Praslicka case law (unsettled contract and marital community)
The rule that the surrender value of an unsettled life insurance contract, funded with community money, belongs to the marital community to be divided on the death of the spouse who was not its subscriber.
When the insured dies, the capital is paid to the beneficiary outside the estate. But if it is the other spouse who dies, the survivor's contract continues, and is therefore neither settled nor paid: the question is whether its value belongs to the community that must be wound up. France's highest civil court answered yes when the premiums were paid with community funds, which brings half of the surrender value into the deceased's estate. The ruling changes the split between the surviving spouse and the children, especially from a first marriage, and it had tax effects that were long debated. It is a reminder that life insurance is outside the estate only for capital paid out, not for savings still in progress.
The first civil chamber of the Cour de cassation set out the rule on March 31, 1992; a ministerial answer of February 2016 then specified that this half of the surrender value forms part of the assets subject to inheritance tax for estates opened since January 1, 2016.
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