The €9 Trillion Question: Should French Parents Spend Their Savings or Leave It to Kids Who’ll Inherit at 60?
A thirty-year-old Parisian engineer earning €45,000 annually should be able to afford a decent apartment in the city. Instead, he’s living with his parents in the suburbs, commuting two hours daily, and watching his savings stagnate while property prices climb 8% per year. This isn’t an isolated case, it’s the new normal in France, and it sits at the heart of the most uncomfortable financial conversation families are avoiding.
The debate is simple but emotionally charged: Should aging parents live frugally to preserve wealth for their children, or spend their savings enjoying life? In France, this question carries extra weight. The country faces an unprecedented grande transmission (great wealth transfer) of €9 trillion from baby boomers to their heirs by 2040. Yet many wonder if this transfer arrives too late to matter.
The “Grande Transmission” Explained: Why €9 Trillion Is Creating Anxiety, Not Relief
French economists call the next two decades the “great transmission” for good reason. The generation born between 1946 and 1964, France’s baby boomers, has accumulated unprecedented wealth. According to Insee, the French national statistics office, people aged 65 and older contributed two-thirds of the increase in France’s savings rate between 2023 and 2024. They hold 60% of real estate assets and 60% of financial wealth.
This concentration has created what economist André Masson terms a gérontocratie patrimoniale (asset gerontocracy). The consequences are concrete: annual wealth transfers through inheritance and donation (lifetime gifts) will soon exceed the total amount paid out in pensions. Yet the average heir receives their inheritance at age 60, precisely when they need it least.
The timing mismatch creates a cruel irony. Young French workers face a housing affordability crisis unlike any previous generation. In Paris, buying a three-bedroom apartment now requires a monthly income approaching €10,000. In Lyon, a couple each earning €3,500 per month struggles to qualify for a mortgage on a modest two-bedroom flat. Yet their parents, sitting on properties bought decades ago, hesitate to help financially, preferring to preserve capital for inheritance.
The Case for Spending: “Why Die as the Richest Person in the Cemetery?”
Walk into any café in Provence and you’ll hear the argument: “J’ai travaillé toute ma vie, je vais en profiter maintenant” (I worked my whole life, I’m going to enjoy it now). This perspective isn’t mere selfishness, it’s a calculated response to demographic reality.
Consider the math. A 65-year-old retiree with €500,000 in savings faces a choice. If they spend €50,000 annually on travel, home improvements, and hobbies, they’ll deplete their capital in ten years. If they live frugally on investment income alone, they’ll leave a substantial inheritance, but at what cost? As one financial planner notes, many retirees who choose frugality end up with regrets, not riches.
The spending argument gains strength when examining what heirs actually receive. A 30-year-old receiving €100,000 can use it as a property down payment, eliminating years of rent payments. The same €100,000 given to a 60-year-old who already owns property and has a fully funded pension adds little practical value. It might fund a nicer car or extra vacations, but it doesn’t change their life trajectory.
This perspective aligns with changing attitudes toward intergenerational property ownership and financial expectations. Many young French no longer expect to inherit, they expect to build wealth through their own efforts, particularly through rising retail investment among ordinary French families and explosion of ETF investing among French savers.
The Case for Preserving: Family Duty and Social Mobility
The counterargument runs deep in French culture. Many parents view wealth preservation as a moral obligation, not a financial choice. The logic is straightforward: “My parents helped me buy my first apartment, so I must do the same for my children.”
This duty-based approach reflects France’s legal framework. The réserve héréditaire (forced heirship reserve) guarantees children a minimum portion of their parents’ estate, one-half with one child, two-thirds with two children, three-quarters with three or more. Unlike Anglo-Saxon systems where you can disinherit anyone, French law enforces family obligation.
Beyond law, there’s a practical argument for preservation. French social mobility increasingly depends on family wealth transfers. With housing affordability challenges facing young French reaching crisis levels, parental assistance has shifted from helpful to essential. A young couple without family support faces a 15-20 year delay in homeownership compared to peers receiving down payment assistance.
The preservation mindset also addresses economic insecurity. Many baby boomers fear outliving their savings due to increased longevity. They hoard assets as precautionary savings, worried about healthcare costs and loss of autonomy. This behavior, while rational for individuals, creates a macroeconomic problem: seniors invest in low-risk products like the Livret A (tax-free savings account) rather than funding productive investments.
The Timing Problem: Why 60 Is the Wrong Age to Inherit
The core dysfunction lies in inheritance timing. In 1900, French heirs received wealth around age 25, perfect timing for starting families and buying homes. Today, the average heir receives their inheritance at 60, when they’re approaching retirement themselves.
This delay stems from two factors. First, increased life expectancy means parents live into their 80s and 90s. Second, French law strongly protects surviving spouses, who can delay wealth transfer for years after a partner’s death. The result: a society where retirees inherit from retirees.
The timing problem creates perverse outcomes. A 35-year-old teacher struggling with student debt and rent receives no help. At 60, she inherits €200,000 from her parents, but she already owns her home and has a pension. The money funds a Mediterranean cruise rather than life-changing opportunities.
Some families attempt to solve this through early donation (lifetime gifts). French law allows parents to give each child €100,000 every 15 years, tax-free. A couple with two children could transfer €400,000 without tax consequences. Yet many parents resist, fearing loss of control or future financial needs.
French Legal Toolbox: How to Navigate the System
Understanding French inheritance law reveals more flexibility than most realize. The system balances réserve héréditaire (forced heirship reserve) with quotité disponible (disposable portion), the share you can allocate freely.
For a couple with two children, the disposable portion equals one-third of the estate. You can leave this to anyone: a favorite child, a charity, or a surviving spouse. Strategic use of this portion can address fairness concerns without breaking legal obligations.
