Taxation: how to reconcile bequest to a friend and philanthropy?

Question to an expert

I would like to bequeath part of my estate to a relative who is not a relative and to a cause, how do I do this?

Everyone can pass on their assets to whomever they wish, except if they have children. As “reserved” heirs, they cannot be deprived of their “reserved” share. The freedom to bequeath is then limited to the “disposable portion”: half of the heritage with one child, one third with two children, one quarter with three or more children.

With this available quota, you can entirely gratify a distant relative or an unrelated relative – say, the son of a friend to whom you are the godfather.

This godchild will pay 60% of the bequest in respect of inheritance tax, after an allowance of 1,594 euros. If you bequeath him 100,000 euros, he will pay about 59,000 euros in rights, he will have about 41,000 euros left.

However, it is possible to transmit the same amount to him while serving a philanthropic cause thanks to the “bequest with charge”. The principle: you bequeath the available portion to an association or foundation recognized as being of public utility that can benefit from bequests exempt from inheritance tax, with the responsibility of giving a royalty-free sum to your godchild. She will only pay inheritance tax on the remitted share.

For the same bequest of available portion of 100,000 euros to a foundation, with the responsibility of returning 41,000 euros to the godson, the foundation will retain 35,400 euros (100,000 euros – 41,000 euros returned – 23,600 euros in rights).