Where there’s a will, there’s a way

A will is a legal document specifying how your property should be distributed after your death. A will does not take effect until your death, so you are free to do what you want with your property until then.
A common misconception is that people believe that if they leave property to a person in a will they cannot dispose of it in their own lifetime.
Understandably the idea of making a will is uncomfortable for many but, as we all know, two things are certain in life, death and taxes. Unfortunately it is often only when people are seriously ill that they consider making a will. However, far more wills are challenged when made in hospital at a time of serious illness than when made in a solicitor’s office.
The law relating to wills in Ireland is governed mainly by the Succession Act 1965 which came into operation and effect on January 1, 1967. A person who dies having made a will is said to have died testate. If you have made a will, your assets are distributed according to your wishes as set out in your will. If not, you will be deemed to have died intestate and your assets will be distributed according to Statute.
There are many benefits to making a will. One of the main reasons for making a will is that it allows the testator to control the distribution of his/her assets after death. Whilst the Succession Act obliges the testator to make provision for a spouse/civil partner (at least 1/3rd of the estate), the testator is otherwise free to dispose of the remaining property as he/she wishes.
If you die intestate, your assets are distributed as per Part IV of the Succession Act 1965. For example, Section 67 (1) of The Succession Act 1965 provides that if a married man or woman dies, without issue (i.e. child/grandchild/great grandchild etc.), the spouse inherits the entire estate.
Section 67 (2) provides that if a married man or woman dies, with issue, the spouse inherits two thirds of the estate and the remaining one third is divided equally between the children. The aforementioned provisions are but a few of the scenarios that The Succession Act 1965 provides.
Until recently, a testator was not legally obliged to make any provision for civil partners or co-habitants. This position has changed as a result of the commencement of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010. A civil partnership consists of a partnership of two persons of the same sex who have registered their partnership under the Civil Partnership Act 2004. Such partners enjoy the same inheritance rights as those enjoyed by spouses.
While cohabitants’ rights are also recognised by the 2010 Act, its provisions in relation to their succession rights are not as far reaching. If deemed to qualify under the Act, a cohabitant has a right to challenge the will of the deceased. The cohabitants must have been in an intimate and committed relationship of cohabitation for a period of either two years or more in circumstances where they are the parents of a dependent child or children, or five years in any other case.
In determining whether the challenge is of merit, the court takes such factors as the financial dependence of the cohabitant of the deceased, whether any of the deceased’s property was previously transferred to the applicant by court order, any bequest was made by the deceased to the applicant and the interests of all other beneficiaries of the estate. However, the court is not obliged to make provision for the cohabitant and therefore the only way to ensure proper provision for a cohabitant is to do so by means of a will.
Another benefit of preparing a will is that it allows you and your beneficiaries to reduce future tax liabilities. Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances. The current rate of CAT is 25% of the taxable value of the gift/inheritance. The tax payable depends on the relationship between you the donor and the donee. When preparing your will, your solicitor can advise you about the implications of same and to what extent your beneficiaries will be liable for tax. Significant reliefs apply to CAT and being aware of the reliefs in advance of your will coming into effect can be financially advantageous to your beneficiaries.
One such relief is agricultural relief. Whilst CAT is still levied on the agricultural property, the relief operates by reducing the value of the property upon which the tax is calculated. In order to qualify for the relief, the beneficiary must meet the definition of a “farmer” and the property must be agricultural property as defined by Capital Acquisitions Tax Consolidation Act 2003.
Your solicitor can advise you in more detail as to the criteria that must be met in order to qualify for the relief. With some advance planning on your part, you can substantially reduce the tax liability of your beneficiaries. Otherwise beneficiaries might find themselves in the position of having to borrow money to pay the tax due.
To conclude, making a will is the only way by which you can control, to a large extent, the distribution of your property and during the preparation of your will, your solicitors can advise you on how best to reduce the tax liabilities of your beneficiaries after your death.
Your wishes, however clearly expressed prior to your death, cannot be implemented if they are not expressed by means of a valid will. Dying without a valid will in place denies you the opportunity to make particular provision for loved ones.
If you are a parent of minor and/or adult children with a disability or special needs, you should consider making a will giving specific instructions as to how they should be cared for after your death. In addition, dying without a will in place can cause upset and financial difficulty to those to whom you have expressed an intention to leave property to in return for their assistance during your lifetime.
Of course you can change your will during the course of your lifetime up until your death and in fact it is advisable that you review your will with your solicitor, particularly in the event of a change of circumstance eg death of a beneficiary or acquisition or disposal of property.
Making and reviewing your will ensures that your wishes are implemented after your death. It also significantly reduces the risk of your estate becoming the subject of a long and bitter dispute between those you have left behind.

Desmond Lynch is a solicitor at Michael Houlihan & Partners in Ennis. Tel 065 6846000.