A will question

Pa88y

Help settle a debate please. A father makes a will leaving the family home to his wife and then upon her death to 2 of his sons.

I contend that if the father dies and the house goes to the mother that she can then make her own will leaving the house to whomever she likes and that that will supersedes the fathers will.

He says the fathers will takes precedence no matter what the mother writes in her will.

Who's right.

Peregrinus

Up to 2009, it was possible to transfer or bequeath a "life estate" in land. So Husband could leave the house to Wife for her life, with remainder over to Sons jointly.

In that scenario, Wife would only have a life estate in the house, so that's all she could sell or give away. She could sell or transfer her interest to, say, Pa88y, but all Pa88y would get would be ownership of the house until Wife died, at which point the life estate based on Wife's life would come to an end, and Sons would become joint owners of the house. Obviously, Pa88y wouldn't be interested in paying much or anything for such a limited ownership of the House, so Wife's interest was not in practice saleable. Wife and Sons together could sell the house outright, if they were all in agreement to do that.

The law was changed in 2009 and you can no longer create a life estate in property in Ireland. What Husband can now do is make a Will leaving the house to Sons jointly, but subject to a right of residence for Wife for her life. Wife doesn't own the house but she has the right to live in it, rent-free, for as long as she lives. She can't sell or transfer her right of residence to anyone. Sons can't in practice sell the house subject to Wife's right to live in it (who would pay money for that?) so, again, the practical way to sell the house is for Wife and Sons to agree - Wife surrenders her right of residence so that the house can be sold, in return for which she gets a cut of the sale proceeds.

Pa88y

The will was made as above. I leave my house to 'wife' and upon her death the house passes to joint ownership of 'son1' and 'son2' and cannot be sold unless both agree.

From what you say this is not possible now.

Peregrinus

When was the will made?

And when did the father die?

Pa88y

The will was made earlier this year and he's still alive.

awsah

No she only has a life interest in the house and cannot sell it. If the house is in joint names then that part of the Will will fail because she will get it automatically get it on his death.

awsah

https://www.boards.ie/discussion/comment/118184060#Comment_118184060

This is incorrect, you can still make a life interest.

or you can do what you say also but it is perfectly acceptable to write to my wife for life and remainder to my two sons as joint tenants

Peregrinus

https://www.boards.ie/discussion/comment/118200073#Comment_118200073

It's perfectly acceptable. But what will actually happen is that a statutory trust will be created on your death, with the house held by the executor on trust to provide the wife the use of the house for her life, and then to transfer it to the two sons.

Since that's what's going to happen, a competent drafter will draft the will to say that's what is to happen, so as to avoid confusing or disappointing the beneficiaries. But of course there are plenty of wills out there drafted before 2009 and attempting to create a life estate, and when those testators day what will actually happen is a statutory trust in favour of the life tenant.

awsah

https://www.boards.ie/discussion/comment/118209087#Comment_118209087

Can you tell me what part of the 2009 act mentions that? You said about that the wife could sell her interest in the house but if it's held in a trust then she would not be able to do anything with it.

The answer to OPS question is that the wife would not be able to sell the property or leave it in her will and an executor would be able to explain that on death. I have never seen a will worded with "statutory trust", im not saying its not done, but it's not needed.

Peregrinus

Land And Conveyancing Law Reform Act 2009 s. 11 is the provision which prevents the creation of a life estate in land. Subsection (6) has the effect that an attempt to create a life estate will result in the creation of an equitable life interest only. S. 18 of the Act operates to create a trust of the land, and s. 19 identifies the trustee who, when you work through it, has the effect in this scenario that the trustee will be the executor.

At least, that's how I read it. Happy to defer to anybody with more experience and/or expertise.

As for the wife selling her interest, as pointed out earlier it was in practice unsaleable anyway - who would buy it? Now that it's a purely equitable interest she can still in theory sell it - there is nothing to stop someone buying a purely equitable interest in land - but, as before, it's very unlikely that she could find anyone willing to buy it. (Unless they were also buying the remainder from the remainderman, of course.)

A will wouldn't be word with a "statutory trust"; the whole point about the statutory trust is that it's created by the statute, not by any instrument. But if client came into a solicitor and said "I want to make a will leaving my house to my wife for her life, with remainder over to our children in equal shares", I'd explain why what he wants can no longer be done, and - subject to instructions - draw up a will leaving the house upon trust for the wife for her life and thereafter for the children in equal shares absolutely. And I'd point out the continuing role for (and obligations of) the trustee in this scenario and I'd worry about my professional indemnity insurance if I let the client walk out not understanding this.

Claw Hammer

What about the wife's legal right share?

Peregrinus

https://www.boards.ie/discussion/comment/118210418#Comment_118210418

Not really relevant in the present context. It will never operate to give her a life interest in a particular property in the estate.

If whatever is left to her in the will is less valuable than her legal right, she can refuse to accept the bequest and instead assert her legal right. But this will be true regardless of what is left to her in the will, and regardless of whether it is, or purports to be, a life interest in property, or something else.

Claw Hammer

https://www.boards.ie/discussion/comment/118214141#Comment_118214141

The surviving spouse or civil partner may ask to keep the family or shared home instead of their legal right share, although if the house is worth more than the legal right share, the spouse or civil partner may have to pay the difference into the deceased's estate. A court may decide that this sum does not have to be paid if it would cause undue hardship

LawBoy2018

https://www.boards.ie/discussion/comment/118214141#Comment_118214141

I don't get this.. Why would she want or need a life interest in the family home when she's already a co-owner? Or am I missing something?

