Inheritance in Monaco - Civil, Tax and International Framework

Estate transmission in Monaco is governed by a highly specific framework combining civil law, taxation and private international law. These rules are particularly relevant where assets are located in Monaco, when the deceased was a Monaco resident, or when cross-border elements involve France or other jurisdictions. Notarial procedures also follow distinct local principles.

Monaco Law No. 1.448 of 28 June 2017 on Private International Law introduced the principle of a single applicable succession law. This significantly facilitates civil-law estate planning for international structures connected to Monaco. However, the absence of tax harmonisation continues to generate substantial complexity.


Determination of the Applicable Law

The settlement of an international estate first requires identifying the applicable succession law. Since the 2017 reform, Monaco has adopted an approach closely aligned with EU Regulation No. 650/2012 of 4 July 2012. The former dual criterion - distinguishing between movable and immovable assets - has been replaced by a single connecting factor: the deceased’s domicile at the time of death, defined as their main establishment.

In most cases, this domicile corresponds to the “last habitual residence” under European law, generally established after at least five years of presence. This mechanism significantly reduces conflicts of law between Monaco and EU Member States.

Accordingly, a Monaco resident holding assets both in Monaco and in several EU countries will, in principle, be subject to one single succession law: Monaco law. However, consistent with its attachment to forced heirship, Monaco law allows heirs to invoke the reserved portion guaranteed under the deceased’s national law, subject to limited exceptions.

The resident may also elect, through a professio juris, the law of their nationality to govern their succession, mirroring the European system. This tool is a key element of estate planning, ensuring legal predictability and coherence.


Tax Principles and Territorial Scope

Monaco levies inheritance tax exclusively on assets located within its territory. Assets situated in the Principality are therefore taxed according to Monaco rules, irrespective of the nationality or residence of either the deceased or the heirs.

The surviving spouse and direct descendants benefit from a full exemption for assets located in Monaco. Other degrees of kinship are subject to moderate tax rates:

- Between siblings : 8%
- Between uncles, aunts, nephews and nieces: 10%
- Other collateral relatives : 13%
- Non-related beneficiaries : 16%


Forced Heirship - A Cornerstone of Monaco Civil Law

Monaco strictly applies the principle of forced heirship. Reserved heirs, in particular children, must receive a minimum share of the estate. Testamentary freedom is therefore legally restricted.

Even where a will exists, compliance with reserved shares must be verified, failing which the will may be partially challenged.


International Successions and Conflicts of Jurisdiction

Under Monaco private international law, the succession is in principle governed by the law of the deceased’s domicile at the time of death, unless a national law has been expressly chosen. For real estate assets, however, the law of the situs continues to play a decisive role.

Where the estate spans several countries, multiple jurisdictions may be involved, requiring close coordination between notaries and judicial authorities in different States.


Succession Procedure in Monaco

There is no equivalent to the Anglo-Saxon “probate” system in Monaco. The succession is handled under Monaco law through the notarial process.

The notary prepares the deed of notoriety, carries out asset inventories, issues certificates of entitlement and completes real estate transfer deeds. For immovable property, the involvement of a notary is mandatory, and in certain cases the courts or administrative authorities may also intervene.

Standard documentation includes death certificates, title deeds, wills, marriage contracts and heirs’ identification documents.


Estate Planning Tools and Local Specificities

Several estate planning instruments are recognised in Monaco:

- Wills, which remain the primary tool but must comply with forced heirship. Foreign wills are admissible provided form requirements, choice-of-law rules and compatibility with Monaco law are respected.
- Lifetime gifts and partition donations, permitted but subject to both civil and tax constraints.
- Holding and property companies, widely used to structure indirect ownership of real estate. These vehicles materially affect both the tax treatment and the procedural handling of estates.
- Trusts, which are recognised in Monaco. However, the law governing the trust does not override the applicable succession law. Where a trust is settled by a national of a jurisdiction that does not recognise forced heirship (e.g. the United Kingdom), Monaco forced heirship rules do not apply.
- Foreign succession agreements recognised provided they do not infringe the reserved portion under the applicable succession law.


Practical Example - A Frequent Cross-Border Structure

One of the most common and complex configurations, both from a civil and tax perspective, involves French real estate held through a Monaco SCI or SCP, where the main shareholder is a Monaco resident and the heirs are in several countries.

A Monaco company holds real estate located in France. The main shareholder resides in Monaco. Upon death, the heirs live in France, the United States and the United Kingdom.

The 1950 Franco-Monégasque tax convention, supplemented by more recent administrative positions, governs the tax treatment and limits double taxation risks. In practice, assets located in Monaco are generally not taxed in France as part of a succession, subject to certain conditions.

However, where the deceased held French assets directly or indirectly, French tax law may apply. While the bilateral convention often mitigates double taxation, it does not always eliminate it entirely.

In this structure, the deceased does not own the French property directly but rather holds shares in a Monaco company. From a civil-law standpoint, the estate concerns company shares governed by Monaco law. However, under Article 750 ter of the French General Tax Code, shares in property-rich companies are treated as French real estate for inheritance tax purposes.

As a result, the heirs must declare and pay inheritance tax in France based on the value of the underlying French property, notwithstanding the Monaco corporate structure.

Civilly, the succession of the shares remains governed by Monaco law and its forced heirship rules. Fiscally, France retains the right to tax the underlying property. In some cases, the Monaco entity may also be recharacterized as an artificial structure.

Lastly, heirs residing abroad will be subject to their local tax regimes for future income (dividends, rental income) and corresponding reporting obligations, even though the succession itself is administered by a Monaco notary.


Conclusion

Any international estate involving Monaco requires a dual civil and tax analysis, taking into account residence, nationality, location and legal nature of the assets, as well as the situation of the heirs.

It is a mistake to assume that a foreign will automatically prevails. Its form, choice-of-law clause and compliance with forced heirship must be carefully reviewed.

A comprehensive estate and tax audit remains the only reliable way to secure the transfer of wealth and to avoid serious disputes for the heirs.