The October Newsletter

Hi there,

Last month, some of you may have seen me on tv as the expert on Help Me Buy a Home on Virgin Media. I was asked questions about buying a house, building contracts and a few other things, and I really enjoyed the experience.

It was filmed back in May in Cork Circuit Court. I’m so used to going into the courthouse as a solicitor that I found the whole thing a little embarrassing at first. I knew they were filming in Courtroom 2, so I quietly slipped in. One of the sound team came over and whispered that I was in the wrong courtroom and that, if I was a solicitor, I would have to leave because filming was taking place. I had to whisper back that I was actually there to be part of the filming!

We spent the morning there, about three hours in all, and I really enjoyed it. Perhaps it’s a sign of a little more television to come!

This month, I want to talk about advancements to children and Section 63 of the Succession Act 1965.

As children grow up, we may find ourselves helping them in different ways. Perhaps one child has managed to buy a home, while another is struggling to get on the property ladder. A parent might help with a house deposit, pay a substantial bill or make another significant gift.

The law calls certain gifts of this kind “advancements”. The Act defines an advancement as a gift intended to make permanent provision for a child. Whether a particular payment qualifies can depend on the circumstances and the intention behind it.

Section 63(1) says:

“Any advancement made to the child of a deceased person during his lifetime shall, subject to any contrary intention expressed or appearing from the circumstances of the case, be taken as being so made in or towards satisfaction of the share of such child in the estate of the deceased or the share which such child would have taken if living at the death of the deceased, and as between the children shall be brought into account in distributing the estate."

What this means is that if, after you die, a beneficiary claims that money you gave to one of your children during your lifetime was an “advancement”, that claim will need to be addressed by the executor. The person making the claim must prove that the payment was an advancement. If it is proved, and there is nothing to show that you intended it to be a separate gift rather than part of that child’s inheritance, Section 63 will apply.

For example, if your Will leaves your estate equally to two children and the estate is worth €200,000, but one child received an advancement of €40,000 from you while you were alive - for example, to pay a deposit on a house - the estate is deemed to be worth €240,000 for the purpose of calculating their shares, even though that €40,000 is no longer physically there. Each child’s share is therefore €120,000. The child who received the €40,000 deposit has that amount deducted from their share, so they receive €80,000 from the estate. The other child receives €120,000. Together, those amounts make up the €200,000 remaining in the estate. So you can see here that it was your intention when you die that each of your two children would receive an inheritance of €100,000 each but because of S. 63 Advancement, the child who didn’t receive the cash from you while you were alive can make a claim under S. 63 when you die to have the deposit monies gifted to their sibling taken into account in calculating their inheritance.

If you do not want any of your children to be able to make such a claim when you die and you want each of them to have a clean slate ie no previous gifts are to be taken into account when you die, then you need to include a specific clause into your Will. This month, I’ve included a clause below for you to discuss with your solicitor.

Suggested clause for discussion with your solicitor

“For the purposes of section 63 of the Succession Act 1965, I express the intention that any advancement made by me during my lifetime to any of my children is not to be treated as being in or towards satisfaction of that child’s share in my estate and is not to be brought into account in distributing my estate under this Will or on any partial intestacy. Each child’s entitlement is to be determined in accordance with the provisions of this Will, without any deduction, set-off or equalisation in respect of such an advancement.”

A Final Thought..

It is important to discuss this with your solicitor when making your Will. Tell them about any significant gifts or financial help you have given to your children, and let them know whether you want those advancements taken into account or whether you want each child’s inheritance to be decided by the terms of your Will alone. Your solicitor can tailor the wording to your circumstances.

I hope you find this helpful, and please feel free to pass it on to anyone who might find it useful. 

If you have a friend who is interested in purchasing The Journey folder, then please pass this €20 off discount code to them with my blessing JOURNEY20.

Warmly,
Jacquelyn
xxx