The Law Reform Commission has published a report on the law relating to the rights of sons and daughters to inherit from a parent’s estate. Under the law as it now stands, if a court considers that a parent has failed to make “proper provision” in his or her will for a son or daughter, it can order that more generous provision be made for that son or daughter from the parent’s estate (Section 117 of the Succession Act 1965). Section 117 makes no distinction between minor and adult sons and daughters. The Commission has recommended that it should be assumed that parents have already provided sufficiently for any child aged over 18 (or over 23 if in full-time education) and therefore recommends that the current Section 117 be replaced with a provision requiring a parent to make proper provision only for sons and daughters who have not yet reached the age of 18 (or 23 if still in full-time education). It recommends, however, that a parent should still be obliged to make proper provision for an adult son or daughter where one of the following three scenarios apply: (1) where the adult son or daughter has a particular financial need arising from their health or decision-making capacity; (2) where the estate includes an item of particular sentimental value to the adult son or daughter; (3) where the adult son or daughter provided care and support for the deceased parent. The Commission also favours allowing applications for proper provision to be made where there is no will (which is not the case now).
Probate – Advice on Solicitor’ Charges – June 2017
Solicitors are obliged by Section 68 of the Solicitors (Amendment) Act 1994 to inform their clients in writing about the fees the client will be charged when work is completed. This applies to probate work as it does to any other matter. However, the Law Society recommends that when solicitors are instructed to apply for probate and to administer an estate, they should provide written information about their costs not only to the client (who is the Executor of the will) but also to any beneficiaries out of whose share of the estate the legal costs will have to be paid. The solicitor should, therefore, seek instructions from the Executor authorising the solicitor to write directly to those beneficiaries about the estimated costs. In practice, this means that any person who is entitled to a percentage share of the residue of an estate (i.e. what is left after the estate debts are paid) should be given advice in writing concerning the legal costs that will be charged to the estate.
Dispute Resolution – Mediation – May 2017
The Mediation Bill 2017 is currently making its way through the Oireachtas. The Government aims to promote mediation as an effective alternative to court proceedings with a view to resolving disputes more quickly and reducing legal costs. The bill obliges solicitors to advise their clients to consider using mediation to resolve disputes, to provide them with information about mediation services, and to point out to them the several advantages of mediation over court proceedings. If a court action nonetheless proceeds, a solicitor will be obliged to swear a Statutory Declaration confirming that he or she has provided such advice. Taking part in mediation will remain voluntary, and disputing parties can withdraw from it at any stage. The Bill also allows for a judge in a court action to invite the parties to consider mediation and to adjourn a case to facilitate mediation.
Gift and Inheritance Tax – Dwelling House Relief – April 2017
Until 23rd December 2016 a person could give a gift of a house to another person without the recipient having any liability to gift or inheritance tax. Section 86 of the Capital Acquisitions Tax Consolidation Act 2003 provided that where a person had lived in a dwelling house owned by another person for a period of three years, he or she could then receive the house as a gift or inheritance tax-free provided that certain conditions were met, such as for example that the beneficiary did not own or part-own another dwelling. The provision was a popular means of transferring a family home to a son or daughter in a tax-efficient way. However, the Finance Act 2016 has limited this relief so that now it can be availed of only where a house is received as an inheritance and not as a gift, unless the recipient is elderly or incapacitated.