Israeli and French inheritance law

In recent years, many Jews in France have decided to strengthen their engagement with Israel. Some of them emigrated to Israel and received Israeli citizenship. Others spend their time equally in both France and Israel. Still other purchase property in Israel while still residing primarily in France.

This creates confusion and uncertainty about inheritance laws, inheritance taxes and other relevant rights. The answers to these complex questions are not always clear and depend on the circumstances of each case.

So what is the law applicable in a case where the testator came to Israel but still has property in France? What about a testator living abroad who has acquired property in Israel?

In the context of this article, we will review the different aspects of this problem. The first and foremost question is: which law adjudicates each matter – the  laws of France or Israel?

Determination of the place of residence

What is the legal place of residence of an individual who spends time in two different countries?

In order to clarify the question of where the “life center” of a dual citizen lies, the courts apply the data submitted to them, using such criteria as place of residence, time of residence, property owned in each country, the type of residence, place of employment, where the person’s children study, and how often they leave Israel.

Movable and immovable property – furniture and buildings.

Israel’s inheritance law applies equally to all of the testator’s property, with no distinction made between movable and immovable property. On the other hand, France, as well as other European countries, uses the legal doctrine of Lex loci rei sitae. This doctrine, commonly known as Lex Situs, states the applicable law is that of the country where the property is located. For example, if a French resident has property in Israel while residing abroad, French law would apply under the principle of “last place of residence”. If said French resident dies in Israel, the doctrine of Lex Situs states that the applicable law is that of the country where the goods are located. Thus, since the property is located Israel, Israeli law applies.

Israeli law gives the testator freedom to bequeath their property – French law has certain restrictions

According to Israeli law, there is no restriction on the right of inheritance and a testator may, in his will, bequeath his property to whomever he wishes, without limitation. On the other hand, French law stipulates that the testator cannot completely disinherit his children. In every possible instance, they will have the right to inherit at least a portion of the estate. If one of the testator’s children dies before him, his children (that is to say the grandchildren of the deceased) will inherit said part of the estate. In the event that the deceased has no children, his spouse will be entitled to 25% of his estate. After distribution to the protected heirs, the testator may bequeath the balance of the estate to whomever he wishes.

Regulation 650/2012 of the European Union

In August 2015, a new law came in force for the majority of the countries of the European Union (including France). According to this law, the testator can decide that his will and testament will be governed by the law of any country of which he is a citizen, even if he does not reside in that country, and even if he has no property in that country.

Such a regulation allows a French testator, holder of Israeli citizenship, to have his will adjudicated by Israeli Law, even in regards to real estate located in Europe (apart from property situated in Denmark / UK / Ireland, which have not adhered to this regulation). However, it was stipulated in the said regulations that the application of Israeli (or any other country) law should be clearly and specifically stated in the will.

Taxes on succession

There is no inheritance tax in Israeli law and tax code. Therefore, the estate of the testator whose principal place of residence was in Israel will be exempt from tax. Inheritance taxes are established in French law and regulations, and the estate of a testator whose principal place of residence is in France may be taxable. It will be necessary to examine the specific cases – such as the taxation of property in Israel of a testator whose principal place of residence is in France, or the taxation of property in France of a testator whose principal place of residence is in Israel – according to the particular circumstances of each case.

In summary

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