Promise to make a gift: complete guide

A promise to make a gift (promesse de donation) is a legal undertaking by which a person binds themselves to transfer an asset by way of gift at a specified future time. Unlike an ordinary gift, which transfers ownership immediately, this promise creates an obligation to give without the promisor being immediately divested. This fundamental distinction raises complex questions both for families wishing to organise the transfer of their assets and for practitioners dealing with the specific features of this act, which is a hybrid between a promise and a gratuitous transfer (libéralité).

This guide examines the conditions of validity, the legal effects and the estate planning strategies relating to the promise to make a gift, clearly distinguishing its advantages over a will and over ordinary gifts.

Definition and legal nature of the promise to make a gift

The distinctive features of the promise to make a gift

The promise to make a gift is defined as a contract by which the promisor undertakes to make a gift at a specified or ascertainable time. The French Civil Code does not regulate it as such: Article 1124 of the French Civil Code, which is sometimes relied on, defines the unilateral promise to contract and does not distinguish the obligation to give from the obligation to do.

The majority of legal writers recognise three features of the promise to make a gift. First, it is a synallagmatic (bilateral) contract, since the beneficiary accepts the promise and correspondingly undertakes to receive the future gift. Secondly, it creates an obligation to do, the promisor being required to complete the formalities of the gift on the agreed date; former Article 1142 of the French Civil Code has no longer governed this question since Ordinance No. 2016-131 of 10 February 2016, current Article 1142 dealing with duress, and the performance of obligations is now governed by Articles 1221 et seq. Finally, it is conditional in nature, the final gift being suspended until the specified event occurs.

This hybrid nature explains why the promise to make a gift escapes the mandatory rules governing gifts while enjoying a degree of contractual flexibility.

Distinction from related acts

The promise to make a gift is clearly distinct from a conditional gift. In the latter, the gift is made immediately but its effects are suspended until a condition is fulfilled. The promise to make a gift, for its part, defers the act of giving itself.

It also differs from a will in its contractual nature and in its irrevocability once accepted. Whereas a will remains revocable until the testator's death in accordance with Article 895 of the French Civil Code, the promise to make a gift binds the promisor definitively as soon as the beneficiary accepts it.

An agreement on a future estate (pacte sur succession future) has similarities but remains prohibited by Article 722 of the French Civil Code. The promise to make a gift circumvents this prohibition by creating a contractual obligation that is independent of the promisor's estate.

Conditions of formation and validity

Substantive conditions

The promise to make a gift is subject to the general conditions for contracts laid down in Articles 1128 et seq. of the French Civil Code. Consent must be free and informed, and free from defects. The capacity required is the capacity to contract, which is less strict than the capacity to dispose of property required for gifts.

The subject matter of the promise may be present or future assets, movable or immovable. This flexibility is a decisive advantage over ordinary gifts, which may relate only to present assets in accordance with Article 943 of the French Civil Code. Thus, a business owner may promise to give shares that they will create at a later date or assets that they will acquire.

The cause must be lawful. Promises to make a gift motivated by considerations contrary to public morality or public policy are void. The courts nevertheless accept emotional or family motives, even though they do not constitute a cause in the technical sense.

Formal conditions

Unlike gifts, which require a notarial deed on pain of absolute nullity (Article 931 of the French Civil Code), a promise to make a gift may be concluded by a private deed (acte sous signature privée). This freedom of form is one of its main practical attractions.

A written document is nevertheless strongly recommended for the purposes of proof and the precise determination of the obligations. In the event of a dispute, the beneficiary will have to prove the existence and content of the promise by any means.

Certain promises are nevertheless outside this flexibility. Promises relating to immovable property must comply with the land registration rules (publicité foncière) if they create a right in rem. Promises made by spouses in favour of third parties may require the other spouse's authorisation, depending on the applicable matrimonial property regime.

The time limit and terms of performance

The promise must set a precise or ascertainable term for performance. This term may be a fixed date, a certain event such as the beneficiary reaching the age of majority, or an uncertain event such as the death of a third party.

The absence of a term renders the promise void (caduque) according to settled case law. The court cannot remedy this omission by itself setting a reasonable time limit, since the determination of the term is exclusively a matter for the will of the parties.

The promisor may provide for specific terms of performance: a gift of full ownership or of split ownership (démembrement), with or without charges, subject to conditions precedent or conditions subsequent. This flexibility makes it possible to adapt the transfer to changes in the family and in the assets.

Effects and performance of the promise to make a gift

Obligations of the promisor

The promisor bears two main obligations. First, they must preserve the promised asset and refrain from any acts compromising future performance. This obligation of preservation extends to the fruits and income, unless otherwise stipulated.

