Life insurance : 6 examples of clauses to designate the beneficiary of your contract

life insurance is a flexible tool in terms of transmission. Provided you have designated with care to the beneficiaries of the contract. Round-up of good practices.

Who do you want to gratify your death ? Anyone who has subscribed to a life insurance should be clear on this important issue. At your death, the capital of your (your) contract(s) will be forwarded with a favorable tax, persons that you have indicated in the beneficiary clause. Reminder : each designated person has the right to a deduction of 152 500 euros on the capital transmitted, the latter being taxed at 20 % on the excess up to eur 700,000, to 31.25 % beyond that. This designation shall be made on the subscription, but may be modified subsequently.

Attention, if the beneficiary clause is a virgin at the time of death, the capital will fall into the estate of the deceased with the taxation thereof.

To simplify you the life, insurers offer you always a clause type. "Was my death, the capital will be paid to my spouse, failing my children, born or unborn, living or represented, in equal shares between them, in default to my heirs." But you can designate a beneficiary who seems good to you : your spouse, your children, your sister, your friend, your lover, an association, etc., You can split amounts between multiple beneficiaries, set the conditions... the drafting of The clause requires great vigilance. It should not give a matter of interpretation, and should be reviewed regularly.

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1 While for my partner

This is the will of the most common, transmit the full amount of principal to the surviving spouse. In this case, on the tax plan, the life insurance does not present any particular advantage, the surviving spouse is exempt from inheritance tax in all circumstances. And on the civilian side ? Has the succession rights of the spouse are already extended with the choice of the usufruct on the entire estate existing or a quarter in full ownership. Life insurance allows you to increase the share of the spouse in full ownership, the capital received is legally one's own good.

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clause. To transmit the capital to the spouse - that is to say, strictly the person with whom you are married to avoid the designation name. It may be that the person named is no longer your spouse the date of your death. You can limit yourself to the standard clause contracts naming the spouse, the children, etc, However, you can demonstrate greater accuracy in designating "My spouse is not legally separated or divorced, failing that, my children born or to be born in equal shares between them, living or represented..." There, you are bordered on all sides, the separation with the spouse being considered. And the result is anticipated with the children as beneficiaries of the second rank. And for the people pacsées ? Write in the clause "the person with whom I have entered into a civil solidarity pact in force at the time of death". As for the partner, it is treated as a third party (see point 5).

2 Give the choice to the beneficiary

Why not introduce some flexibility to the beneficiary, including your spouse ? Give him the opportunity to waive the capital to leave it up to the recipient(s) following(s), in general the children. This mechanism is experiencing a growing success, according to insurers. Admittedly, the waiver of a beneficiary to reach the capital is possible, even when it is not expressly stated in the clause. But in this case, the one who fails will not be able to choose the person who will benefit from its decision. It is better to draft the clause specifically.

clause. There are many opportunities to give latitude to the recipient spouse. Here is an example : "My wife may at its option accept the profit according to the proportions following : 100 %, 75 %, 50 %, 25 %. She must make it known to the insurance company within a maximum period of four months from the date of my death the amount retained. If it retains a fraction less than 100 % of earnings, the fraction of non-accepted by it for the benefit of my children, living or represented, in equal shares. In the case of the pre-death of my wife, the capital will revert to my children, living or represented, in equal shares. Failing this, my heirs." Here, everything is considered, and the main beneficiary will be able to choose, without disadvantage your children. From this case, adapt it to your situation.

