Inheritance Law in Monaco: Forced Heirship, Tax Rates and Succession Rules

Overview

Monaco's inheritance law is governed primarily by the Monegasque Civil Code and the fiscal provisions on succession duties. Two features make Monaco's succession regime particularly notable: the forced heirship rules (réserve héréditaire) that protect close family members, and the complete exemption from inheritance tax for transfers in the direct line (spouse, children, parents).

For residents of Monaco, and for anyone owning assets situated in the Principality, understanding these rules is essential for estate planning.

Inheritance tax rates

Monaco's inheritance tax (droits de mutation par décès) applies only to assets physically situated in Monaco. The rates depend entirely on the family relationship between the deceased and the heir:

• Direct line (spouse, children, parents): 0% — completely exempt
• Siblings: 8%
• Uncles, aunts, nephews, nieces: 10%
• Other relatives: 13%
• Unrelated persons: 16%

This means that a spouse inheriting a Monaco apartment, bank accounts held in Monaco, or other Monegasque assets pays no inheritance tax whatsoever. The same applies to children and parents.

Territorial scope

A critical point: Monaco's inheritance tax applies only to assets located in Monaco. It does not tax foreign-situated assets, even if the deceased was a Monaco resident. Conversely, assets in Monaco belonging to a non-resident deceased may be subject to Monegasque succession duties based on the relationship between the deceased and the heir.

Forced heirship (réserve héréditaire)

The principle

Like French law, Monegasque law imposes forced heirship — a system under which a portion of the estate (the réserve) is reserved by law for certain heirs, and the deceased cannot dispose of it freely by will. The remaining portion (the quotité disponible) may be left to anyone.

Reserved shares

The reserved shares under Monegasque law are:

• One child: the réserve is one-half (1/2) of the estate; the quotité disponible is one-half.
• Two children: the réserve is two-thirds (2/3) of the estate; the quotité disponible is one-third.
• Three or more children: the réserve is three-quarters (3/4) of the estate; the quotité disponible is one-quarter.

If there are no children, the surviving spouse and ascendants (parents) may have reserved rights depending on the specific circumstances.

Limits on testamentary freedom

A testator residing in Monaco cannot disinherit their children entirely. Any will that infringes the réserve may be challenged by the reserved heirs through a legal action (action en réduction). The court will reduce testamentary gifts to restore the reserved shares.

Wills in Monaco

Types of wills

Monegasque law recognises several forms of will:

• Olographic will (testament olographe) — handwritten, dated, and signed by the testator. No witnesses or notary required, but it must be entirely in the testator's own handwriting.
• Notarial will (testament authentique) — drawn up by a notary in the presence of two witnesses (or two notaries). This form offers greater legal certainty and is harder to contest.
• Mystical will (testament mystique) — a sealed document presented to a notary and witnesses. Rarely used in practice.

Depositing a will

Wills — particularly olographic wills — should be deposited with a Monaco notary for safekeeping. This ensures the will is located and opened promptly after the testator's death.

Succession procedure

Opening the succession

Upon the death of a person who was resident in Monaco or who owned assets there, the succession is opened. The notary plays a central role:

1. Identification of heirs — the notary establishes who the legal heirs are, whether a will exists, and whether the forced heirship rules apply.
2. Inventory of assets — all assets situated in Monaco (property, bank accounts, movable property) are identified and valued.
3. Settlement of debts — the estate's debts are settled before distribution.
4. Distribution — the estate is distributed according to the will (subject to the réserve) or, in the absence of a will, according to the intestacy rules of the Civil Code.
5. Tax declaration — the notary files the succession tax declaration with the Direction des Services Fiscaux.

Acceptance or renunciation

Heirs are not obliged to accept an inheritance. They may:

• Accept unconditionally
• Accept with the benefit of inventory (limiting liability to the value of the inherited assets)
• Renounce the inheritance entirely

Cross-border considerations

Residents vs non-residents

For Monaco residents, succession to movable assets (bank accounts, securities, personal property) is generally governed by the law of the deceased's nationality or domicile, depending on the applicable conflict-of-laws rules. Succession to immovable assets (real estate) in Monaco is governed by Monegasque law.

EU Succession Regulation

Monaco is not a party to the EU Succession Regulation (Brussels IV), which allows EU citizens to choose the law applicable to their succession. However, EU citizens resident in Monaco should be aware that their home country's courts may apply Brussels IV and potentially designate Monegasque law for Monaco-situated assets.

Tax treaties

Monaco has limited tax treaty coverage for inheritance matters. Residents with assets in multiple countries should seek specialist advice to avoid double taxation or conflicting succession rules.

Practical tips

• Engage a Monaco notary to assist with estate planning, especially if you hold assets in multiple jurisdictions.
• If you have children, be aware that you cannot freely dispose of more than the quotité disponible — plan accordingly.
• A notarial will is recommended for complex estates, as it provides stronger legal certainty.
• Direct-line heirs (spouse, children, parents) pay 0% inheritance tax on Monaco-situated assets — this is one of Monaco's most significant fiscal advantages.
• Review your estate plan whenever your family circumstances change (marriage, divorce, birth of a child).