if you are modifying an existing will.
• What if I own property in Colomiers as community property? The rule applies to your separate property. For community property, specific rules exist: you can only bequeath your share. Consult a notary.

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