3 of My children, in equal

After the spouse, the primary beneficiary of a life insurance policy are the children. Again, beware of labels registered. In this case, at each new birth, you will need to refresh the designation if you want all your children to be beneficiaries. Other chausse-trappe : without the phrase "living or represented", if one of your children dies before you, his children (your grandchildren) will be excluded from the sharing. Attention, the standard clauses of the old contracts were often silent on this point, the source of family conflict. Yvesz also pragmatic. Why not purchase as many contracts as you have children ? Thus, the regulation of the capital will be faster since none of your descendents will depend on the other.

clause. A formula that is both general and precise allows an equal division between the children : "My children, born or to be born, in equal shares between them, in the event of death or surrender of one of them, his own children, living or represented, for its part, in default to my heirs." All your children will then be the beneficiaries of your membership. Note : the phrase "in equal shares between them" is placed from the outset, to avoid any uncertainty about its application. And the waiver is explicitly provided, allowing a beneficiary to withdraw the benefit of its own children. If you have a disabled child, life insurance is an interesting solution since we can introduce in the beneficiary clause of the conditions of use of the funds, including a transformation of the capital into a life annuity. If you have several children, it is also possible to use a beneficiary clause dismembered. The usufruct will be awarded to the child with a disability, the bare ownership to the siblings. The subscriber can set up a controlled management of the capital by bare-owners, by providing for a clause of re-use in the drafting of the beneficiary clause.

4 Of the capital under condition

The capital is worth, it is your opinion. A recipient may be required to certain expenses, as long as it does not make a debtor. For its good application, there is a clause with a charge must include the notary who will be able to verify if it is met, the insurer, to him, is limited to paying the funds to the designated beneficiary. Several types of bonds are commonly used, such as the one to invest the capital touched on a life insurance policy or of the use for a real estate purchase. Or even convert it into annuity in order to avoid its dissipation.

clause. The imagination is the limit to what is the conditions imposed on the granting of the share capital. Example, you want that at your death, the beneficiary takes care of your pets. You write : "Mr. X., to load for him to collect and take care of my pet, in default to my heirs." Other possibility : the maintenance of a building. You designate "my child, living or represented, who irrevocably agrees to use the paid-up capital maintenance of the building located on rue... This capital will be settled in the study of Master Y. or its successor. Failing that, it will be paid to the heirs."

5 A third person, to the best of its interests

note that on the civil level, the life insurance is outside the estate (articles L 132-12, and The 132-13 of the insurance Code). Capital can, therefore, escape to the heirs, unless they demonstrate that it is "premiums exaggerated." From there on, everything is possible : to transmit to distant relatives, a friend, a lover, a neighbor, etc., But you can also protect yourself and your partner. This one only has the right to a deduction of 1 594 euros on the estate, with the balance being taxed at... 60 % ! Take the case of a capital of 250 000 euros transmitted by last will and testament. In the context of an estate, the partner would leave 149 043 euros to the tax authorities ! With life insurance, by taking advantage of the allowance of 152 500 euros and the imposition of 20 % above, the tax will be only 19 500 euros.

clause. The situations are obviously countless. Take the case of Isabelle, married, without children, who wants to use her life insurance to gratify Maxime, the son of his sister. It must be as accurate as possible in the editorial : "My nephew, Maxime X., born... at..., living..., including the social Security number is..., in default to my heirs." In terms of beneficiary clause, the important thing is that the person be identifiable by the insurer at the date of death. Certainly, a nephew may easily be. But will he be the only one with this quality at the death of Isabelle ? It is better to designate it by name to avoid any dispute if another nephew is manifest. It's the same for a third person. For cohabitants, avoid the standard clause naming the spouse as the first beneficiary, because this term refers to the spouse or to the legitimate wife.

6 transmission generous

for Tax purposes, the amounts bequeathed to a charitable organisation are exempt from transfer duty, pursuant to section 795 of the general tax Code. You can gratify a structure after your death by providing for a bequest in your will or by designating it as a beneficiary of a life insurance. Whatever your choice, the tax rule is the same. On the civilian side, the life insurance has the advantage of avoiding the mandatory rules of the estate. And, except abuse, of power the benefit of the foundation or the association of your choice. Attention, some precautions are to be taken. Make sure in particular that the association is ready to receive your donation (for example, associations, sports, cultural, educational, etc, must be reported for at least three years).

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clause. Imagine that you want to gratify a recognized association of public utility, for example, working in the field of cancer. Do not write "the association X. for the fight against cancer", instead of "association X. the headquarters of which is located on the rue...". Note that it is possible to specify that the capital forwarded to be used with a particular action, as is the case for a donation.