Succession and Inheritance Laws in Monaco
8 July 2024
Monaco, with its prestigious image and advantageous tax regulations, offers a uniquely attractive setting for estate planning and inheritance. Here, BLS Real Estate explores the key aspects of Monaco’s succession laws that make it an appealing destination for global investors and residents alike.
No Wealth Tax
Monaco is known for its favorable tax regime, particularly notable is the absence of a wealth tax. This makes Monaco an especially attractive location for wealthy individuals seeking to manage their estate with financial efficiency. However, French nationals residing in Monaco must still declare their real estate assets located in France due to specific bilateral agreements.
Inheritance and Donation Taxes
Monaco’s approach to inheritance and donation taxes is favorable compared to many countries. The principality imposes inheritance and gift taxes based on the relationship between the donor or deceased and the recipient:
- Direct descendants and spouses: 0%
- Siblings: 8%
- Uncles, aunts, nephews, and nieces: 10%
- Other relatives: 13%
- Unrelated persons: 16%
These rates apply to all assets located within Monaco, regardless of the nationality, residence, or domicile of the individuals involved.
Franco-Monegasque Convention
The tax treaty between France and Monaco, dated April 1, 1950, primarily addresses the rights of succession between French decedents and their heirs. It stipulates that real estate owned in Monaco by French nationals who pass away will not incur inheritance tax if the property is transferred to their children.
Estate Planning in Monaco
Estate planning in Monaco allows individuals considerable flexibility. The Law No. 1.448, enacted on June 28, 2017, introduced significant provisions related to international private law. This law allows individuals domiciled in Monaco to choose the law of their nationality to govern their succession through a formal election made in their will.
Succession Law
Monaco’s succession law is governed by the Civil Code (articles 602 to 760) and the aforementioned Law No. 1.448. The code provides a structured order of succession that includes legitimate heirs, natural heirs, and the surviving spouse. In the absence of any heirs, the state claims the estate.
Additionally, Monaco permits the application of foreign law through the professio juris, allowing testators to choose the law of their nationality at the time of their choice to govern their entire estate. This choice must be expressly declared in a will or similar document.
Restrictions on Inheritance Choices
Despite the flexibility, certain protections remain entrenched, such as the safeguarding of a compulsory portion for certain heirs, which cannot be overridden by a will. This includes children who are protected under Monaco’s law to ensure they receive a portion of the estate.
Conclusion
Monaco’s legal framework offers an advantageous environment for estate planning, particularly for high-net-worth individuals who value privacy, security, and fiscal efficiency. The principality’s laws support a straightforward approach to succession, coupled with the benefits of an attractive tax regime.
For those considering residency or investment in Monaco, understanding these laws is crucial. BLS Real Estate remains at your service to navigate the complexities of Monaco’s real estate and inheritance laws, ensuring that your assets are managed in accordance with both your wishes and the best legal practices. For further assistance on estate planning and acquiring prime real estate in Monaco, do not hesitate to contact BLS Real Estate for expert guidance and bespoke property solutions.
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