Assurance-vie (life insurance) offers the most powerful workaround. Funds pass directly to designated beneficiaries outside standard inheritance rules. Each beneficiary receives €152,500 tax-free for contributions made before age 70. A parent could designate one child as sole beneficiary of a €300,000 policy, bypassing the forced heirship reserve entirely, though this might trigger family conflict.
The Pacte Dutreil (Dutreil pact) provides another tool for business owners, allowing 75% tax exemption on transferred company shares if heirs commit to running the business for several years. This mechanism preserves family enterprises while reducing tax burdens.
Modern Strategies: Breaking the Taboo
Forward-thinking families are abandoning traditional approaches. Three strategies are gaining traction:
1. Early, Gradual Donations
Instead of one large transfer at death, parents give €30,000-€50,000 every few years. This helps children when they need it most, during home purchases or career transitions, while allowing parents to monitor how recipients handle money. The 15-year tax allowance renewal makes this approach sustainable.
2. Skipping Generations
When children are already financially secure, grandparents can bypass them and give directly to grandchildren. This provides a €100,000 tax-free allowance per grandparent (versus only €1,594 for grandparent-grandchild transfers without the intermediate generation’s involvement). The strategy requires children to formally renounce their inheritance rights, a step many hesitate to take.
3. Transgenerational Life Insurance
New products allow parents to purchase assurance-vie (life insurance) policies where ownership transfers to children upon death, but the policy continues for another 20-25 years. This creates long-term, tax-advantaged wealth that can benefit grandchildren without triggering succession taxes.
These strategies require conversations many French families avoid. Cultural taboos around discussing money and death prevent optimal planning. Yet professionals report that families who break these taboos experience less conflict and better outcomes.
Investment Implications: How Conservative Seniors Are Starving the Economy
The wealth transfer debate extends beyond family dynamics into macroeconomics. French seniors hold the majority of savings but invest conservatively in short-term, low-risk products. The Livret A (tax-free savings account) holds over €350 billion, mostly from older savers. These funds finance public debt but don’t fund innovation or business growth.
Economist André Masson argues this creates a “bad allocation of savings.” Seniors avoid stocks because they can’t afford volatility at their age. Consequently, French startups struggle to find domestic funding, and promising companies list abroad where capital is more available.
The problem compounds when heirs receive conservative portfolios. A 60-year-old inheriting their parents’ bond-heavy portfolio rarely reshuffles into growth assets. The conservative mindset perpetuates across generations, even when recipients have decades to absorb market volatility.
Some suggest tax reforms could redirect this capital. By increasing inheritance taxes on traditional assets while creating incentives for long-term, productive investments, France could channel senior savings into economic growth. The explosion of ETF investing among French savers shows retail investors can embrace modern products when properly motivated.
Generational Perspectives on Advice and Trust
The wealth transfer debate reflects deeper generational divides in financial philosophy. Younger French investors increasingly distrust traditional banking advice, instead turning to online communities for guidance on generational differences in financial advice and investment trust.
This shift matters because inheritance decisions often involve bank-sold products. A parent visiting their conseiller financier (financial advisor) at a traditional bank receives recommendations heavily weighted toward the bank’s own insurance products and funds. These products generate comfortable commissions but may not optimize for the family’s specific situation.
Meanwhile, younger family members research post-PEA investment strategies for young wealth builders and compare fees across platforms. When they inherit, they often discover their parents paid 2-3% annual fees on assurance-vie (life insurance) policies that underperformed simple ETF portfolios costing 0.2% annually.
This trust gap creates friction. Parents trust their long-term banker, children trust their own research and online peer reviews. The inheritance conversation becomes not just about money, but about whose financial worldview prevails.
Actionable Takeaways: What Should You Actually Do?
For parents weighing this decision, the answer isn’t binary. Consider this framework:
If you’re 65-75 with secure pension income:
– Calculate your essential needs (housing, healthcare, basic lifestyle)
– Identify surplus capital you likely won’t need
– Start with small, early donations (lifetime gifts) of €20,000-€30,000 to children facing concrete challenges (home down payment, career training)
– Maintain a “precautionary cushion” of 3-5 years expenses beyond your pension income
If you’re 75+ with health concerns:
– Prioritize your own comfort and care
– Consider that aggressive medical treatments or quality nursing homes cost €3,000-€5,000 monthly
– Discuss openly with children what they realistically expect and need
– Remember that French law already guarantees them a substantial portion, your moral obligation may be less than you think
For children waiting for inheritance:
– Stop waiting. Build your own wealth through financial independence and generational approaches to wealth accumulation
– If you need help now, ask specifically for what you need rather than hinting vaguely
– Offer to pay for professional estate planning as a gift to your parents, it benefits everyone
For families ready to optimize:
– Hire a notaire (notary) for a diagnostic successoral (estate planning review) costing €200-€500
– Explore donation-partage (partitioned lifetime gifts) to crystallize asset values and prevent future disputes
– Review assurance-vie (life insurance) beneficiary designations, many policies still list deceased relatives or outdated preferences
– Consider the Pacte Dutreil (Dutreil pact) if family businesses are involved
The €9 trillion question has no universal answer. But the worst choice is making no choice, letting inertia and cultural taboos drive decisions that could be optimized for everyone’s benefit. France’s inheritance system offers more flexibility than most realize, using it requires the courage to discuss money, death, and family duty openly.
Final thought: The most successful families treat inheritance not as a taboo to avoid, but as a financial project to manage, like buying property or planning retirement. They schedule annual family meetings, update documents regularly, and adapt strategies as circumstances change. In France’s complex system, this proactive approach isn’t just helpful, it’s essential.
