An expired testament may lead to unforeseen problems

Upon marriage, my wife and I started our life together in her mother’s owned house, meant for us to inherit upon her demise. We intended to expand this property and opted for a mortgage under our names, alongside my mother-in-law’s name, although the mortgage repayments were solely paid by myself. Sadly, my wife and her parents passed away within a short span of time.

I endeavoured to bring some resolution to the mortgaged property, reaching out to my late wife’s remaining family. They initially acquiesced to resolve the issue, however, they later preferred to let things be as they were. Subsequently, I constructed my own house and have been living there, whilst managing and renting out the other property for nearly a decade. During this period, I’ve been paying the bills and taking care of maintenance.

Following consultations with my lawyer, it emerged that he isn’t quite conversant with this particular area of law. I am aware that one of my wife’s siblings was appointed as the trustee of her parent’s estate and my children received a certain amount of inheritance, which has been kept in a post office account under the management of my wife’s family.

However, the details of what entitlements my children have from their late grandparents’ estate remain hazy to me. I want to know whether I have any entitlement to the property, having been promised it numerous times over the years. If not, what are my children’s rights?

There are two properties in question- the one we resided in, which was owned by my mother-in-law, and my wife’s family house. I am curious if I ought to have been notified about any heritage bequeathed by their grandparents. Both my wife’s parents left wills, bestowing everything they owned to each other. With both our offspring being adults, I am wondering how they ought to proceed with obtaining their inheritance.

This bewildering situation, which has been drawn out over a long period, underscores the risks of informal commitments concerning legal matters. Additionally, it serves as a stark reminder about the necessity of updating wills regularly. I am now realising how our predicament began much earlier when we moved into my mother-in-law’s property without any formal agreement.

In the absence of a rental agreement, the prevailing market rent for the property you and your wife resided in amounted to an effective “gift” in the eyes of the taxman. Over time, this could reduce your inheritance tax-free threshold. This type of arrangement is not unfamiliar amongst Irish families, with many living rent-free on familial properties with the expectation of inheritance. Although these individuals’ parents usually have their separate homes, the whole setup is neither legal nor tax compliant. Despite this, numerous families might avoid repercussions unless things go south.

Your real troubles started after your mother-in-law’s demise, without sorting out the property’s status, leaving you and your children stuck in a peculiar situation, especially after losing their mother. To compound your issues, you were held accountable for a mortgage on a property you did not legally own.

The bank’s initial demand that your mother-in-law, as the property owner, be part of the mortgage deal should have spurred both of you to resolve this issue, but it did not. You might comprehend the concerns your mother-in-law had even though you were misled by the entire situation.

Had she transferred the ownership of the property to you or your wife while she was alive, it would’ve spell more trouble as the property was considered an investment, not her residential home. As a result, she would’ve been liable to pay capital gains tax on the difference in the property’s value from the date she acquired it to the date she transferred it.

Moreover, this could’ve also led to potential capital acquisitions tax (gift tax) implications for you and your wife, especially during the early years of your family when finances might have been strained.

It’s inexplicable why your wife’s death or her mother’s death didn’t trigger the life insurance lenders require mortgage holders, which is another issue that needs exploring.

Your situation took an unexpected turn when your mother-in-law passed away. Despite her word to pass the property to you and your wife, you likely found out from her will that all properties were left to her husband.

No matter what ensued after, the critical point was that you embarked on mortgage payments for a property not under your ownership. This happened without a formal tenancy contract and devoid of any rights to the title. You claim, though it may not seem so, that you have rights to own the property as you’ve been controlling it, maintaining and managing its bills, as well as using all rent revenues. You have also been held responsible for renting out the property and ensuring that you pay tax on the rental income.

But let me clarify, I’m no expert on this matter and I don’t possess legal or financial advisory qualifications that come into play here. However, I recommend seeking legal advice about “adverse possession” – an interesting concept.

Accumulating 12 years of unbroken control on a property without anyone’s consent – absence of a lease, licence, or tenancy agreement, for instance – empowers you to register as the property’s legal owner in the Land Registry, if the original owner does not attempt any legalized claim to the property.

Clearly, there were some form of permissions when your mother-in-law was alive. However, after her passing and especially after her husband’s demise, it’s not clear if these permissions still exist legally. Therefore, I suggest discussing adverse possession with a solicitor who specializes in this area. The Land Registry typically informs whoever’s named as the property’s registered owner in their records, providing a chance to contest the application. Sadly, given the circumstances of your case, I am uncertain as to who the registered owner might be currently.