Secondly, they must perform the promise on the agreed date by making the gift in the legally required form. Such performance involves drawing up a notarial deed if the gift relates to immovable property or is of a formal nature.

Breach of these obligations engages the promisor's contractual liability, and the beneficiary may obtain damages compensating for the loss suffered. While Article 1221 of the French Civil Code in principle allows specific performance, save where it is impossible or manifestly disproportionate, its application to a promise to make a gift runs up against the requirement of donative intent on the date of the gift and against the formal rules governing gifts; the question is not settled by the texts.

Rights of the beneficiary

The beneficiary acquires a personal right against the promisor as soon as the promise is accepted. This right, which is transmissible to heirs, may be assigned in accordance with the general law.

However, the beneficiary has no right in rem over the promised asset as long as the gift has not been completed. This absence of a right in rem exposes the beneficiary to the risk of the asset being sold or mortgaged by the promisor.

The courts nevertheless recognise certain supervisory prerogatives of the beneficiary. The beneficiary may bring an action to set aside the promisor's fraudulent acts (action paulienne) and seek protective measures in the event of imminent danger.

Revocation and non-performance

The promise to make a gift is irrevocable once accepted, unlike a will. This irrevocability protects the beneficiary's legitimate expectations but may create rigidities if family circumstances change.

Certain grounds of extinction nevertheless remain applicable. Impossibility of performance releases the promisor if it results from force majeure. Termination for non-performance may apply if the beneficiary fails to fulfil their own obligations.

The courts exceptionally accept revocation for ingratitude in the most serious cases, by analogy with Article 955 of the French Civil Code. This solution remains a minority position and requires facts of particular seriousness.

Tax regime of the promise to make a gift

Taxation at the time of the promise

The conclusion of a promise to make a gift generally gives rise to no immediate taxation. The tax authorities consider that the transfer takes place only when the gift is actually made.

This analysis may, however, be called into question if the promise is accompanied by a de facto divestment of the promisor. This would be the case if the beneficiary immediately received the income from the asset or took over its management.

Promises with a very short term may also be recharacterised as disguised gifts subject to gift and inheritance tax (droits de mutation à titre gratuit).

Taxation on performance

Performance of the promise by the actual gift triggers taxation under the rules applicable to gifts. The duties are calculated on the value of the asset on the date of the gift, not on the date of the promise.

This rule may generate substantial gains in value if the value of the asset has risen between the two dates. Conversely, a fall in the value of the asset benefits the donee through a corresponding reduction in duties.

For the calculation of duties, prior gifts made less than fifteen years earlier are added back (Article 784 of the French General Tax Code): the donee's personal allowance (abattement) is thus fully restored only in respect of gifts made more than fifteen years earlier. This period is assessed between successive gifts; the date of the promise has no effect.

Tax optimisation

The promise to make a gift allows certain tax optimisations that are impossible with immediate gifts. The promisor may defer the gift in order to benefit from a restored allowance or wait for a fall in the value of the asset.

It also allows transfers to be spread over several tax years in order to optimise the progressive rates of gift duties.

Care must nevertheless be taken as regards possible recharacterisation in the event of abuse of law (abus de droit). The tax authorities may challenge purely tax-driven arrangements lacking legal or economic substance.

Estate and family strategies

Planning family transfers

The promise to make a gift is a valuable estate planning tool. It allows a gradual transfer of assets to be organised while retaining control of the assets for a specified period.

This technique is particularly suitable for business owners wishing to prepare their succession without divesting themselves immediately. They may promise to give shares to their children while retaining effective management of the business until their retirement.

It also facilitates equality between heirs by allowing subsequent adjustments. Parents may promise different assets to their children and make the necessary rebalancing as their respective situations develop.

Managing complex family situations

Blended families find in the promise to make a gift an instrument for adapting to changes in relationships. A parent may promise certain assets to their children from a first relationship while reserving the possibility of allowing their new spouse to benefit from them depending on the circumstances.

It also makes it possible to deal with the disability or temporary financial difficulties of an heir. The gift may be deferred until the beneficiary has acquired the necessary maturity or stability.

Reciprocal promises between spouses are an alternative to a will-partition (testament-partage) for organising the devolution of separate property in favour of the children of both spouses.

Precautions and limits

The promise to make a gift must not be used to circumvent the reserved portion (réserve héréditaire). Excessive promises in favour of an heir may be reduced when the estate is settled, in accordance with the rules on reduction for infringement of the reserved portion.

Nor can it evade the rights of the surviving spouse. Promises made by a spouse must take into account the statutory or contractual rights of the other spouse in the future estate.

Drafting the promise requires particular attention to the adaptation and termination clauses. Provision should be made for changes in family or financial circumstances in order to avoid deadlock.

