Making a Will

“Where there’s a will, there’s a way…”

Indeed there is. A will, quite simply, gives you a way to have control over all your assets once you die. Where there is no will, there is no way, other than as set out in legislation. In other words, you have no control as to what happens to your assets once you die should you have failed to make a valid will in your lifetime.

Why should I make a will?

There are a number of reasons for making a will, but the main reason is that it gives you complete control of what happens to your assets on the event of your death. It can ensure proper arrangements are made for your loved ones and dependents. It can also minimise expenses, taxes and family friction. On consultation with your solicitor, you can make your will in the most tax efficient way possible. It safeguards the future of those you care about and will give you peace of mind that all your affairs are in order. If you have children, it can also provide for legal guardianship and the appointment of trustees in the event of your demise.

What happens if I die without making a will or my will is invalid?

If you die without having made a will, or your will is invalid, your property is strictly dispersed according to the law on intestacy. You fail to retain any control over who is entitled to your assets, who has care of your children or runs your business or farm. People, other than your direct family, will not receive anything and members of your family may not receive what you would have wanted them to. It can
lead to a number of people owning one asset, for example a farm or business where disputes can arise and the asset has to be sold.

If you die without making a will, or a will you make yourself is declared invalid, the following scenarios will apply after all your debts, testamentary and funeral expenses are paid:-

• Where you are survived by a spouse but no children/grandchildren: your spouse gets the entire Estate.
• Where you are survived by a spouse and children: your spouse gets two thirds of your Estate and the remaining one third of your Estate is divided equally amongst your children; or if any of your children has died leaving a child or children (ie your grandchild/ren), the share of that child goes to the grandchild/ren.
• Where you are survived by your parent or parents only (i.e. you have no spouse or children): your Estate is divided equally between your parents, or if there is only one parent surviving, that parent takes your entire Estate.
• Where you are survived by brothers and sisters only, your Estate is shared equally amongst them. If any of them are deceased, their share goes to their child or children.
• If you are survived by nieces and nephews only, your Estate is divided equally among those surviving
• If you leave none of the above surviving, your Estate is then divided equally between those closest related to you
• Finally, if you die with no relatives surviving (or relatives that cannot be ascertained or traced), your Estate goes to the State

The above rules are very strict, and therefore dying without making a will (dying “intestate”) means your Estate is divided according to the above eventualities. So if you wanted to leave specific items or money to persons who are not related to you, or to a charity, it would not be possible unless you made a valid will. Similarly if you wanted to leave specific items to persons in your family, again this is not possible without making a will.

Can I do what I want when making my will?

Everyone has freedom to dispose of their assets as they see fit. However, when you are married, there are certain legal obligations that you have to fulfil in terms of your will under the Succession Act. This is known as the “Legal Right Share” and is a statutory entitlement, once the surviving spouse has not renounced or given up his/her rights to your Estate, or is “unworthy to succeed” in legal terms. (Unworthiness to succeed is very rare, and usually only occurs in cases of murder of the dead spouse or desertion for a specific period of time).

The Legal Right Share of any spouse is one half of the entire Estate if you have no children, and is one third of your entire Estate if the deceased had children. The surviving spouse also has the extended right to choose to take the family home in part or full fulfilment of their Legal Right Share.

There are no provisions under the Succession Act that you have to leave a “legal right share” or any equivalent to your children under your will. However, within a very strict time period after the date of death, any child can apply to the Court under s117 of the Succession Act where they feel that they have not been provided for adequately during their lifetime, and a parent has failed in his or her moral duty to the child. The Court will look at all the provisions made during a deceased’s lifetime for that child. Please note that any such “child” includes a marital or non marital child, or an adopted child. Step children do not have Succession Act rights, but they do enjoy the same tax status as a blood child of the deceased. Foster children do not have Succession Act rights either, but in certain cases they can be granted equal tax status as a child of the deceased.

Can I change my will or make a new one?

Of course. You can change or alter your will right up to the date of death, unless of course you do not have the mental capacity to make a will.

To make a will you need to be of sound mind. If there is any doubt as to this, any will you make while you are deemed to be of unsound mind, or mentally incapable will be deemed invalid, and your Estate would be then divided according to the Rules of Intestacy, (or per your last valid will). Your medical doctor can provide the necessary supporting documentation in this regard should same be required. It is important that wills are reviewed every few years to take any family circumstances or tax changes into account.  If you wish to make minor amendments to your existing will, this can be attended to by way of a codicil.

Tax planning

Making a will gives you the opportunity to avail of substantial tax advantages should you avail of professional advice. The taxes payable by many beneficiaries can be considerable and the procurement of tax planning advice is intended to maximise the benefit to your intended beneficiaries and can result in a considerable monetary saving in certain circumstances. Capital Acquisition Tax (CAT) is payable on inheritance at a current rate of 25%.

Group Relationship  Current Group Threshold

2011
A Son/Daughter €332,084
B Parent*/Brother/Sister/
Niece/Nephew/Grandchild €33,208
C Relationship other than Group A or B €16,604
*In certain circumstances a parent taking an inheritance from a child can qualify for Group A threshold.
Also there are a number of CAT/tax reliefs that can be claimed under certain circumstances such as ‘Business Relief’, ‘Dwellinghouse Relief’ and ‘Agricultural Relief’. Certain conditions must be met to avail of these reliefs. A meeting with your accountant or tax advisor before making a will with your Solicitor leaves you best placed to plan the distribution of your assets in the most tax efficiently manner possible.
Remember, there no longer is CAT payable between spouses. More information on CAT can be obtained from the Revenue Website.
I own property jointly and have joint assets. What happens to these joint assets after I die?
All assets held jointly pass outside of the will. For example, if you own your home jointly with your spouse, it automatically passes to them, regardless of anything to the contrary in your will.
If it is your intention that your spouse will get all your assets, it can be worthwhile to consider the benefits of transferring them into your joint names before your death. This will allow for a smooth transfer or continuation of your business after your death, and there may not be any need to apply for a Grant of Probate. This can also apply to owing joint property with someone other than your spouse also.
Joint bank accounts, where they are not held with your spouse can cause difficulties and usually we have to look to the reasons behind the joint ownership (e.g. second name on the account to facilitate easy withdrawal of funds etc.)
What about Foreign Assets and Foreign wills?
If you own assets abroad, (for example an apartment in Spain), you have probably already made a foreign will on the advices of your lawyer in the country where the asset is held. A Grant of Probate or equivalent will most likely be required to be taken in the country where the assets are located. Making a foreign will in respect of those assets will ensure a smooth process when applying for a Grant of Probate. Legal advice should always be taken in the country where the asset is held. However, you need to be careful that your foreign will does not revoke any will you have made in Ireland.

What about the new Civil Partnership Act?
The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 was recently signed into law. Succession Rights for Civil Partners, as well as other rights for cohabitants have been created. We hope to have a full update on the Act and its implications in our next newsletter.
And finally…
Did you know that 3,954 people died owning assets in 2009 without making a will? Making a will is a very straightforward procedure. If you would like to discuss making your will, please do not hesitate to contact us to arrange an appointment in our Sandyford offices. You can give us a call, or contact us via our enquiry page.