We have been looking at various aspects of will drafting and in particular the issue of what happens if a beneficiary dies before you. This blog relates to the situation of drafting a will catering for your children dying before you. One of the options available to a person in drafting a will in these cases is providing that the inheritance which they intended giving to their children that they would give that instead to the children of that child (ie their grandchildren through that child).
This is quite a normal route that people making a will opt for if the question of a child pre-deceasing them is presented to them during a will consultation. Obviously, no parent wishes to contemplate their child dying before them, but provision does need to be made for this unfortunate circumstance. Where a person drafting a will takes this option there are two points to note:-
- There is a generous tax regime in place to cater this circumstance. Normally a grandchild can only take €32,500 * tax free from their grandparents. However where a grandchild is under 18 and receiving a payment from their grandparent which arises because their parent is deceased, then the grandchild can take up to €335,000* tax free.
- If it is the case that a child pre-deceases their parent and the inheritance passes to the granchildren, it may well be the case that such granchildren are under 18 when they receive that inheritance. A person cannot hold property unless they are over 18. Therefore it is normal to create a trust in a will to cater for this. So the inheritance which is going to the granchild will be held on trust for them until their 18. As the parent of the child is deceased, it is normal that the trustee will be the child’s surviving parent or guardian or another trustee nominated in the will.
It is normal that a person making their will, will want to try and keep the asset in the family. One of the most tried and trusted ways of doing this is to pass assets down to grandchildren in cases where a child dies before them. This option is adopted by persons drafting wills in the vast majority of cases.
Hope this is of assistance and if you require any will drafting tips or assistance please contact me on info@kerrywills.ie. Colm Kelly
* As at the time of writing (June 2024), tax rates may change in the future