Donation-partage: tax advantages and risks of challenge

Imagine: you live in Le Mans, and you wish to transfer your family home to your children without waiting for death, to take advantage of tax reductions and avoid conflicts. The donation-partage seems like the ideal solution. But what happens if one of the children challenges the valuation of a property? Or if the distribution is not equitable?

The question that every owner asks is simple: how to give during your lifetime without creating tensions, while optimising taxation? The donation-partage, governed by articles 1075 et seq. of the Civil Code, offers undeniable advantages: allowances renewed every 15 years, reduced duties, and above all a definitive partition that avoids co-ownership. But certain rules must still be respected.

The Bordeaux Court of Appeal, in a judgment of 5 May 2025, clarifies the conditions of validity of a donation-partage, particularly regarding the valuation of assets. This decision is a reminder for all those considering such a transfer.

The facts: a story that happens every day

Mr X, a 78-year-old owner living in Le Lude, has substantial real estate assets: a main house in Le Mans, a flat in Paris and agricultural land in Sarthe. Keen to anticipate his succession and reduce duties, he decided in 2018 to make a donation-partage to his three children, Anne, Bernard and Claire.

In the notarial deed, he allocated the house in Le Mans (valued at €300,000) to Anne, the Paris flat (valued at €400,000) to Bernard, and the land (valued at €200,000) to Claire, with a cash adjustment (soulte) of €100,000 paid by Anne to Claire to balance the lots. The notary had valuations carried out by an estate agent, but without judicial expertise.

A few years later, Bernard challenged the donation-partage. He believes the house in Le Mans was undervalued: according to him, it was worth €400,000 at the time of the gift, which would break the equality between the children and prejudice the reserved portion (the minimum share that the law reserves for heirs). He brought proceedings before the Le Mans Judicial Court seeking annulment of the donation-partage for lesion (prejudice suffered due to an inaccurate valuation).

The court dismissed his claim, considering that the valuation was reasonable. Bernard appealed. The Bordeaux Court of Appeal upheld the judgment: the donation-partage is valid because the valuation was not manifestly erroneous and the rights of each child were respected. This case illustrates the tensions that can arise even in a united family.

The reasoning of the court — dissected

To understand the decision, we must revisit the rules of the donation-partage. Article 1075 of the Civil Code allows a person to distribute their assets during their lifetime among their presumptive heirs (those who would inherit in the absence of a will), with a definitive effect: the lots are deemed allocated by way of partition, not simple gift. This means that the assets will not be brought into the succession (they will not be reintegrated into the calculation of shares) and that transfer duties are calculated on the value at the date of the gift, with allowances.

The difficulty lies in the valuation of the assets. Article 1078 of the Civil Code requires that the lots be composed equally, but some tolerance is accepted. In case of lesion by more than one quarter (i.e., if the difference between the real value and the declared value exceeds 25%), the gift may be rescinded (annulled) for lesion. This is what Bernard argued: according to him, the undervaluation of the house was such that he had been prejudiced.

The Bordeaux Court of Appeal, in a careful reasoning, applied the settled case law of the Court of Cassation. It examined the arguments of both parties. Bernard relied on a post-gift valuation that valued the house at €420,000. The defence of Anne and the other heirs emphasised the notary's valuation, carried out under market conditions at the time. The judges considered that the difference (€300,000 vs €400,000) did not constitute a lesion of more than one quarter, because the value adopted was within an acceptable range. Above all, they recalled that a donation-partage creates an irrevocable situation except in cases of fraud or manifest error. Here, the valuations had been carried out seriously.

This judgment confirms a jurisprudential trend: judges do not overturn a donation-partage unless there is gross error or fraud. This is security for donors, but also a warning: the valuation must be very rigorous.

