The life insurance contract — an instrument to transmit the inheritance avoiding the reserved portion?

Abstract

The relationship between life insurance and succession law is a topical matter because this instrument is more frequently chosen to execute the transmission of the inheritance. When the deceased person designated a beneficiary of the insurance, the capital and the rent payable upon his/her death are not part of the assets of the insured person. The rules governing the obligation to restore or account for gifts, advancements or legacies (the claw-back clauses) in cases of infringement of the reserved portion of the heirs of the insured come into effect only when the amount paid as insurance premiums are manifestly exaggerated considering his/her means.

The solutions chosen in order to guarantee the balance between the freedom of contracts which may also manifest itself through the conclusion of an insurance contract and the necessary protection given to the close relatives of the deceased are various in European countries.  The case law proves the commitment to sanction the use of the insurance in order to deprive the forced heirs of their right.

In an international succession, difficulties arise from the simultaneous application of two different laws. On the one hand, there is the law applicable to the insurance contract that is determined by the use of the Regulation (CE) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations. On the other hand, the law determined according to art. 21 or 22 of the Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 govern the totality of the succession, especially the obligation to restore or account for gifts, advancements or legacies when determining the shares of the different beneficiaries.