Out of date will can create unintended issues

When we got married, we moved into a house that was owned by my wife’s mother which she told us we would be inheriting on her death. As we were looking to extend the property, we took out a mortgage in our names and, because she was the owner, my mother-in-law’s name, although it has always been paid by me.
Unfortunately, in a relatively short period, my wife died as did both her parents.
When I asked by wife’s remaining family about sorting out the house issue, they said initially they would get around to it but subsequently decided to “leave it the way it is”.
I eventually built my own house where I now live but have continued to control the other house which I have rented out over the past 10 years or so while paying all the bills and maintaining the house over that time.
I think my solicitor really doesn’t know the ins and outs of this area and I do not know where to go.
I do know one of my wife’s siblings was the trustee of their parents’ estate and my kids did receive some money as part of the estate. This was put into a post office account and is to this day controlled by my wife’s family. I do not know what my children are entitled to from their late grandparents’ house /estate.
Do I have any legal right to the property that was promised so often to me and my wife over the years.
If I am not entitled to anything, what are my children entitled to? There are two properties in play here, the house we lived in which was owned by my mother in law and their own family home.
Should I have been informed of any inheritance my children were given or were entitled to from the trustee of the estates of my mother-in-law and father-in-law? Both my wife’s parents died with wills leaving everything they had to each other.
Both children are now adults. How should they proceed to get their inheritance?
Mr P.D.
This is obviously a hugely stressful situation for all concerned and one that appears to have played out for far too long. It highlights two things: the danger of “informal” commitments on what are, by their nature, legal issues and the importance of keeping our wills updated.
Although you certainly didn’t realise it then, your problems started back when you moved into your mother-in-law’s property with any formal agreement.
If there was no rent agreement in place, the market rent for that property at that time was effectively a “gift” to you and your wife in the eyes of the Revenue, one that over the time you lived there would eat into your inheritance tax free threshold.
You are far from the first Irish family to operate like this. I would guess thousands of people operate under similar arrangements around the State, living rent-free under promise of inheritance in family property (often passed down through generation) from parents who live separately in their own family home.
It’s not legal and it’s not tax compliant but many people probably do get away with it, unless things go wrong. And that’s when you problems really started. Your mother-in-law’s death without resolving the status of this property effectively left you and your children, who had already lost their own mother, in no man’s land.
As a further complication, you were liable for a mortgage on a property you did not own.
The bank’s initial insistence on the owner, your mother-in-law, being party to that mortgage should have been the catalyst for both sides to sort this out but it wasn’t. I obviously think the whole thing was ill-advised but I do understand your mother-in-law’s concerns.
Signing over the property to you at that time, or at any time while she was alive, would have presented its own problems as this was not her family home but another property that she owned. On that basis, it would have been seen by Revenue as an investment property and she would have been subject to capital gains tax on the difference in the value when she first acquired it and the date she transferred it to her daughter, or to both of you.
It might also have had capital acquisitions tax (gift tax) implications for you and your wife at a time when money might have been tight in the early years of your family.
For what it’s worth, I also do not understand why the life insurance all lenders require mortgage holders to take out as security on the mortgage did not kick in when your wife died, or her mother. That raises its own questions which I do not have space to go into here.
So the “informal” solution continued until your mother-in-law died, at which point you presumably discovered that, despite her promise to you and your wife, there was no provision to pass the property to you in her will with everything going to her husband.
Regardless of anything that happened subsequently, this is the key juncture. You were now paying a mortgage on a property you did not own, with no formal tenancy agreement in place and with no title rights.
On the surface, you have no rights to ownership of this property. However, you say you have controlled it since that time, have been responsible for all bills and maintenance and, since you moved out yourself, have been in charge of renting out the property, collecting and having use of all rental income and, presumably, paying tax on that.
I am definitely no expert on this. As regular readers will know, I am neither a solicitor nor a qualified tax or financial adviser, but I think you should talk to a solicitor about the concept of “adverse possession”.
If you take control of property with no consent – such as a lease, licence or tenancy agreement – for 12 continuous years and the owners takes no legal steps to take back control of the property or land, you are entitled to apply to Land Registry to be listed as the legal owner.
While you mother-in-law was alive, there was clearly some form of consent in place: but the question is whether any consent within the meaning of the law has been in place since she died, and certainly since her husband died.
