Known as the Elvis Presley of France, Jean-Philippe Léo Smet, better known as Johnny Hallyday, died in 2017 with a heavily contested estate. Hallyday had a home in California, was a tax resident of California and had his (fourth) last will drafted in California. However, he was born in France, lived mostly in France and died in France.
The issue arose when his final last will disinherited his oldest two French children (spawns of his first
loves). Under French law, one may NOT disinherit one’s children; they are entitled to at least a portion of one’s estate, depending on the number of one’s children. In this case, his two older children were each entitled to 18% of his $50M estate. The kids challenged the final California last will claiming that French law should govern their father’s estate. He was, after all, a French heartthrob and lived a relatively anonymous life in California.
The fight dragged on and on in the French and the California courts and finally resolved with a
settlement of around $3M to his oldest daughter (along with a guitar and a signed platinum record).
Hallyday’s son gave his interest to his sister in the interest of settling the dispute.
So, what can we learn from this Frenchie?
We can learn that when it comes to not only real estate, but also estate planning, it’s location, location, location! Citizenship in an estate plan matters. Most dual citizenship folks don’t need to worry about the issue of child(ren) dis-inheritance, it’s not that common. However, all dual citizenship folks need to worry about estate tax and/or inheritance tax. It’s important that dual citizenship individuals not only plan their estates, but also strategize tax efficiency. These estate plans must involve (or be reviewed by) an accountant familiar with the treaties of that particular country to be complete.
And there you have it folks, we learn that if you identify as French, you may be subject to the French
laws and if you have citizenship in another country, it makes sense to get an accountant to review your plan to make sure that there aren’t any tax surprises for your heirs.
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