In the OP's hypothetical scenario, the father died, he bequeathed his share of the family home to his wife and he presumably expressed his wish somewhere in his will for the family home to ultimately be passed down to both sons upon the death of their mother. If that were to be the case, surely she would be able to dispose of the property however she saw fit, despite her late husband's wishes?

Peregrinus

https://www.boards.ie/discussion/comment/118217623#Comment_118217623

That's not what the OP says. Per the OP the house is bequeathed to the wife for her life, and thereafter to the two sons as (I'm guessing) tenants in common.

The title of the property has been divided into two - a life estate, of which the wife is the sole owner, and the remainder, of which the two sons are co-owners.

As I said, I think the wife's legal right is a bit of a red herring in this context, but just to fabricate an example where it might be relevant:

Suppose the family home (full title, vacant possession, on the open market) is worth €1 million. The life estate left to the wife is obviously worth considerably less than that. The value that would be put on it will depend on her age - the older she is, the less an estate for the duration of her life is worth - but, picking a figure out of the air, let's say €100k. Suppose the husband has left her nothing else in the will, the miserable bastard.

And suppose the husband's entire estate is worth €10 million. And the whole of the rest of the estate is left to the two sons in equal shares.

The wife has a legal right, if she asserts it, to a one-third share in the estate - €3.3 million. That's obviously vastly greater than the value of what she has been left in the will, so she might decide to assert her legal right.

If she does, in general it's up to the executor to select which assets to give her out of the estate to make up a total inheritance of €3.3 million, but if the house in question is the house in which the wife was ordinarily living at the time of the deceased's death then she can require the executor to include the house as part of her legal right. In that case case she becomes outright owner and the sons will never get the house (unless she later gives, sells or bequeaths it to them).

LawBoy2018

https://www.boards.ie/discussion/comment/118219014#Comment_118219014

Thanks for the well explained response, your posts on here are great! I see where the confusion lies, I mistakenly assumed that the couple were joint-owners of the property, rather than the property being in the sole name of the husband, which seems to be the case here.

Peregrinus

https://www.boards.ie/discussion/comment/118220326#Comment_118220326

Where a married couple are joint owners of the family home in which they both live, it's almost invariably the case that they hold it as joint tenants, rather than as tenants in common. One of the consequences of holding the property as joint tenants is that, when the first of them dies, the property automatically becomes the sole property of the other (the "right of survivorship"). In such a case the house will never form part of the deceased spouse's estate, and they cannot dispose of their share in the house by will.

You can have a case where husband and wife hold property as tenants in common - it's rare, but not unknown. If this is a second marriage for one or both parties, and one or both of them already have children from their earlier marriages, they might decide to keep their assets separate so that each can leave their property to their children, so in a case like that they might buy a shared home as tenants in common.

In that case, if husband died his share in the property forms part of his estate, and he can dispose of it by will. Surviving wife's share is unaffected. So if the couple had jointly own the house as tenants in common the husband could have made a will leaving his share to his wife for her life, thereafter to his children. Wife would leave her share to her children and, on her death, the house would be sold and the proceeds divided between the two families. But that would be an unusual circumstance, and if that was what had happened here you'd expect the OP to make that clear.

So, no. I think this house was owned outright by the husband, and his will dealt with the whole of the house, and not just a part-share in it.

Pa88y

The will makes no mention of life trust. Its word like this. The house is left to my wife X and upon her death it then passes to my sons A and B.

Peregrinus

https://www.boards.ie/discussion/comment/118224605#Comment_118224605

That's a clear intention to leave it to her for her life only - an intention, in technical terms, to create a life estate for X for her life, with remainder thereafter to A and B jointly.

Since the creation of life estates is now prohibited by law, the will is ineffective to create a life estate. Instead, it takes effect to create a trust for the wife for her life - not because the will says so, but because the Land And Conveyancing Law Reform Act 2009 says that that's the effect of an instrument that purports to create a life estate. So the executor holds the house on trust to allow the wife the exclusive occupancy and use of it during her life and, on her death, to transfer it to the two sons.

I'm guessing that either (a) the will was drawn up before 2009, or (b) it was drawn up after that date, but not by a lawyer.

Sarnes

Hi Pa88y,Peregrinus,

Great question by PA88Y and thanks to all the contributors.

I am in a similar situation , in 2000 my father passed away , having been sick for the previous 4 years leaving his 50% share in his company to my mother for life ( who held the other 50 % share) and then to his two daughters equally in his will pre 2009. My Mother passed away 4 months ago, 2024.

So for my mother's share we qualify for business relief as the company has been actively trading for the last 21 years but there is a question over the business relief on my fathers share? My Father was sick so the company was not trading for the required time between 1996 and 2003 .

I am fully convince we meet the requirements for business relief on the fathers share as on reading chapter 8 of the revenue manual on valuation dates. My mother had her own 50% share and my father's 50% for life since 2000 and the accountant registered my mother as the director with CRO as 100 %share holder in 2001 and daughters directors as 0 % shareholders.

It says business relief is determined on valuation date and the valuation day is the day we inherited when the lifetime holder passes. Also the company had been trading for 6 years previously. So i take it, our share from our father is valued on mother's passing qualifying the daughters for business relief.

Am I correct in how i am interpreting Business relief?

We are waiting on the tax advisor reply !

GoodNight.