What this means for you — practically

If you are an owner considering a donation-partage, this decision reassures you that the deed is solid, provided it is well prepared. For heirs, it reminds that challenging a donation-partage is difficult and costly. Concretely, here are the implications by profile:

• For the donor (the one who gives): you can sleep soundly if you have your assets valued by a qualified professional (notary, estate agent). Do not skimp on this step: a questionable valuation can ruin your plans. Concrete example: a house in Le Mans valued at €250,000 when it is worth €350,000 represents an erroneous cash adjustment. If the difference exceeds 25%, one of your children could request annulment.
• For the favoured heir (the one who receives): you are protected if the valuation is reasonable. But if you have benefited from a deliberate undervaluation, beware: if challenged, you may have to pay a compensatory cash adjustment or return the asset.
• For the prejudiced heir (the one who considers himself less well treated): challenge is possible, but the bar is high. You will need to prove a lesion of more than one quarter or fraud. This requires a judicial expertise, which takes time and money. Better to negotiate an amicable agreement before signing.

A concrete example: in Le Mans, a retired couple gave their assets to their two children. One receives the house (valued at €200,000), the other a portfolio of securities (valued at €250,000). If the house was actually worth €300,000, the child who received the securities is prejudiced by €50,000, i.e., 25% of their share. They can take legal action, but if there is no manifest error, they have little chance of success.

Four tips to avoid this type of dispute

• Have each asset valued by an independent expert: do not rely on your own estimate. A notary can recommend a professional. For a property in Le Mans, use a local estate agent who knows the market. Obtain a detailed written report.
• Provide for a cash adjustment in cash if the lots are not perfectly equal. The cash adjustment allows balancing the shares and avoiding a challenge. Caution: it must be paid in cash or in instalments, and be mentioned in the deed.
• Inform all heirs of the content of the deed before signing. A family meeting at the notary's office allows explaining the choices and answering questions. Transparency is the best antidote to conflicts.
• Include a non-contestation clause in the deed: since the 2006 law, it is possible to include a clause by which the heirs waive the right to challenge the donation-partage for lesion, except in case of fraud. This reinforces irrevocability. Ask your notary if this is appropriate for your situation.

Further reading: related case law and developments

The Bordeaux Court of Appeal did not innovate: it applied well-established case law. Reference can be made to the judgment of the First Civil Chamber of the Court of Cassation of 13 March 2013 (no. 11-27.123), which held that lesion is assessed at the date of the gift, not at the date of the claim. This means that fluctuations in the property market are not taken into account: if the asset increases in value after the gift, this is not lesion.

However, the Court of Cassation has recently toughened its position on the notary's duty to advise. In a judgment of 4 October 2023, it condemned a notary who had not warned the donor about the risk of challenge related to insufficiently documented valuation. Thus, the notary must verify valuations and, if in doubt, call in an expert. This obligation weighs heavily.

Overall, the trend is towards securing donation-partages, but with increased rigour in valuation. In the future, we can expect notaries to systematically use expert appraisals, increasing costs but reducing risks.

In practice: what to do

FAQ:

• Must I necessarily go through a notary for a donation-partage? Yes, the deed must be authentic (signed before a notary) to be valid. The notary registers the deed and calculates the duties.
• Can I make a donation-partage with only one child? Yes, you can give to one child, but this would then be a simple gift. To benefit from the specific advantages of a donation-partage, at least two presumptive heirs are required.
• What are the tax allowances in 2025? Each parent can give up to €100,000 per child every 15 years, free of gift tax. For a donation-partage, the allowance is the same, but the deed allows freezing the value and avoiding the return to the estate.
• What if a child refuses the donation-partage? The donation-partage requires the agreement of all presumptive heirs. If one refuses, you can make a simple gift to those who accept, but you lose the advantages of the partition.
• Can I include assets located abroad? Yes, but rules of international law may complicate taxation. Consult a specialist.

Key takeaways

The donation-partage is a powerful tool for transferring your assets with tax advantages, but it requires careful preparation. The Bordeaux Court of Appeal judgment reminds us that the valuation of assets is crucial: an overly approximate estimate can derail everything.

Are you in a similar situation? A first 30-minute consultation with Maître Perucca (€45) can save you months of proceedings — and often much more. Make an appointment →