Relating to inheritance rights, I question your entitlement to the property despite paying its mortgage, in the absence of adversarial possession. A property-law specialist might provide better counsel. For your children, what matters are your in-laws’ wills. Given the status quo of the will, assuming that both in-laws left everything to their surviving spouse without any known modifications, the will of your father-in-law – the last of the two to pass away – is subject to the legal rule known as the “doctrine of lapse.”

The particular section of the Succession Act that comes into play in this scenario is section 91. It stipulates that, unless the will dictates otherwise, any property or inheritance within the said will that is rendered null or fails due to the recipient predeceasing the author of the will, or due to the bequest or devise being unlawful or unfeasible, would then fall under any residuary bequest or devise stated within the will, if the will contains such a clause.

Put simply, your father-in-law had arranged for his belongings to be transferred to his spouse after his death. The dilemma arises in that she did not outlive him, which thwarts this direction.

Unless his will contains a specific provision outlining how the assets should be redistributed should she predecease him, all her intended possessions become part of what we refer to as a residuary clause if his will contained one. A residuary clause designates the distribution of any remaining parts of the estate after the execution of all other specific advancements contained within the will, or which cannot be executed due to the intended recipient’s absence.

From what you’ve said, it seems the will does not lay out specific directions for the event of the husband outliving his wife, so the residuary clause will be invoked if his will has one.

Regularly, I instruct people to incorporate a residuary clause into their will as a way of preparing for unforeseen or unplanned events. However, if the will lacks both a residuary clause and an intended recipient, any unallocated parts of the estate (which doesn’t appear to be the case here) will be distributed as per the laws of intestacy.

This leads us to the primary concern for you.

Should the property be shared according to the rules of intestacy in a situation where the partner/spouse has passed away, but they have children, then the estate is divided evenly among those children.

In your specific circumstances, one child did not survive their father. When such an incident arises, the remaining children each receive an equal slice of the estate, and any offspring of a deceased child – in this case, your children – collectively inherit their mother’s share.

In specified legal situations, a term known as “per stipes” applies, but there’s no need for you to concern yourselves with technical language. Essentially, given the scenario you’ve presented, each of your offspring has a rightful claim to a portion of their grandparent’s legacy.

At the time, however, they were underage and not yet legally qualified to receive an inheritance. Indeed, those under the age of 18, labelled children in this context, are not eligible for direct inheritance, meaning they cannot obtain direct oversight of inheritance assets. To cater for such circumstances, it is generally recommended for individuals who plan on bequeathing items to children, or where children might become beneficiaries, to set up a simple trust in their will, designed to manage these assets until the child becomes a legal adult, at 18 years of age.

Should there be no mention of a trust, as it seems to be the case here according to your statement, the executor or the designated personal representatives responsible for dealing with the estate, as per the will, are given the permission to nominate trustees to take care of any inheritance assigned to a minor. In the absence of such nomination, the executor or the assigned representative automatically assumes the role of trustee, as per sections 57 and 58 of the Succession Act of 1965.

You mentioned that one family member assumed trusteeship of the parents’ assets, which could be relevant in this context. I would have predicted some correspondence on the matter, but it remains unclear if the parent or guardian of minors who are beneficiaries of the trust are entitled to certain information.

You also indicated that the children were beneficiaries of “a sum of money from the estate” that was deposited into a post office savings account and continues to be managed by a family member.

While I’m not versed in the intricacies of trust law, now that they’ve reached adulthood, there appears to be no legal barrier in the Succession Act or trust legislation preventing your children from assuming control of assets resulting from your father-in-law’s estate without a valid will.

Furthermore, each child has a rightful claim to their entire portion of the estate. It’s still unclear whether the “sum of money” noted earlier equates to the portion of the total value of the full estate, inclusive of the two properties.

Consequently, each of your children is entitled to one-sixth of the total estate. Now that they’re legal adults, there are no grounds for keeping the inheritance outside their direct control. They should most definitely have been made aware of their detailed entitlement by this stage.

Once more, this is a matter they, now being grown-ups, can’t depend on you to handle. They must seek legal counsel. The inheritance rights should be clear to a lawyer based on probate documents.
Evidently, if you manage to secure the property by adverse possession, it can impact the assets available for the entire family to inherit. There seem to be numerous issues concerning both the property and the inheritance that, from your remarks, may necessitate specialised legal counselling, possibly not from the solicitor you’re currently engaging.
Bear in mind, this article is intended to assist readers and it does not act as a substitute for professional advice.

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