Monaco: To What Extent Can A Gift Be Considered A Customary Present?

In the absence of a definition by the Monegasque Courts, the definition of a customary present is given by the neighbouring country's Court of Cassation, which defines them as "gifts made on the occasion of certain events, in accordance with custom, and not exceeding a certain value" (Court of Cassation, 1st Civil Chamber, 6 December 1988).

Thus, a customary present is only a special case of a gift by hand.

A gift by hand is a liberality inter vivos that is made by simply handing over an item of property, known as a tradition, which in itself characterises its existence.

Consequently, a gift by hand made by tradition is lawful.

The exception to the general regime for donations inter vivos only concerns the form of the donation.

On the merits, gift by hand is subject to the common regime for donations inter vivos.

It is therefore easy to understand the advantage of making a gift by hand, which is that it is to avoid the binding rules governing donations inter vivos.

However, it is important to know how to identify a customary present, a specific gift by hand, which in practice takes the form of a gift.

For a gift to qualify as a customary present, two conditions are generally required.

There must be a custom by virtue of which the gift is given and which constitutes the reason for it, but it is also necessary that the value of the gift is not excessive in relation to the social situation of the donor or donors.

In view of the increasingly obvious practical interest in the concept of a customary present, it seems interesting to analyse the two characteristics required, namely the circumstances which constitute the use justifying its attribution (I), as well as the relative modesty of the gift (II), before examining the interests in granting a customary present (III).

I. The gift must be made on the occasion of an event where it is customary to offer a gift

The only condition laid down by article 721 of the Civil Code for a gift to qualify as a customary present is that it must be made subject to use.

This reference to usage makes it possible to rule out gifts that are not linked to any specific event: anyone can make a gift without obeying any usage.

Thus, case law sometimes refers to "a precise cause tending to a social or family usage" (Court of Revision, 7 October 1991), or a "precise cause relating, in particular, to an event or a custom of a social or family nature" (Court of First Instance, 22 October 1987).

In short, it may be acceptable for the gift to be made on the occasion of an event where it is customary to offer a gift, such as a birthday, wedding, civil or religious holiday, passing an exam, the birth of a child, etc.

A gift given outside an event where it is customary in society cannot be qualified as a customary present (Court of Revision, 7 October 1991).

II. The gift must be proportionate to the donor's wealth

The nature of the gift and its value as such are irrelevant.

However, in order to be considered as a customary present, the value of the gift must be assessed in relation to the donor's abilities and not those of the donee (Cour de Révision, 7 October 1991).

Thus, for example, sums of US$5,700,000 and US$3,000,000 do not constitute customary present having regard to the assets of the disposing party (Court of Revision, 26 March 2015).

Case law assesses the wealth of the parties by emphasising their "respective faculties" or their "social and pecuniary situation".

What matters above all is that the gift is in keeping with the donor's wealth and lifestyle.

It should simply be stated in principle that a customary present does not constitute a liberality when it is in relation to the donor's faculties and that it does constitute a liberality when it exceeds their normal resources.

Unfortunately, there are no rules in this area, with Monegasque Judges making a sovereign assessment of the nature of the gift on a case-by-case basis, taking into account all the factual circumstances surrounding the gift.

III. The interests of the customary present

Making a customary present can be a way of advantaging a close relative (a), enable him or her to escape the situations in which donations can be revoked (b), and enable a person who does not have the capacity to dispose of his or her property to do so (c).

a) Advantaging a close relative

Article 712 of the Civil Code states that any heir to an estate must report to their fellow heirs everything he has received from the deceased.

This rule applies to gifts by hand.

It is intended to ensure equality between heirs, an equality that is de jure in the Principality of Monaco (see a previous article on "The restitution of the fruits of reducible donations", dated 22 June 2023).

Article 721 of the Civil Code, on the other hand, stipulates that customary presents do not have to be reported.

Thus, the distinction between a gift by hand and a customary present is important in civil matters, since the former will be reportable to the estate of the person making it, whereas the latter will not.

Therefore, as a customary present is not reportable to the estate, or reunited, it can be used to advantage a close relative, thereby avoiding the principle of equality that must exist between heirs, which is in force in the Principality of Monaco.

b) Escaping the possibilities of donations revocation

Escaping the rules governing donations inter vivos, a customary present is not subject to revocation on grounds of ingratitude or the birth of a child, or to the rules governing the fate of donations in the event of divorce or legal separation.

Indeed, in a ruling dated 7 October 1991, the Court of Revision accepted that customary presents cannot be revoked on the grounds of the birth of a child, as provided for in article 827 of the Civil Code.

c) Enabling everyone to dispose of their property

As a customary present is not subject to the status of liberalities, it should also be exempt, as has been accepted in the neighbouring country, from the provisions of Article 771 of the Civil Code, which prohibits a minor under the age of sixteen from disposing of property.

Thus, customary presents could be validly granted not only by the minor themself, but also in their name, by their legal representative.

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In the light of these developments, it is useful to note that an act that may seem insignificant, such as offering a gift, can have unsuspected legal consequences for an uninitiated person, but which, depending on the circumstances, may be of particular interest.

This situation demonstrates the need, in inheritance matters, to seek the assistance of specialist advisers, in order to get the best out of it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.