If your child dies before you – giving that gift to his or her spouse

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