Will split 3 ways between 3 children - 1 child previously got a gift

H

happypat

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Example. Estate - €750k at date of death. Will states divide equally between 3 children.

Child 1 got a gift of €150k 5 years prior to death of parent. This is separate to €750k value of estate at death.

No provisions in will relating to previous gift.

Does executor apportion €250k per child and ignore the previous €150k gift? i.e. apportion the final €750k equally?
Or do they "add on" the €150k to the €750k, giving €900k total inheritance - €300k per child. As will states equal distribution, give child 1 €150k out of the €750k and other 2 children €300k. Thus all children getting a total of €300 each.
 
What were the intentions of the Deceased?

63.—(1) 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.
 
Thanks all. Reason I asked was, and I think @mf1 is talking about this?, is that the €150k goes towards the total inheritence for revenue reasons, hence I wondered whether it should be incorporated into the distribution. Deceased has not referenced intentions. So this is more a legal question. @T McGibney yes I see your point, but what about @mf1 quote of "63" - does this change things.

I had read that "....threshold is cumulative, so all of the gifts and inheritances received since 5 December 1991 must be counted when calculating whether the threshold has been reached" - hence that the gift should be included, or maybe that is only about the tax element and doesn't affect the distribution.

@Cervelo will made prior to gift afaik. Not sure either whether this makes a difference. I wonder does "please split equally between my 3 children" count as a contrary intention referred to by @mf1

@mf1 apologies but I'm just trying to make sure, is your reading (barring the contrary intentions piece mentioned) that it SHOULD be therefore taken into account in the distribution?
 
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Having read a bit more, I am seeing that "gifts" and "inheritances" are both subject to the individual limit of €400,000, but that a gift, unless given within 2 years of the donor dying, are not actually inheritances. So not included in the distribution? Does that contradict Section 63?
 
Let's say for arguments sake:
1. Three children
2. Estate is total €750K
3. Each share is €250K

If it was the Testator's intention that the prior gift of €150K was not to be treated as an advancement,
he probably should have made a new Will after making the gift, making intentions clear. But he didn't.

I suspect that no-one thought about it very much.
At the time, no-one was thinking about death.

With the benefit of hindsight, either

Everybody thought it was an advancement and should be taken into account on death.
or
Everybody thought it was a good idea then and and now happy to split what's left in three.

If all the beneficiaries agree on what they thought back then and it fits in with what they think now, end of.

Otherwise, it is likely to be Pistols at Dawn.


mf
 
happypat said:
I had read that "....threshold is cumulative, so all of the gifts and inheritances received since 5 December 1991 must be counted when calculating whether the threshold has been reached" - hence that the gift should be included, or maybe that is only about the tax element and doesn't affect the distribution.
Click to expand...
This relates to the tax treatment of gifts and inheritances in the relevant CAT group. It has no bearing on the distribution of the estate.
 
@mf1 thanks for that. In this case, you're correct, nobody really thought about it. It was just a case of helping one son buy a house. That son would likely not have any issue with said amount being taken into account. Hard to say what other sons would feel about it NOT being taken into account. Pistols at dawn would likely not be drawn, or threatened, but I was hoping that it would be more legally tight.

If everyone happy to agree on the best treatment (either option), does getting Probate require some actions or is it simply distributing after probate as the executor sees fit in agreement with the 3 kids.


@T McGibney are you aligned with mf1's view - I ask as you were more certain about it being black and white. Thanks.
 
Cervelo said:
Would when the will was written have any bearing on the prior gift??
Click to expand...
It would.

If Dad makes a will dividing his estate three ways and only later makes a gift to Son A of 150k, section 63 comes into play and, unless there is evidence suggesting the contrary, it is presumed that Dad's intention was that the gift to Son A is to be treated as an advance, so in the distribution of the estate Son A gets another 150k and the other children get 300k each.

But if it happens the other way around — If Dad gifts 150k to Son A, so reducing his assets from 900k to 750k, and later makes a will dividing his estate 3 ways and saying nothing about the gift already made, it's at least arguable that the failure to say anything about it in the will points to Dad's intention that the earlier gift should be ignored, and that Dad intended each child to get 250k.

But note that s. 63 doesn't apply to all gifts — only to "advancements". An advancement is a gift intended to make permanent provision for a child so, the gift of a site for a house; the gift of a sum of money to assist with house purchase; a gift to assist the child in establishing themselves in a profession, vocation, trade or business; a gift to pay for the education of the child to a higher standard than the other children are educated to; that kind of thing. If Dad pays for really good holidays, or flash new cars, that's not an advancement.
 
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