Comparison with other transfer instruments

Promise to make a gift versus ordinary gift

An immediate gift transfers ownership instantly and gives the donee the benefit of subsequent fruits and increases in value. This definitive transfer has the advantage of legal certainty but deprives the donor of any future control.

The promise to make a gift preserves the promisor's rights until performance while creating a contractual obligation in favour of the beneficiary. The price of this flexibility is a degree of uncertainty as to actual performance.

A gift with reservation of usufruct may be a worthwhile alternative, allowing the donor to retain the income while transferring the bare ownership (nue-propriété). This technique avoids the uncertainties of the promise but imposes a permanent split of ownership. The financial, management and transfer constraints that this split places on the usufructuary and the bare owner are listed in our article on the drawbacks of split ownership.

Promise to make a gift versus will

A will offers permanent revocability until death but creates no right in favour of the legatees during the testator's lifetime. This precariousness may undermine the certainty of family expectations.

The promise to make a gift, once accepted, binds the parties irrevocably but allows performance during the promisor's lifetime. This feature facilitates the transfer of a business by avoiding the uncertainties of succession.

A will nevertheless remains better suited to residual transfers and to bequests of assets whose composition may change. It also retains the advantage of simplicity for less complex estates.

Combination with other techniques

The promise to make a gift can usefully be combined with other estate planning instruments. It may be accompanied by a forward sale allowing the beneficiary to acquire a fraction of the asset immediately.

It can also be combined with gift-partitions (donations-partages) to organise a gradual transfer that respects equality between heirs. Each child may benefit from promises staggered over time.

Civil companies (sociétés civiles) are a preferred vehicle for promises to make a gift, facilitating the transfer of shares in instalments according to family needs. The creation, tax regime and operation of this transfer vehicle are presented in our guide to the family SCI (French property holding company).

Frequently asked questions

Can a promise to make a gift relate to future assets?

Unlike ordinary gifts, a promise to make a gift may indeed relate to future assets that the promisor does not yet own. This possibility stems from its contractual nature, which escapes the restrictions of Article 943 of the French Civil Code. A business owner may thus promise shares in a company that they will create at a later date. Performance of the promise will, however, be conditional on the promisor actually acquiring the asset at the specified time.

What happens if the promisor sells the asset before the due date?

The sale of the promised asset constitutes contractual non-performance engaging the promisor's liability. The beneficiary may obtain damages but generally cannot recover the asset sold, save in exceptional cases of established fraud. To avoid this risk, it is recommended that the promise be registered in the land register (fichier immobilier) or that specific contractual guarantees be provided for.

Is the promise to make a gift subject to the rules on the reserved portion?

The promise itself is not taken into account in calculating the reserved portion, since it is merely a contractual undertaking. However, the gift that results from it will be subject to the rules on reduction if it infringes the rights of the heirs entitled to a reserved portion. It is therefore advisable to check that the promise is compatible with the promisor's projected disposable portion (quotité disponible).

Can a promise to make a gift be revoked for ingratitude?

The courts exceptionally accept revocation for ingratitude by analogy with Article 955 of the French Civil Code. This possibility remains very restrictive and requires facts of particular seriousness: violence, serious insults or a clear refusal of assistance. Revocation must be sought within one year of becoming aware of the facts complained of and may take place only before the promise is performed.

How can a promise to make a gift be optimised for tax purposes?

Optimisation rests mainly on the choice of the time of performance. It is advisable to wait for the personal allowances to be restored if more than fifteen years have elapsed since a previous gift. Performance may also be deferred if the value of the asset changes unfavourably. Care must nevertheless be taken as regards recharacterisation as a disguised gift if the term is too short or if the beneficiary already enjoys the asset.

Does a promise to make a gift require a notarial deed?

No. Unlike gifts, which require a notarial deed on pain of nullity, a promise to make a gift may be concluded by a private deed. This flexibility facilitates its conclusion and reduces costs. A written document nevertheless remains essential for the purposes of proof and the determination of the obligations. A notarial deed becomes mandatory only at the time of performance, if the gift relates to immovable property.

What is the difference between a promise to make a gift and a conditional gift?

The distinction is fundamental. In a conditional gift, the gift is made immediately but its effects are suspended until a condition is fulfilled. In a promise to make a gift, the act of giving itself is deferred to a future date. This difference has significant consequences: a conditional gift immediately transfers a conditional right, whereas a promise creates only a contractual obligation.

The promise to make a gift is a legal instrument whose place among the techniques for transferring assets must be assessed case by case. Its contractual flexibility and its capacity to adapt to changes in the family make it a useful tool for practitioners and for families wishing to organise their transfers. However, its legal complexity and its tax implications call for rigorous professional assistance. Before taking this route, it is essential to have one's overall asset position analysed by an adviser, in order to ensure that the proposed arrangement is appropriate and legally secure.