You want to help your grandchildren to protect them from the economic crisis that could set in in the coming years following the Covid-19 pandemic. Donation, life insurance or PEL… update on the savings products available to shelter your family.
The economic crisis caused by the Covid-19 could have repercussions on the financial situation of your loved ones. Do you have questions about the future of your grandchildren and want to give them a boost? Depending on your age, you have the choice between different financial devices. Which one to choose ? Lighting with Rosa Riche, Head of Heritage Engineering at Cholet-Dupont.
Protecting your family financially
With the Covid-19 health crisis, the economic outlook seems blurred. The period is favorable for reflection. You may have relatives in your family who have suffered partial unemployment for one or two months. One thing is certain, the consequences of the current crisis will last for many years and reshuffle the cards for many families. Your children seem to be safe. You may be wondering more about the economic situation that awaits your grandchildren. In 5, 10 years will they be able to buy a house, have a stable job allowing them to properly support themselves. All of these questions are worth considering how you can help them.
Send by donation
To help his grandchildren in times of crisis, the donation seems to be very suitable, already for fiscal reasons. Namely, a donation made by a grandparent to his grandchild automatically benefits from a reduction of 31,865 euros, and this, every fifteen years. So, you and your spouse can completely decide to make a classic donation of this amount each. This allows your grandchild to pocket 63,730 euros without paying anything to the taxman. ” This amount can even be doubled when the donor grandparent is less than 80 years old on the date of the donation and his grandchild over 18 years old Says Rosa Riche. It’s about family donation of money, only consented as the name suggests in the form of money. It is also exempt up to 31,865 euros. These two forms of donation are cumulative. An interesting way to send a nice sum, i.e. 127,460 euros in total for a grandparent couple, without going through the public treasury box!
Rosa Riche specifies, however, ” in order to run the 15-year period, it is imperative to register these donations with the tax authorities. If they take the form of manual donations, the manual donation recognition form n ° 2735 which must be completed is available on the website impot.gouv.fr “
Like all donations, manual donations may have conditions attached. The donor can thus stipulate a ban on spending capital before the age of 25, for example. He can, if the donee is a minor, designate the person who will administer the donated funds until he reaches the age of majority.
READ >>>> Donation / inheritance: the child has an interest in executing the financial agreements made with their parents
Open an ELP in their name
Another option, more interesting besides than the classic booklet A or young booklet, the opening of an ELP with the names of the grandchildren. This housing savings plan can actually be used to finance the acquisition of real estate when your grandchild needs it, which may meet your desire to secure his first steps. The PEL, open for a minimum duration of 4 years (under penalty of losing certain advantages), assumes a payment of 225 euros upon subscription then annual payments which cannot be less than 540 euros. ” In total, and taking into account the payment limit of the ELP, you could, over time, forward 61,200 euros. Be careful however, like any customary present (gift made on the occasion of a particular event), it supposes an absence of impoverishment for the grandparent and depends on his state of fortune Says Rosa Riche. For plans opened since 2018, interest is subject to a 30% flat rate (12.8% except option for the scale of the IR plus 17.2% of social security contributions). With a rate of 1% gross (or 0.7% net), the PEL offers a remuneration slightly higher than that of the Livret A. Note that you can combine the opening of a PEL and a simple donation for example.
Take out a life insurance policy
You can choose to name your grandchildren as beneficiaries of your life insurance policy. And if your payments were made before age 70, you can transmit a capital of 152,500 euros per subscriber and per beneficiary, without taxation. You can also combine this beneficiary designation with a donation and a family donation of money. ” One of the main advantages of life insurance is the possibility to modify the clause whenever you want! It is entirely possible to designate a grandchild when subscribing, then to modify the clause, years later, to modify the beneficiaries or add others. Finally, between family donations of money, donations and life insurance, you can both gratify your grandchildren during your lifetime and upon your death. Concludes Rosa Riche.