Quasi-usufruct? Super-usufruct!
Last week we discussed usufruct, its many advantages and its qualities for passing on your estate with complete peace of mind.
There is an even more precise and effective tool that can be combined with it: quasi-usufruct. When I was a student and discovered this notion, I worried about its imperfect nature, with a name that was, to say the least, lacking in glamour: it was an “almost usufruct”. In fact, it is quite the opposite!
We all know that usufruct allows you to use an asset and receive its fruits (the income), but without being able to alter its substance. Well, this is possible with “quasi-usufruct”, which is in fact the famous “super-usufruct”. It allows the donor who holds the usufruct to give up ownership of an asset while keeping control of it. In a gift in particular, it is extremely useful to state that the usufruct over the property will be carried over to the price in the event of a sale, and that this price may be used, as the usufructuary wishes, either to reinvest in property, or in financial assets, or to fund their lifestyle: and it is this last point that is essential.
To illustrate my point, let us go back to last week's worked example: two parents give their main residence, worth 750,000 euros, to their two children. We saw why it is worthwhile for them, from a civil and tax point of view, to reserve the usufruct. What happens now, depending on whether or not the clause carrying the usufruct over to the price is included?
Let us take the case where, in their old age, at around 85 or 90, the parents decide to sell. Without this clause, the two parents would receive 20% of the price before the age of 91, and 10% after! In our beautiful city of Aix, they would have sold their house for 750,000 euros and could rehouse themselves with 150,000 euros or, after 91, 75,000 euros! What a disaster!
With our clause, provided the children give their prior consent, the whole price goes to the parents, and they will be free to buy something smaller, open a financial capitalisation contract, or… travel and live! They will not have to account to their children, in every sense of the word!
However, many precautions must be taken for this type of arrangement: avoid leaving this quasi-usufruct to a second spouse when there are children from a first marriage, have a notarial deed drawn up (the tax authorities pay close attention to it!), and keep the most complete possible record of the sums involved, in particular through the bank. We can explain the reasons for these many precautions in a personal, dedicated consultation. In a word, a tailor-made approach: for that, consult your notaire!
