Parents across France open Livret A (regulated savings accounts) in their children’s names for what seems like a straightforward reason: another €22,950 of tax-free savings capacity. The logic feels sound. The account earns interest exempt from income tax and social contributions, the child won’t need the money for years, and parents maintain full control until the child reaches majority. In practice, many families treat these accounts as flexible extensions of their own savings, until they discover French law views the arrangement very differently.
The Legal Reality: Your Child’s Money, Not Yours
When you deposit money into a Livret A opened in your child’s name, you make an irrevocable transfer of ownership. French legal doctrine considers these contributions as dons (gifts) that immediately exit your patrimony and become the property of your child. You don’t simply “manage” your own money under your child’s name, you give it away.
Service-Public.fr, the official French administrative portal, states this explicitly: parents are legal administrators, not owners, of their minor child’s Livret A. This distinction carries real weight. As administrator, you may only use the funds for expenses directly related to the child’s entretien et éducation (maintenance and education), school supplies, medical costs, extracurricular activities, or housing expenses that benefit the child. Any withdrawal serving the parents’ own needs, even temporarily, technically constitutes a don à ascendants (gift to ascendants), a separate legal category with its own tax implications.
The Caisse des dépôts et consignations (CDC), which manages the Livret A, doesn’t monitor every transaction. Banks rarely challenge small withdrawals. But this discretion creates a dangerous illusion of flexibility. The legal framework remains unchanged: the money belongs to your child, and you are a fiduciary administrator with narrowly defined powers.
Tax Implications: Gift or “Present d’Usage”?
The timing and amount of your contributions determine their tax classification. A €500 deposit on your child’s birthday qualifies as a présent d’usage (customary gift), which remains outside standard donation reporting requirements. Monthly transfers of €200, however, look like systematic gifts and must be declared if they exceed annual allowances.
French tax law allows parents to give each child up to €100,000 tax-free every fifteen years, but this exemption requires a formal déclaration de don (gift declaration) before a notary. Without this paperwork, you risk complications if tax authorities audit your accounts. The distinction matters because présents d’usage must respect “reasonable amounts” based on family circumstances. A €2,000 birthday deposit for a ten-year-old might raise eyebrows during a tax audit.
More importantly, the money no longer counts as part of your assets. If you face bankruptcy or legal claims, your child’s Livret A remains protected, but only if you can prove you respected administrative rules. Commingling funds for personal use destroys this protection and could lead to reclassification as tax fraud in extreme cases.
The Gray Zone: What Actually Happens in French Families
Despite clear legal boundaries, many parents treat their children’s Livret A accounts as short-term liquidity sources. One parent admitted online to occasionally using their child’s savings to cover cash flow gaps, always repaying a few hundred euros later. Another described it as “the family’s emergency fund that nobody talks about.”
This practice remains widespread because enforcement is virtually non-existent for small amounts. French banks don’t have resources to verify whether a withdrawal pays for a child’s music lessons or a parent’s car repair. The DGFiP (Direction générale des Finances publiques) rarely investigates minor infractions. But “everyone does it” doesn’t make it legal, and problems arise when families split or face scrutiny.
During divorce proceedings, Livret A accounts appear on asset declarations. If one parent can prove the other misused a child’s savings for personal expenses, courts may adjust financial settlements or even pursue abuse of trust charges. The risk increases with larger amounts. A parent who withdraws €5,000 from a child’s Livret A to fund a vacation creates a paper trail that’s hard to justify.
Real Risks: When Informal Use Becomes Legal Trouble
The legal framework isn’t theoretical. French courts have ruled on cases where parents misused minor children’s assets. While criminal prosecution for abus de confiance (abuse of trust) remains rare, civil consequences are more common. A parent who depletes a child’s Livret A may be forced to repay the amount plus interest, and judges can modify custody arrangements if financial irresponsibility reflects broader parenting issues.
The risk multiplies after your child turns 16. From this age, French law requires you to capitaliser (capitalize) the funds, meaning you can no longer withdraw money, only add to it. The account must grow until the child reaches majority. If you’ve been treating the Livret A as a revolving credit facility, the 16th birthday cutoff can create an awkward cash crunch.
At 18, your child gains full control. They can withdraw everything without consulting you. For parents who viewed the account as family savings, this moment often brings an unpleasant surprise. The law doesn’t care about your intentions, it cares about whose name is on the account.
Better Alternatives: Assurance-Vie and Strategic Giving
If you want to build tax-efficient savings while maintaining more control, assurance-vie (life insurance) offers superior flexibility. Unlike a Livret A, an assurance-vie contract allows you to designate beneficiaries and set conditions for access. You can open a policy in your own name with your child as beneficiary, or open a juvenile policy where you remain the contract holder until a specified age.
Assurance-vie also provides better long-term returns. While the Livret A rate dropped to 1.5% in February 2026, assurance-vie funds can deliver 3-5% annually over a decade, with the same tax-exempt status after eight years. The plafond (cap) is theoretically unlimited, and you maintain strategic control over timing and amounts.
For parents determined to use a Livret A, the safest approach involves two rules:
1. Make contributions as présents d’usage on birthdays and holidays, not as regular monthly transfers
2. Never withdraw money except for documented child-related expenses you could justify to a judge
Practical Guidance: What French Parents Should Actually Do
First, decide the account’s purpose. If you want to teach your child about saving and compound interest, a Livret Jeune (youth savings account) from age 12 offers better learning opportunities with the same tax benefits. If you want to build a nest egg for their future, assurance-vie provides more growth and control.
Second, document everything. Keep receipts for any withdrawals and a written log of how the money served your child’s interests. If you contribute €1,000 annually, make it a single transfer in December with “Christmas gift” in the reference field.
Third, communicate with your child. From age 12, involve them in decisions. This establishes a paper trail of responsible administration and prepares them for financial independence. When they turn 18, they should understand why the account exists and what obligations came with your management.
Finally, consider the évolution récente du taux du Livret A (recent evolution of the Livret A rate). With yields falling to 1.5% and trends dans les comportements d’épargne des Français (trends in French savings behavior) showing massive outflows from Livret A accounts, the product’s appeal is fading. French savers withdrew €2.12 billion more than they deposited in 2025, the first net outflow since 2015. Better options now exist for virtually every savings goal.
The Bottom Line
A Livret A in your child’s name offers genuine tax advantages, but it doesn’t function as a family slush fund. French law treats contributions as irrevocable gifts, and parental access is limited to child-specific expenses. While enforcement remains lax for small infractions, the legal risk increases with amount and scrutiny.
The families who benefit most are those who respect the rules: they make occasional contributions as genuine gifts, document all withdrawals, and view the account as their child’s property, not an extension of their own. Everyone else is playing a risky game that can backfire during divorce, tax audits, or when the child turns 18 and claims money their parents always considered theirs.
For most French households, assurance-vie or other long-term investments provide better returns with more transparent control mechanisms. The Livret A remains a useful tool for teaching children about savings, but it’s a poor vehicle for parents seeking flexible tax-free storage. The envelope exists, but it’s addressed to your child, not your family.
