Life insurance allows you to pass on part of your assets to third parties without having to submit to the rules of successionWhat are the advantages of this type of contract, and how does it work? legacy after the subscriber's death?
Why transfer your assets through life insurance?
When a person dies, their estate is distributed to their heirs according to an order established by law. It is also possible to favor certain individuals by making gifts during one's lifetime or by writing a will. Another option for transferring one's estate: take out a life insurance policyThis contract involves fulfilling a beneficiary clause, designating the person or persons chosen to receive the capital or annuity guaranteed upon the death of the insured.
A completely free designation of beneficiaries
Life insurance offers numerous advantages for the purpose of transferring one's assets. First, the choice of beneficiaries is free. It can be any Physical personbut also can give you Corporation like a charitable organization. It is also possible to choose the percentage of the capital that will go to each designated beneficiary.
Capital that does not form part of the inheritance
Except in rare cases, life insurance is not part of theestate assetIn other words, after the death of the policyholder, the capital transferred to the beneficiaries designated in the contract is not subject to inheritance tax. The capital benefits from advantageous taxation which differs depending on the date the premiums were paid into the contract.
Flexibility of use
Life insurance contracts are very flexible regarding the method and frequency of payments. It is possible to make... regular transfers (every month, quarter, year…) or to carry out voluntary contributions depending on one's savings. This makes it easier to build up capital.
What taxes apply to the inheritance?
Only the bonuses paid after age 70 Inheritance tax on sums exceeding €30,500 is levied on contracts taken out after November 20, 1991. The applicable rate for each heir varies according to their relationship to the deceased. However, interest earned on sums paid after age 70 is exempt from inheritance tax.
Favorable taxation on premiums paid before age 70
If the bonuses have been paid before the subscriber turns 70They are exempt from inheritance tax if they do not exceed €152,500. If they exceed this threshold, a tax rate of 20% will apply to estates opened since January 1, 2014. For sums exceeding €700,000, the rate increases to 31,25%.
In what cases is there a tax exemption?
Whether he is married or in a civil partnership, the surviving spouse is exempt from inheritance tax. It is also exempt from the 20% levy on the transfer of life insurance.
The 20% levy is also not due when the subscriber had their tax residence outside of France at the date of signing the contract.
The formalities to be completed after the death of the insured
If one of your relatives has passed away, and you know they had a life insurance policy naming you as the beneficiary, you must go to the bank or the insurance company covered by the contract. Several documents will be requested by the advisor before you receive the capital.
Documents to be sent to the insurer
Regardless of the deceased's situation, you will need to provide:
- a death certificate,
- a bank account statement (RIB),
- a document proving your identity as a beneficiary (identity card, family record book, certificate of heirship…).
The insurer will provide you with supporting documents that you will need to give to the tax Center, so that the tax can be calculated. You will then receive a tax clearance Return it to the bank or insurance company. They will deduct the tax due on the capital and transfer the remaining amount to you. Some insurers and banks have departments that write directly to the tax authorities to obtain the tax clearance certificate, saving you the trouble of going there in person.
How can I find out if I am the beneficiary of a life insurance policy?
Are you unsure if you are the beneficiary of a life insurance policy held by a deceased loved one? The first step is to carefully examine the... account statements to find out about the deceased's bank and then contact them. If this is not possible, it is possible to...write to AGIRAAn organization will contact all insurers to find out if the deceased had a life insurance policy and if they had named you as a beneficiary. This can be done by mail or online.
Capital settlement
The time it takes to receive the capital after death depends primarily on the difficulty in finding the beneficiary or beneficiaries. Once they have been identified and have provided the documents requested by the insurer, the law allows a period ofone month maximum to pay them the funds.
Life insurance is therefore a flexible solution for transferring part of one's assets to individuals or legal entities of one's choice. The designated beneficiaries will benefit from favorable tax framework and even an exemption from all inheritance tax and taxation if it concerns the spouse of the insured or the partner linked by a PACS.
