Three children share their parents’ estates. The notary, relying on a court-ordered expert report, computes the reduction indemnities (indemnité de réduction, the sum a donee pays back when a gift exceeds the disposable portion) owed by those who received buildings by gift, on their value at the opening of the estate, and the Rennes court of appeal approves: article 922 uses that date, which makes “unnecessary” any discussion of future changes to the planning status of plots at Saint-Pierre-Quiberon. The Cour de cassation (the French supreme court for civil matters), on 4 November 2020, in a reported decision, quashed: “while the application of article 922 made it possible to determine the proportion in which the gifts were reducible, it was necessary, for the calculation of the reduction indemnity, to use the value of the gifted property at the time of partition”. Two dates, two questions, two valuations; and the future planning status is not irrelevant.
The facts
Two spouses married under the community regime die, leaving three children. Difficulties arise in the partition of the estates and of the community. The draft liquidation and partition drawn up by the notary computes the reduction indemnities using, on the basis of the court-appointed expert’s report, the value at the opening of the estate of the gifted buildings added back to the divisible pool.
The Rennes court of appeal, on 30 October 2018, approves the draft. It holds that the notary rightly applied article 922, paragraph 2, of the Civil Code, and that “possible later changes in the classification of the plots located in the municipality of Saint-Pierre-Quiberon are not such as to justify a new investigation”. One of the heirs appealed to the Cour de cassation.
The decision
The first civil chamber quashed in full, under article 868 of the Civil Code in its wording prior to the Act of 23 June 2006 (Cass. 1re civ., 4 November 2020, no. 19-10.179, reported). “Under that provision, the reduction indemnity is computed on the value of the things given or bequeathed at the time of partition, and their condition at the date the gift took effect.” The same rule now appears in article 924-2.
“In so ruling, whereas, while the application of article 922 made it possible to determine the proportion in which the gifts were reducible, it was necessary, for the calculation of the reduction indemnity, to use the value of the gifted property at the time of partition, the court of appeal breached the above provision.” Remittal to the Angers court of appeal.
What this changes for valuation
Two dates in the same file. The first valuation serves to know whether the gifts exceed the disposable portion and in what proportion: that is the article 922 pool, assets existing at death and gifted assets, notionally added back “according to their condition at the time of the gift and their value at the opening of the estate”. The second serves to quantify what the donee must give back: the reduction indemnity is computed “on the value of the things given or bequeathed at the time of partition”. A report that supplies only the value at death leaves the notary without a basis for the second operation; that is what was quashed. The glossary describes the réduction des libéralités and the quotité disponible.
The partition, or the closest date. When the expert appraisal precedes the partition by several years, the value “at the time of partition” is that of the closest possible date, and the report gives the material to update it up to the actual partition. The article on the reduction indemnity without partition deals with the case where there is no joint ownership between legatee and forced heir, and the value is taken at liquidation; the article on the asset existing at death and sold later deals with the calculation pool.
Condition at the date of the gift, with the planning rules of the partition date. The condition of the property is frozen at the gift: land given bare is valued bare, as recalled in the article on the land gifted bare. But the value follows the market and land-use law up to the partition. Coastal plots whose classification in the local plan changes between the death and the partition are no longer worth the same; that is precisely the discussion the court of appeal had found unnecessary, and which will have to be resumed. The valuer therefore records the zoning at each date and, where a revision is under way, flags its likely effect without treating it as settled.
The court-ordered appraisal must cover both values. In this case the expert had valued at the opening of the estate, as the assignment no doubt required; the report was therefore unusable for the indemnity. A valuer given a reduction assignment proposes both valuations from the outset, or tells the judge that the second will be missing, as in the partition assignments described in the guide on the standard court mission for a partition.
An old text, a constant rule. The ruling applies article 868 as it stood before 2006, because the estates were opened before the reform; the current article 924-2 says the same, and adds the value at the date of sale where the donee has sold. The rule therefore holds for all estates.
What the valuer takes from it
- The article 922 pool is valued at the opening of the estate; it serves to measure whether the gifts are reducible and in what proportion.
- The reduction indemnity is computed on the value of the gifted property at the time of partition, in its condition at the date of the gift.
- A change in planning status between the death and the partition alters the value used for the indemnity, not the condition of the property.
- The expert report supplies both values, with their dates, and the material to update them up to the partition.
- The rule of former article 868 is carried into article 924-2 of the Civil Code.
Further reading
The Market value page describes the assignment, its timescale and its fee. The guide Standard court mission: market value for a partition and the glossary entries réduction des libéralités, quotité disponible and réserve héréditaire complement this article. On the same theme: Reduction indemnity: without partition, valued at liquidation and Reduction of gifts: an asset sold after death is valued at death. The decision is available on Légifrance.
What next
Gifted plots whose planning status may change, and a reduction indemnity to set?
I establish the value of the gifted property at the opening of the estate for the calculation pool, then at the date closest to partition for the indemnity, in its condition at the date of the gift, with the planning rules of each date.
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