Inheritance and life insurance

life insurance
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Interest of the life insurance contract for the spouse

Between spouses, taking out a life insurance policy is of little interest from a tax point of view, since the surviving spouse is in any case completely exempt from the payment of inheritance tax. But it has an advantage for transmitting capital to your spouse. Indeed, the sums going to the beneficiary of the contract not forming part of the estate of the deceased insured (even if the money used to fund the contract belonged to both spouses), there is no question in this case of submitting the capital received in any way shared with other heirs.

In other words, life insurance makes it possible to transform common property into personal property (the spouse will collect the savings in addition to their share of inheritance), a much more economical solution than a change in the marriage regime. However, not everything is allowed: the sums paid into the contract must not be excessive in relation to the subscriber’s financial resources, otherwise the children could oppose the maneuver.

Take out several life insurance policies

Provided you have relatively large sums to invest, taking out several life insurance contracts allows you to diversify your bet on separate contracts and, therefore, to dilute the risk. In addition to bank contracts (Caisse d’Épargne, La Banque Postale, Société Générale, etc.) or insurance companies (Axa, GMF, Maaf, SMAvie, etc.), you can open a contract managed by an association independent (Afer, Agipi, Asac-Fapès, Gaipare, etc.) or 100% controllable on the Internet (Boursorama, Fortuneo, Linxea, Placement-direct.fr, etc.).

Having three or four contracts (the law does not put a limit on the number of life insurances that can be taken out) also makes it easier for the surviving spouse if he wishes to support his children. Explanation: for each contract taken out, the spouse is designated as first-rank beneficiary and the children as second-rank beneficiaries. On the death of the subscriber, the spouse then has full latitude to accept the benefit of one contract but not another. In the event of renunciation, the capital in the account automatically reverts to the second-tier beneficiaries, i.e. the children.

Death of beneficiary

In a married couple under a community regime, on the death of the subscriber of the contract, we know that the beneficiary spouse collects the savings outside the estate settlement (nothing to be shared with the heirs of the deceased, except in the case of abuse of rights) and without any tax to pay.

But what happens when the beneficiary spouse dies before the subscriber? Until the end of 2015, the contract, considered as common property of the couple, was reinstated up to 50% of its value in the estate. The surviving spouse was thus deprived of part of the household money, since half of the contract was paid to the heirs. The law has put an end to this anomaly: since January 1, 2016, in such a situation, the contract is no longer closed or partially reinstated in the estate, but continues in the exclusive name of the surviving spouse, as in the case of “co-membership”.

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