How to prevent your death causing financial calamity and feuds.
Gabrielle Monaghan
The Sunday Independent
7th April 2024
The late Maeve Binchy was a big believer in wills, with the best-selling author once revealing she’d made one “every year since I was 21”. She even kept track of possessions her friends admired so she could pass them on to them after she died.
When Binchy’s last will and testament was filed in Dublin’s probate office in 2014 – two years after the Circle of Friends novelist died – it showed she’d lived up to promises to be generous to her own circle of friends: one-third of her €10m fortune was split between relatives and a group of 18 friends, charities and other organisations.
But not every Irish person is as diligent about making and updating a will as Binchy was. Indeed, almost six out of 10 of us do not have a signed and witnessed will in place, a 2021 survey by Royal London Ireland found.
The absence of a will, or an ill-considered or poorly communicated will, often triggers lifelong family rifts, even when small amounts of property or land are at stake. Warring siblings can spend years and small fortunes in legal fees on fighting each other in court.
The following are some of the biggest mistakes Irish people make when it comes to wills and the steps you can take to avoid leaving feuds and financial calamity behind after you die.
1 Not making a will at all
One of the biggest mistakes you can make when it comes to wills is not writing one at all. No one likes to consider their mortality, but as the old adage goes, death and taxes are the only certainties in life.
If you don’t express your wishes in a will and you die ‘intestate’, then the terms of the 1965 Succession Act will come into play. The rules of intestacy will determine how your estate will be distributed, which could mean your assets might not be divided in the way you’d have liked.
“Make a will whatever you do because the implications of not doing so are massive,” says Mark O’Sullivan, managing director of Provest Private Clients.
“They say, ‘where there’s a will, there’s a relative’. But where there’s no will, there’s fighting. It does create problems because people might have an expectation of assets coming their way and it could end up court. In some cases, it could mean people never speaking to each other again.”
If you’re married with children and you die intestate, your spouse will be given two-thirds of your estate and the remaining third will be split equally between your offspring. If your main asset is the family home, there’s a risk your children could take legal action to compel your spouse to sell their share of the property so they can cash out their one-third share.
If you die without a will and are legally separated from your spouse, your estranged partner could still be entitled to a share of your house, unless succession rights were waived as part of a separation agreement or extinguished by a court order. A divorced spouse can also apply to the courts for a share of the deceased spouse’s estate in certain circumstances.
However, “a divorce doesn’t revoke a will, so if you have one, you’d need to make a new one,” says Elaine Byrne, a solicitor who specialises in wills and probate. “You could be on bad terms with your ex and they could still walk away with a lot. Sometimes people go through a separation or divorce without using a solicitor who would tell them this.”
2 Failing to consider inheritance tax
Inheritance tax planning is not something only the wealthy need to consider when making a will. If you leave your home and, say, your savings to someone other than your spouse or civil partner, that beneficiary could be liable to capital acquisitions tax (CAT) of 33pc on the value of these assets. This means they may have to sell the family home or take out a loan to pay the tax.
The CAT threshold for a child is just €335,000. If, for example, you left a child the family home and it is worth €500,000 – the average price of a three-bed semi in Dublin – they would be liable to pay €54,450 in inheritance tax.
“Many people don’t think about the tax implications at all when they’re thinking about who they’d like to leave their assets to,” O’Sullivan says.
Rather than simply leaving everything to your children, you could include your grandchildren and sons-in-law or daughters-in-law to use up all of their tax-free thresholds, says Andrea McNamara, head of private client law at EY Law Ireland, who specialises in wills and trusts.
3 Not providing for a life partner
It’s especially crucial to have a will if you have a long-term partner but are not married. If you die intestate, this could cause huge financial difficulty for your surviving partner, who would have no automatic right to a share of your estate. If you didn’t provide for your partner in a will and they were financially dependent on you, they might have to apply to the courts to seek provision from your estate.
4 Not reviewing your will
People often make a will when they buy their first home but may never review it again. However, people will come in and out of your life after you make a will and many life stages necessitate changes to your will.
“None of us knows when we’re going to die but you should make a will on the basis that you may pass away in the next three to five years and then review it regularly,” McNamara says. “When you have children, for example, you’ll need to update it so you can appoint guardians and trustees for them and to make sure their inheritance is structured appropriately.”
You don’t need to make a will if you’re getting married for the first time because marriage revokes a will, unless the will was made in contemplation of marriage.
5 Poor communication
Irish families can be secretive about their wills, or make promises of land, houses or cash that they have no intention of fulfilling. Many disputes over an inheritance could be avoided if parents just discussed the content of their wills with their families while they are alive, unless a parent is vulnerable and under pressure from a child, Byrne says.
O’Sullivan says: “A client made a will but had changed it about three times in the previous five years and didn’t communicate the changes to his kids. The result is three kids at loggerheads with another party who got a small piece of the estate.
“They each received a substantial amount of money but because the dad didn’t communicate the change in his wishes, they are going to the High Court and spending a lot of money on legal fees.”
Enduring Power of Attorney vital if you lose the ability to make decisions
Just as important as making a will is appointing someone you trust to act on your behalf should you lose the capacity to make certain decisions in the future due to – for example – infirmity, dementia, or becoming incapacitated by a stroke or accident.
A legal device called Enduring Power of Attorney (EPA) will enable you to task an ‘attorney’ (they don’t need to be a lawyer) with managing your finances, property and making decisions for you. You can grant the ‘attorney’ power, for instance, to sell your property, pay your debts and taxes, and do your banking.
When the Assisted Decision Making (Capacity) Act was fully begun in April 2023, it introduced different levels of decision-making assistance for people, replacing the old system that made people a ward of the court.
Theoretically, you can make and register an EPA without the need for a solicitor to prepare the application, through the new Decision Support Service. But the document creating the EPA must include a statement from a solicitor or barrister that they’re satisfied you understood the implications of the EPA and that you weren’t acting under undue influence.
Some legal practitioners say that few solicitors are getting involved with EPAs because they’re waiting for some issues with the new system to be ironed out.
“If someone has done an EPA themselves but you, as a solicitor, haven’t gone through the steps of creating the EPA, there’s a worry about professional indemnity insurance,” Byrne says.