It would be worth you considering this with a solicitor – ideally one with experience in the area of adverse possession. What is certain is that Land Registry notifies whomever they have on their files listed as the registered owner, allowing them an opportunity to contest any application. In your rather convoluted case, I have no idea who the registered owner is currently listed as.
That then gets us to your other questions about inheritance rights.
Beyond adverse possession, I cannot see how you have rights to this property despite paying the mortgage. But again a lawyer specialising in property law might better advise you there.
But, for your children, the key is the wills of your in-laws. Assuming there were no amendments to the wills of which you are unaware and the wills are as you suggest – i.e. each left everything to the other spouse – then the will of your father-in-law (the last of them to die) falls under the legal concept of “doctrine of lapse”.
The specific relevant section of the Succession Act here is section 91. This states: “Unless a contrary intention appears from the will, any estate comprised or intended to be comprised in any devise or bequest contained in the will which fails or is void by reason of the fact that the devisee or legatee did not survive the testator, or by reason of the devise or bequest being contrary to law or otherwise incapable of taking effect, shall be included in any residuary devise or bequest, as the case may be, contained in the will. that where an intended beneficiary cannot inherit because they have predeceased the author of the will.”
So what does this mean?
Essentially, your father-in-law arranged for everything to go to his wife but she died before him, so that cannot happen.
In that event, unless the will makes specific provision for the reallocation of assets in the event of her predeceasing him, everything that was to go to her goes into what is called a residuary clause if the will had one. A residuary clause effectively says what is to happen any residue of an estate – anything left over after all the other specific provisions of the will are carried out, or cannot be carried out as explained above because the intended recipient is no longer here.
Your understanding is that this will had made no other specific provision of where the estate should go if this man’s spouse predeceased him, so residuary clause it is ….if his will had one.
I always advise people to include a residuary clause in their will precisely to deal with these sort of unknown or unplanned circumstances. But, if there is no residuary clause and no intended recipient, then the estate (or that part of it not otherwise allocated, which does not seem to apply here) is distributed under the rules of intestacy.
This is where we get to the nub of it for you.
If the estate is distributed under intestacy where his spouse/partner is no longer alive but where he does have children, the estate is divided equally among the children.
In your case, one child has predeceased the father. Where this happens, the remaining children each get their equal share of the estate and any children of the deceased child – i.e. in this case your children – share their mother’s portion.
There’s a legal term for this too – “per stipes” – but you don’t need to worry about that. The bottom line is that, in the circumstances you outline, each of your children is entitled to a share of their grandparents’ estate.
But back then they were too young to inherit. Children – i.e. anyone under the age of 18 – cannot inherit directly in that they cannot gain personal control of any inheritance. To address this, the general advice to people leaving anything to children or where children might inherit is to make provision in their will for a basic trust to take control of the assets until they reach the age of majority (18).
If there is no provision for a trust, as appears to be the case here from what you say, the executor of the will or personal representatives appointed to process the estate under the will may appoint trustees to look after any share belonging to a child. If they do not otherwise appoint trustees, the executor or personal representative themselves are deemed to be the trustees. This is covered by sections 57 and 58 of the Succession Act 1965.
You say one of the family was trustee of their parents’ estate which may cover this. I would have expected communication on that point but I cannot say whether a parent or guardian of minors who are subject to a trust are entitled to any information.
You also say the children did receive “some money as part of the estate” which was “put into a post office account” and is still controlled by this family member.
I am no expert in trusts – an area subject to its own complexities. However, now that they are over the age of 18, I can see nothing in the Succession Act or rules of bare trusts that says anything other than your children are entitled to take control of any assets falling to them under the intestacy surrounding your father-in-law’s estate.
They are also each entitled to their full share of the estate. It is not clear to me whether the “some money” you mention equates to that portion of the value of the full estate (including the two properties).
So your children are entitled to one-sixth of the estate and, having turned 18, there is no reason that inheritance should not have come under their direct control. They certainly should have been informed of the details of their full entitlement by now.
Again, this is something they – now they are adults, you can no longer act for them on this – will need to pursue through a solicitor. Probate documents should tell a lawyer what they should have been entitled to.
Of course, if you gain adverse possession of the property, that will affect what is available to all family members for inheritance.
As you can see, there are several points here both on the property and the inheritance that I think require specialist legal advice and, judging from your comments, probably not from the solicitor you have been dealing with thus far.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to [email protected] with a contact phone number. This column is a reader service and is not intended to replace professional advice