Author Archives: Colm Kelly

When you are making your will, and you are giving a gift to a child, you should think about, what would happen if your child died before you.  Nobody want’s to consider this in will drafting but it is unfortunately something that one must take into account.  In that case one of your options is to say that “The gift that was going to pass to my child will now pass to his or her spouse”.  You certainly have the option of leaving an inheritance that way.

We call the person who makes a will the “testator”.  There may be lots of reasons why the testator would make a will in that way.  They may have a very close relationship with their son or daughter in law.  They may have appreciated the help that a son or daughter in law has given them over time.  The testator may wish funds to go into the hands of a son or daughter in law because they know that they will use that inheritance for their own good and the good of their children (ie the testator’s grandchildren).

There is one very important tax advantage as to why a testator may wish to do this.  That is because there is a special tax relief that applies in these cases.  A child can inherit up to €335,000* from a parent.  A son or daughter in law, is not a child and can only inherit up to €16,250 tax free from their parents in law.  However due to provisions in the tax code, an “in-law” steps “into the shoes” of their deceased spouse and is treated for tax purposes as the child of the testator.  So the spouse can take the inheritance with the benefit of a generous tax provision.

Many people when making their will don’t often think of what would happen if their child passed away before them.  However many would also be happy for funds to pass to a surviving spouse.  In other cases it can work the other way and a testator would baulk at the thought of leaving an inheritance to an “in law”.  The main point is that this needs to be catered for in a will, that the testator is in control and can decide and that there are tax benefits in place for a testator who does leave assets to an an “in-law”.

Hope that helps and if you have any will drafting queries please reach out to me at info@kerrywills.ie.  Colm Kelly

• Note.  * Tax figures are given as of June 2024.  They may change over time

In a previous post (see link below) we talked about what happens if a beneficiary dies before you.  This is just a short note letting you know that it is normal when will drafting to cater for this circumstance.  When you make your will, you are naturally thinking about what will happen to your assets when you die.  You don’t normally think about what will happen in the event that some of your beneficiaries die before you.  That is regularly the case with those who makes wills.  However, you should cater for the situation of your beneficiaries dying before you.

In this blog we are focusing on if you are a parent and you have children

So what are your options?

If your beneficiary is your child, then you have a range of options to cater for a child passing away before you.

Option 1.  The gift you were giving to that child passes to your child’s spouse

Option 2.  The gift you were giving to your child passes into his or her estate.  That means, it will be dealt with as part of the residue of the child’s estate.  If the child made a will, it will be dealt with under the terms of the residue clause of the will.  If the child made no will, it will pass in accordance to set rules known as the rules on intestacy.

Option 3. The gift you were giving to your child lapses and so falls into the residue (see article below which talks about this)

Option 4. The gift passes to your other children

Option 5.  The gift passes to your grandchildren.

It very much depends on what you want to do.  The great thing is, is that you get to choose.  So taking time to consider this matter puts you in control.

If you have any will drafting or issues regarding capacity, then please reach out to me Colm Kelly solicitor at info@kerrywills.ie

Here is a link to the previous post

 

What happens if a beneficiary dies before me?

Often times when a person makes a will they are just thinking, naturally, of what happens on their own death.  However, when making a will, it is always advisable to think about what happens if a person dies before you.  The law states that if a person dies before you, the intended gift goes to those that were getting the balance of the estate.  In a will, you leave certain assets to certain individuals.  Then, you will have a final catch all clause in your will that captures any assets that might not have been mentioned previously.  We call this a “residue” clause.  That is because it deals with the residue or balance of your estate.  If a person dies before lawyers say that the benefit falls into the residue.  There is one exception to this.  If the person that dies before you, is a child, and that child has children when you die, then, the gift to that child does not fall into the residue but rather goes to the estate of that child.

We give an example

Sean makes his will where he leaves his house to his daughter Mary.  Mary dies before Sean, but at the time of Mary’s death she had three children.  Sean then dies.   Mary’s children are still alive.  In this case, the bequest of the house does not fall into the residue but passes to Mary’s estate.  If Mary made a will, then the house from Sean is treated as if Mary owned it when she died and it will pass in accordance with the terms of her will.

When a beneficiary dies before a person who made the will, we say that their gift lapses.  The consequences that we mentioned above then occur, but there are ways to tailor your will to deal with this.  We call this drafting a gift over clause and it will be the subject of next weeks blog.