Question to expert
Can I take out a life insurance policy in my granddaughter’s name?
With the agreement of his parents, a life insurance contract can be taken out by a minor and financed by his parents or by his grandparents.
Depending on the nature of the sums paid, the arrangements to be made are different. If the sums are paid on the occasion of events such as a birthday, a diploma, etc., and remain reasonable in their amount, they will be considered as customary presents and will not have to be declared.
Otherwise, they will have to be registered with the tax authorities, under donations, each grandparent under the age of 80 can thus give, free of duty, every fifteen years, to each of their grandchildren, a total of 63,730 euros: 31,865 euros under the exemption for family donations sums of money, added to the 31,865 euros of manual donation.
In order for the grandparents to exercise control over the sums transmitted, the life insurance contract may be accompanied by an assistant pact. The pact makes it possible in particular to provide for a clause of unavailability up to the maximum age of 25 for the grandchild. During this period, any arbitrations, redemptions and advances may be subject to the authorization of the donor grandparent.
Finally, the pact may provide, in the event of the death of the donor grandparent, for the designation of a substitute person.