Do you have to have a will in Ireland? No, not at all.
If you’re happy to leave confusion in your wake, with family most likely having to wait longer than necessary to benefit and facing the prospect of higher than necessary tax and legal bills, then you should continue to blissfully ignore anyone who suggests making a will might be a good idea.
That good cause you always intended to leave something to will probably survive without, or maybe it won’t. And that nice carer/cleaner/gardener whom you had made a mental note to reward for making your life in later years more comfortable and enjoyable will just have to make do.
There is absolutely nothing to stop you being one of the estimated seven in 10 Irish adults who either thinks they will live forever, sees the making of a will as a portent of death or simply does not care what mess they leave behind them.
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But that doesn’t mean it is a good idea.
It is astounding that about 2.8 million adults in Ireland have never made a will. The suspicion must be that, for many of them, worries about cost and what they see as confusing and technical legal jargon are off-putting factors.
They shouldn’t be. Yes, the language is technical but these are legal documents, open to challenge in the courts and where even a misplaced comma can lead to disputes over interpretation. That is why precision is key: it is also why everyone is well advised to use a solicitor when they want to make a will, rather than relying on free online offerings.
And it doesn’t have to be expensive. Most simple wills will cost no more than a couple of hundred euro to have drawn up by a solicitor.
The financial affairs of the vast majority of people are very straightforward. They have a family home, hopefully some savings in banks or credit unions and, perhaps, An Post. They might have a pension fund.
A smaller number might even have an investment in some shares, bonds or prize bonds. Some will have a small holiday bolt-hole.
More importantly, their intention is also remarkably uncomplicated. Apart from the possibility of the odd small bequest or legacy to a friend, a gardener or carer, a charity or their local church, mosque or synagogue, most people will leave everything they have to their spouse if they have one.
There are good reasons for this. First, in most families, assets are held jointly. And in tax terms, anything left to a spouse is exempt from tax.
So, the vast majority of wills will leave everything to a surviving spouse or, if their spouse predeceases them, to their children. First, because they’re your closest relative and it makes sense you would like them to benefit. And, second, because they have the next highest tax-free window.
If a child dies before you, it is common for that child’s share to go to their children for the same reasons.
What’s in a will
There are generally four parts to a simple will.
It opens by identifying who the person is and confirming the will negates any previous wills.
It then sets down who the person wants to act as executor of their estate, organising everything after they have died. It can be one or more people and they will generally be close family or friends. It is a good idea to make sure the person is happy to act in the role before naming them in the will.
Some people get confused as to whether executors can benefit from a will. They can. The only people who cannot benefit are the independent witnesses to the document and your signature on it. These will generally be people in your solicitor’s office.
It also generally makes sense to avoid choosing one’s spouse or partner as executor for the obvious reason that most of us hope to live to a decent age, at which time our partners will also be getting on a bit and might find the whole thing overwhelming.
The third element of the will is where you get down to the nuts and bolts of who gets what. If you are leaving specific bequest – a family heirloom or a sum of money – to one or more people or charities, each will have its own separate paragraph.
If you have young children, it would be usual to name a guardian to take care of them in the event of the death of both parents. Again, make sure any proposed guardian is willing to act in the role and then make sure resources are made available in the will to allow them carry out the function.
It is advisable then to have what is called a residuary clause. This is basically a safety net, which says that after all specific bequests or legacies, anything remaining is divided (generally equally but not necessarily) between identified family members – most often your children.
One reason for this is you might acquire assets after a will is drawn up and their distribution on your death might not specifically have been provided for in previous clauses of the will. A residuary clause says how you would like them to be treated.
You might also have a scenario where your share in a holiday home or a beloved painting is left to a family member who either does not want it or maybe lives abroad and who will find the bequest more a hindrance than a benefit. If they reject it, it goes into a residuary clause.
Another reason for a residuary clause is that, in its absence, any assets not specifically provided for in the will are treated under the rules of intestacy, which are rigid and which might also lead to delays in distribution.
The will must be signed and dated in front of two witnesses who must, themselves, sign and identify themselves. If not, it will not be a valid will.
Who can make a will? Anyone over the age of 18 who is of sound mind.
Who should? Anyone with a reasonable amount of assets. You’ll often see the figure of €25,000 bandied about. Certainly, once you own a property with or without a mortgage, you should have a will.
The same is true of family. Once you have a long-term partner and/or children, a will is important. And in a world of blended families, that is even more important.
Do bear in mind that if you have made a will and then get married, the marriage will invalidate any will signed before that date – unless the will specifically indicates your intention to get married to your future spouse.
Speaking of family, if you are not married, making a will is even more important. One in seven families in Ireland are cohabitants who are not married. If they die, the remaining partner has no automatic right to inherit your assets in the absence of anything you leave them specifically in a will.
That does not include assets owned as joint tenants – such as a home bought together – which are passed by survivorship to the remaining joint tenant(s) outside of any will.
That could also include joint bank accounts but do make sure there is documentary evidence that the account is held as joint tenants and not as tenants in common where each party owns only a certain portion of the assets.
Regardless of survivorship, tax issues can also arise. An unmarried partner is considered a “stranger” in tax terms. The amount they can receive from you tax-free is capped at €20,000, which, for some families, means it may make sense to frame a will so that more is left to your children, who each have a €400,000 tax-free cap.
Oh, and that holiday bolt-hole? If it is in another country, bear in mind that many countries require local wills for physical property in that country.
Better with Money podcast
Our Better with Money podcast returned this week. The podcast, which is released every Tuesday, offers practical advice for those who want to turn over a new leaf on their personal finances. You can listen wherever you get your podcasts.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.
