Wondering if anyone has any thoughts/suggestions on a recent request for a will. The testatrix wants to gift the residue of her estate to be divided equally between her 2 children, however, out of the 50% share to be gifted to the son, she wishes to gift a specific figure of £x to her son’s children (her grandchildren). She only wants this to come from the share due to her son and does not want it as a specific gift, due to the risk that if her estate fell below £x sum the children would not receive anything and her grandchildren would take in priority.
I am struggling to think of a way round this one, suggested perhaps splitting the 50% share between the son and the grandchildren but the testatrix wants to specify that the specific amount £x is to come from the son’s 50% share?
This is a very common situation in Ireland where each beneficiary has a tax-free threshold based on his or her relationship to the deceased individual. To minimise Irish capital acquisitions tax (“CAT”), testators often leave the maximum that can be received free of CAT to grandchildren, and sometimes to a son-in law or daughter-in- law, payable from their particular child’s share.
The second part of my earlier post seems to have disappeared. The full post was:-
This is a very common situation in Ireland where each beneficiary has a tax-free threshold based on his or her relationship to the deceased individual. To minimise Irish capital acquisitions tax (“CAT”), testators often leave the maximum that can be received free of CAT to grandchildren, and sometimes to a son-in law or daughter-in- law, payable from their particular child’s share.
There must be a gremlin in the TDF system, as my second post has also had the second part removed. There is no point in my trying to post again, only to have it removed again. I suggest that the TDF administrators search for my two posts and post one of them in full, so that the person who posted can see the necessary drafting.
Thank you for your reply, yes it seems to have cut off the second half of your post again, not sure why but thank you for trying to send this through. Do difficulties arise in terms of the gift failing, if for example at the date of death there was not enough in the son’s share of residue to cover the £x sum specified to pass to the grandchildren, would the gift to the grandchildren fail or still be payable as a general legacy. She wants to ensure that the sum specified for the grandchildren does not end up reducing the daughter’s half share of residue.
The type of arrangement is not particularly unusual in English law wills either.
The wording I have seen splits residue into the requisite number of shares and each share is then treated almost like a mini-will. For example, a half share is designated “John’s Share” and legacies are directed to be paid out of John’s Share with the remainder of John’s Share passing to John or, if the gift to him fails, say, to John’s children.
The legacies will be payable whether or not John survives the testator. If the share is insufficient to satisfy them in full, the legacies will abate rateably
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
The wording that I had proposed in the lost part of my earlier posts had provided as referred to by Paul Saunders. As I had said in my most recent email, if the poster sends me his/her email address, I will forward my post with the specific wording that I would use.
In England this situation most commonly comes up in deeds of variation post-death where one residuary beneficiary wishes to make legacies deductible from his/her share only. You might find some helpful wording in DOV precedents which could be incorporated into a Will
I have had this several times. The simplest and most robust solution is for the testator to leave her whole estate on a discretionary trust where, in addition to family members, there is an independent trustee. You must explain that it is not necessary to have you or an member of your firm as a professional trustee (see the SRA website for guidelines). You must specify your fees for executorship and trusteeship in writing before execution of the will. It is best if the testator signs your letter before the Will and you retain the letter of advice on file. As regards the cost of executorship and trusteeship the Public Trustee (Fees) Order 2008 sets out fees with admirable clarity. You may wish to specify that your costs will be equivalent to those which the Public Trustee would charge under that order if he were appointed. To complement the Discretionary Will Trust it would be best to have a Letter of Wishes which is reviewed and updated by the testator on an annual or biannual basis and whenever there is a change in circumstances. It is probably best to advise the testator in writing not to try to create DIY letters of wishes because she may inadvertantly create problems.
Hi, if, say out of John’s share, there is a gift of £65k to X upon attaining the age of 25, would that gift need to carry the intermediate income, or is it treated as a residuary gift and therefore no?