Why opt for a shared donation rather than a simple donation?

The july 05, 2022

A donation during one's lifetime allows the transmission of one's patrimony before the succession. Several types exist, but among them, the shared donation and the simple donation are the most common mechanisms. Wealth A7 explains the differences between these two operations:

 

The simple donation

This allows the donor to organize the transmission of his patrimony:

Donation in advance of the inheritance share: each heir has an incompressible hereditary reserve. In concrete terms, if there are two children, the reserve inheritance is 2/3. A donation in advance of the inheritance share therefore consists of advancing the share that should logically go to the heir at the time of the succession. This means that at the time of death, this donation will be taken into account in the sharing of the goods.

Donation outside the inheritance: in this case, the donation is not made out of the inheritance. If the donation is made to an heir, the latter will voluntarily benefit from it, as he will also be able to receive his share of the estate. It is important that the donation does not exceed the available share.

 

The shared donation

A shared donation allows you to anticipate the succession and to divide the assets between the heirs in an irrevocable way. This mechanism protects the heirs from a possible conflict. If one of the heirs finds himself more advantaged than another, he may be required to pay a balance to compensate for the donation. For example: a father has two children, he makes a shared donation of a property worth 400 000€ to one child. He will then have to pay a balance to his co-heir of 200 000€.

The shared donation can also be transgenerational, for example, grandparents wish to make a donation to their grandchildren. This donation can be on the available share, it will then be free, or on the hereditary reserve in this case, it will be necessary to obtain the agreement of the intermediate generation.

 

What are the differences?

The main difference lies in the value of the property at the time of the succession. It is necessary to know that when a simple donation is made, the value of the property is not fixed, its valuation is made on the day of the succession. Specifically, if a property was bequeathed for a value of 200,000€ and respected the hereditary reserve, it is possible that on the day of the inheritance the property is valued at 300,000€ and exceeds the heir's share. In this case, a balance will have to be paid to compensate the heir.

With a shared donation, the value of the property is fixed on the day of the donation and not on the day of the inheritance. This means that even if the value of the property increases, it will not be taken into account at the time of the inheritance, which is an additional security.

The taxation of a donation can be optimized, our consultants in wealth management can accompany you in the transmission of your heritage, contact us!

In a changing world, Wealth A7 is there to make your wishes come true.

 

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Article by : Darina Attanasio

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