Legal Criteria for Complex Estate Settlements

French banks can once again charge succession fees to modest households and those with complex estates, according to a new government decree. The regulation defines “complexity” in estate settlements based on the presence of direct-line heirs or the existence of outstanding mortgage loans, removing previous restrictions that limited these charges for certain demographics.

The decree specifies that an estate is characterized by complexity when the deceased has heirs in a direct line or holds a real estate credit, among other criteria. This legal shift allows financial institutions to apply specific banking fees for the administrative processing of inheritances that meet these benchmarks.

Under the current framework, banks utilize these complexity markers to justify the application of fees that were previously restricted or capped for lower-income households. The inclusion of mortgage debt as a complexity factor means that estates involving property loans are now more likely to trigger these charges.

The move follows a period of regulatory scrutiny regarding how banks charge for the closure of accounts and the transfer of assets upon death. By codifying the definition of a complex estate, the decree provides a legal basis for banks to bill for the additional labor required to manage heirs in direct lines and the settlement of real estate debts.

Financial institutions typically charge for several types of services during succession, including the search for beneficiaries, the blocking of accounts, and the transfer of funds. The new decree ensures these fees are applicable even to modest households if the estate meets the “complexity” threshold.

The application of these fees affects the net amount received by heirs, particularly in cases where the estate’s primary value is tied up in real estate with remaining debt. The decree establishes that the presence of a mortgage is a sufficient condition to categorize the file as complex.

The French Constitutional Council has previously been involved in reviewing the legality of various banking fees and consumer protections. This decree aligns the operational ability of banks to charge for succession services with the specific administrative burdens associated with direct-line inheritance and property loans.