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POTENTIAL PROBLEMS WITH PASSING ASSETS ONTO CHILDREN

My husband and I separated ten years ago – it was quite amicable and he simply moved out and I continued to live in the family home and I took over the mortgage repayments. Our three children are now grown up and I am having some health issues and I want to make a Will providing for them.  Can I make a simple Will leaving everything to them or do I have to consult with my husband?

The short answer is that you can make a Will leaving everything to your children but because of your particular circumstances it may not actually pass all of your assets to them. Because you and your husband never entered a legal Separation Agreement you remain each other’s spouses for the purposes of the Succession Act and for the purposes of any pension schemes in which you are involved.  Under the Succession Act of 1965, even if a deceased spouse has provided otherwise in his or her Will, the surviving spouse will be entitled to half of the estate if there are no children and one third of the estate if there are children. Accordingly even if you make a Will leaving everything to your three children, your husband can effectively over turn this by claiming his legal right share (one third) and your children will then only inherit two thirds of your assets. 

Furthermore there may be a difficulty with your family home – usually family homes are held in the joint names of husband and wife in a form of ownership known as a joint tenancy.  This means that on the death of one spouse the property automatically passes to the survivor.  This is called the right of survivorship. Accordingly even if you specifically state in your will that you are passing your interest in the family home to your children, it will not pass to them if you and your husband still own it as joint tenants. Instead, it will automatically pass to him on your death by right of survivorship and this overrides the directions in your will. This type of ownership arrangement- joint tenancy- can be changed , but it will require your husband’s agreement. Ideally, the house should be transferred into your sole name, or at the very least, you should change the form of ownership to whats called a tenancy in common-each of you will still own a half share but you can each pass on or transfer your half share to whomever you want. Obviously your husband will have to cooperate and consent to the changes and if he refuses, you could bring a Court Application to resolve the matter.

 The same rules regarding the passing of assets to the surviving joint owner also apply to any other assets you and your husband may still hold joint – you may still have a joint savings account for example and in the event of your death this would automatically pass to your husband regardless of what you say in your Will.

If you have a Credit Union account, it is usual that there would be a nomination in place– this is a direction to the Credit Union that in the event of your death the account proceeds (up to a certain limit- currently €23,000) are to pass on to a named individual and in the case of most married people, the named individual is usually the surviving spouse. Accordingly, if there is a nomination in place on your Credit Union account in favour of your husband, and if you don’t change it, the Credit Union monies will pass to your spouse

If you are working and have a pension scheme through work or are already in receipt of a pension from your work place, the rules of some of these schemes provide for pension or lump sum payments to the surviving spouse in the event of the death of the pensioner. It may be possible for you to change this and to name your children as beneficiaries but this is something you would have to check specifically with your pension provider.

If you want to make proper provision for your children then it is essential that firstly you establish how your various assets are held – are they in your sole name, are they in joint names or are there other arrangements in place which will automatically pass the assets onto a surviving spouse in the event of death.  Once you establish how the assets are held, you can then see what needs to be done to put them into your sole name or to see what changes you can make to existing pension policies, accounts or otherwise so that they will pass to your children under your Will.

It is absolutely essential that the family home is transferred into your sole name as if it is held jointly this will pass to your husband if you die before him.  It is also essential at this stage that you and your spouse enter into a legal Separation Agreement, separating out your assets, dealing with any pension issues and waiving your respective Succession Act Rights so that your husband will have no claim against your estate in the event of your death and vice versa.  It is essential that you contact your Solicitor without delay and formalise your affairs or you may find that in the event of your death there will be nothing in your estate to pass onto your children.

My husband and I separated ten years ago – it was quite amicable and he simply moved out and I continued to live in the family home and I took over the mortgage repayments. Our three children are now grown up and I am having some health issues and I want to make a Will providing for them.  Can I make a simple Will leaving everything to them or do I have to consult with my husband?

The short answer is that you can make a Will leaving everything to your children but because of your particular circumstances it may not actually pass all of your assets to them. Because you and your husband never entered a legal Separation Agreement you remain each other’s spouses for the purposes of the Succession Act and for the purposes of any pension schemes in which you are involved.  Under the Succession Act of 1965, even if a deceased spouse has provided otherwise in his or her Will, the surviving spouse will be entitled to half of the estate if there are no children and one third of the estate if there are children. Accordingly even if you make a Will leaving everything to your three children, your husband can effectively over turn this by claiming his legal right share (one third) and your children will then only inherit two thirds of your assets. 

Furthermore there may be a difficulty with your family home – usually family homes are held in the joint names of husband and wife in a form of ownership known as a joint tenancy.  This means that on the death of one spouse the property automatically passes to the survivor.  This is called the right of survivorship. Accordingly even if you specifically state in your will that you are passing your interest in the family home to your children, it will not pass to them if you and your husband still own it as joint tenants. Instead, it will automatically pass to him on your death by right of survivorship and this overrides the directions in your will. This type of ownership arrangement- joint tenancy- can be changed , but it will require your husband’s agreement. Ideally, the house should be transferred into your sole name, or at the very least, you should change the form of ownership to whats called a tenancy in common-each of you will still own a half share but you can each pass on or transfer your half share to whomever you want. Obviously your husband will have to cooperate and consent to the changes and if he refuses, you could bring a Court Application to resolve the matter.

 The same rules regarding the passing of assets to the surviving joint owner also apply to any other assets you and your husband may still hold joint – you may still have a joint savings account for example and in the event of your death this would automatically pass to your husband regardless of what you say in your Will.

If you have a Credit Union account, it is usual that there would be a nomination in place– this is a direction to the Credit Union that in the event of your death the account proceeds (up to a certain limit- currently €23,000) are to pass on to a named individual and in the case of most married people, the named individual is usually the surviving spouse. Accordingly, if there is a nomination in place on your Credit Union account in favour of your husband, and if you don’t change it, the Credit Union monies will pass to your spouse

If you are working and have a pension scheme through work or are already in receipt of a pension from your work place, the rules of some of these schemes provide for pension or lump sum payments to the surviving spouse in the event of the death of the pensioner. It may be possible for you to change this and to name your children as beneficiaries but this is something you would have to check specifically with your pension provider.

If you want to make proper provision for your children then it is essential that firstly you establish how your various assets are held – are they in your sole name, are they in joint names or are there other arrangements in place which will automatically pass the assets onto a surviving spouse in the event of death.  Once you establish how the assets are held, you can then see what needs to be done to put them into your sole name or to see what changes you can make to existing pension policies, accounts or otherwise so that they will pass to your children under your Will.

It is absolutely essential that the family home is transferred into your sole name as if it is held jointly this will pass to your husband if you die before him.  It is also essential at this stage that you and your spouse enter into a legal Separation Agreement, separating out your assets, dealing with any pension issues and waiving your respective Succession Act Rights so that your husband will have no claim against your estate in the event of your death and vice versa.  It is essential that you contact your Solicitor without delay and formalise your affairs or you may find that in the event of your death there will be nothing in your estate to pass onto your children.

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