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Browne Murphy Limerick

Wills for Farmers and Succession Planning

Posted on June 15, 2017 by Browne & Murphy Solicitors

A Will is a document that sets out how you wish your possessions to be distributed after your death and who will look after distributing those possessions.

When you have worked hard all your life to build up your farm and provide for yourself and your family the best way to make sure your property is distributed after your death in accordance with your wishes is to make a Will. If you haven’t made a Will, your estate (including your farm) will then be distributed according to the law. The law is not flexible and will not take into account the needs of your family.We know that it is very hard to make your first Will, but you will find that it is a great relief and peace of mind knowing that your loved ones have been provided for. So, whether you are 24 or 64 now is the right time to make your Will.

If you make no Will your estate will be divided as follows:

Who Benefits
A spouse but no children Your spouse gets your entire estate.
A spouse and children Your spouse gets two-thirds of your estate and the remaining one-third is divided equally among your children. If one of your children has died, that share goes to his/her children.
Children, but no spouse Your estate is divided equally among your children (or their children).
Parents, but no spouse or children: your estate is divided equally between your parents or if only one parent survives your estate is given entirely to one parent.
Brothers and sisters only Your estate is shared equally among them, with the children of a deceased brother or sister taking his/her share.
Nieces and nephews only: Your estate is divided equally among those surviving.
Other relatives only Your estate is divided equally between the nearest equal relationship.
No relatives: Your estate goes to the State.

 

When making your Will it is important to take into account the rights that certain individuals may have under Irish legislation. While you are entitled in your Will to dispose of your assets as you wish, it is important to note and be aware of certain rights that individuals have.

RIGHTS OF A SURVIVING SPOUSE

Where there is a Will

If you have left a Will and provide for your spouse in your Will it is important that you are aware that your spouse is entitled to what is called a “legal right share” of your estate. In simple terms a surviving spouses legal right share is:

  • One-half of your entire estate if you do not have children
  • One-third of your entire estate if you do have children

Your spouse can choose to take either what you have left them under your Will or his/her legal right share. Therefore, if you do not leave anything to your spouse in your Will, your spouse can elect to take their legal right share of your estate. There are strict time frames that a spouse must comply with when exercising their option to take under the Will or their legal right share. Contact our office to discuss the matter in further detail.

Where there is no Will

The rules of intestacy apply.

If you are Survived by:
A spouse but no children Your spouse gets your entire estate.
A spouse and children Your spouse gets two-thirds of your estate and the remaining one-third is divided equally among your children. If one of your children has died, that share goes to his/her children.

The Civil Partnership Act 2010

The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (the “Act”) came into effect from the 1st January 2011. This Act brought about substantial amendments to the Succession Act 1965 where civil partners are given similar rights to that of a surviving spouse.

The Act, which came into effect from the 1st January 2011, brought in rights for cohabiting couples in long term relationships, whether same sex or opposite sex relationships.

A cohabitant is defined in the Act as “one of two adults (whether of the same or opposite sex) who live together as a couple in an intimate and committed relationship and who are not related to each other within prohibited degrees of relationship or married to each other or civil partners of each other”. For a cohabitant to be a qualified co-habitant certain conditions need to be complied with.

Note: a cohabiting couple does not have the same legal rights as married couples or civil partners in Irish Law.

There is no automatic right of a cohabitant to a share of a deceased co habitants estate unlike that of a surviving spouse or civil partner. The Act introduced a right to redress  which provides that a cohabitant can apply to the Courts for provision. The Act also allows for a cohabitant to apply to court for a variety of orders where the relationship ends due to a break up or death after the 1st January 2011.

A cohabitant who applies for provision to be made for them from the Estate of a deceased cohabitant, and succeeds, can obtain a benefit from a tax point of view . It is important to note that any application must be made within six months of the date of the Grant of Probate/Administration.

RIGHTS OF CHILDREN UNDER A WILL

A child does not have any absolute right to inherit their parent’s estate under a parent’s Will. Where a child or children have been excluded under a parents will, it is possible to make an application to court if they feel that they have not been adequately provided for under he Will or otherwise by their parents. This is what is referred to as a section 117 application. Where one parent passes away and leaves all of the estate to their spouse, a child cannot make an application in this situation. If you are considering such an application it is important that you seek legal advice from a firm of solicitors with experience in this area. Browne & Murphy Solicitors have over 10 years experience in the area. Contact us directly for further information on what rights you may have. You should note that such an application must be made within 6 months of the taking out of a Grant of Probate.

If you die without a Will you are said to have died ‘intestate’. If you die intestate this means your estate is distributed in accordance with the law. The Rules of Intestacy are not flexible and don’t take into account what your wishes would be. After your debts and funeral expenses are deducted, the rules of intestacy sets out that your estate is distributed in the following way.

If you are survived by:

Who Benefits Who Administers your Estate
A spouse/civil partner but no children Your spouse/civil partner gets your entire estate. Your spouse/civil partner
A spouse/civil partner and children Your spouse/civil partner gets two-thirds of your estate and the remaining one-third is divided equally among your children. If one of your children has died, that share goes to his/her children. Your spouse/civil partner is entitled to administer your estate, if they do notwant to administer your estate, then any your children (over the age of 18 years) are entitled to administer of your estate.
Children, but no spouse/civil partner Your estate is divided equally among your children (or their children). Each child (over the age of 18) is entitled to apply to administer your estate.
Parents, but no spouse/civil partner or children: your estate is divided equally between your parents or if only one parent survives your estate is given entirely to one parent. Both or one of your parents is entitled to administer your estate.
Brothers and sisters only Your estate is shared equally among them, with the children of a deceased brother or sister taking his/her share. One or brother or sister
Nieces and nephews only: Your estate is divided equally among those surviving. One or all nieces and nephews
Other relatives only Your estate is divided equally between the nearest equal relationship. One or all
No relatives: Your estate goes to the State.

When making your Will you should consider Inheritance Tax

Inheritance tax is a tax which can arise where you leave a gift or a share of your estate to someone in your Will. The person receiving the inheritance is the person responsible for paying the tax.

Note: an inheritance from your husband or wife is not liable to inheritance tax.

If you leave property by Will to someone other than a spouse then they may be liable to the pay inheritance tax. Inheritance tax may arise when a person receives an inheritance that exceeds their threshold.  A threshold is the amount a beneficiary is allowed receive without having to pay tax. A person’s threshold is determined by your relationship to the person from whom you are receiving your inheritance. Different tax thresholds apply depending on the relationship between the deceased person and the beneficiary. Amounts of inheritance received above the threshold amount is liable to tax at 33%.

In calculating if a person will pay inheritance tax you need to also take into account, if a person has received other gifts or inheritances since 5 December 1991. If they have previously received a gift/inheritance which result in their entitle threshold been used up and any gift you now give them in your Will, will be liable to 33 % tax.

There are certain inheritance tax reliefs available which may apply to beneficiaries in your Will. Each of the relief’s are dealt with in detail in the inheritance section of our website.

  • Business Relief;
  • Agricultural Relief;
  • Dwelling House Relief;
  • Favourite Nephew/Niece relief;
  • Relief for a Minor Child of a Deceased Child.
  • Heritage Property & Heritage Property of Companies.

As specialist solicitors in Wills and Probate we have the experience and expertise to advise you in all aspects of making your Will, including inheritance tax considerations. if you would like to discuss any aspect of making a Will, please contact us to arrange a convenient appointment.


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