4- Legal Right Share - Notes PDF

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Limits on Testamentary Freedom It was originally thought that a person should be entitled to divide property as and how he or she sees fit. However, the Succession Act 1965 lays down rules regarding how and to whom property can be devised in a will. The Oireachtas, in this Act, attempted to rectify what it perceived to be the social evil of people depriving their families of properties on their death. The Act therefore includes some provisions, which restrict testamentary freedom, especially in favour of spouses and children. Ireland is unusual in a succession law context as despite being a common law jurisdiction Irish succession law applies a comprehensive system of forced heirship for spouses under the Succession Act 1965 The succession Act 1965 and the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 provide for restrictions on the freedom of testation in order to ensure that spouses, civil partners and children are adequately provided for..

Freedom of Testation – a fundamental property right? ‘In a country such as ours which recognises the very special position of the family as a moral institution forming the necessary basis of social order, freedom to disinherit one’s wife and children is a paradox which cannot be defended on any ground.’

Common law areas – have a family maintenance approach- new Zealand Australia and the UK. Varies which family members can make this application. Other dependants can make an application – fixed vs discretionary approach.

RG v PSG unreported HC 1981 – courts held that it still satisfied the requirement in section 9. T appointed wife as executor and left her the entire estate and she pre-deceases him. Partial intestacy. Will was completely inoperative, court held that the will was validly executed – court was clearly influenced by court will to bring section 177.

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There are two kinds of spousal entitlement a) The Legal Share Right b) Appropriation

Legal Right Share of the surviving spouse /civil partner The real driving force behind these provisions was a desire to protect surviving spouses against disinheritance or insufficient provision in the will of the testator. S111 of the 1965 Act (amended by s81 of the Civil Partnership Act 2010) ½ estate (no children) Provides that if a testator leaves a spouse or a civil partner and there are no children then that spouse or civil partner has a right to one half of the estate of the deceased.

If the spouse dies wholly or partially testate and there are children invloved the spouse or civil partner has a right to one third of the estate- 111(2)

The right is known as the legal right and it will have priority over devises and bequests by will and shares on intestacy if there is partial intestacy. -112 Under section 113, The LRS may be denounced by the spouses in an agreement made either in contemplation on of marriage, or in an ante-nuptial agreement. This will be set aside by the Court if it appears the contract was obtained by force or fear or where the spouse renouncing the share did not understand what he or she was doing. 1/3 estate (testator survived by his children) spouse entitled to 2\3 spouse is more generously provided for on intestacy. In Ireland stronger provision than other common law juristictions . family home joint tenants- If one dies- the surviving joint tenancy becomes the old owner – does not pass under the will.

Valued at the date of distribution and nit the date of death when evaluating the legal right share

(What is the position on intestacy?) ‘Net’ estate – all assets joined together

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Property held as joint tenants passes under the right of survivorship Strong v Holmes [2010] IEHC 70 S112 – LRS has priority over other legacies- if I disinherit my husband and left him nothing he can opt to take the legal right share – general request pro rata . Election of legal right What if the testator leaves the spouse a devise or bequest? S114(1) – you can’t take both the bequeath and the legal right share unless its expressed.

Section 114 provides that if a gift is left in a will and expressly stated to be addition to the legal right, the beneficiary will be entitled to both. If no such declaration is made, then the beneficiary must choose between their legal right and the gift, and if no choice is made the act deems the beneficiary to take the gift. The personal representative must notify the surviving spouse or civil partner of the right to choose between the two and this notification must be in writing. A spouse is also entitled to make a devise to their spouse in a will, but one should be careful to clearly express whether or not this devise is in sa sfac on of the LRS, or in addi on to it. If the will does not specify that the devise is intended to be in addi on to the LRS, then that devise will be taken to be in sa sfac on of the LRS (s 114(2)). In such an instance, the surviving spouse may then exercise the right to elec on enshrined in s 115(1)(a), which means that he or she must either elect the gift or the LRS. S115(1)(a)(b) – if you don’t elect to take legal right share you’re deemed to take the bequest – in default of election, the spouse of civil partner takes under the will and does not take his or her legal right share under 111 The personal representative must notify the spouse, in writing, of her right to elect (s 115(4)). The spouse has 12 months from the date on which the personal representatives obtained a grant (either of probate or letters of administra on), or six months from being served notice of the right to elect by the personal representatives, whichever is the later to elect to take the LRS or the gift .

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Per Lyall this may reflect a policy that the 1965 Act only seeks to ensure that the testator leaves a part of his or her estate to his or her surviving spouse, without seeking to dictate how much or how little he or she shall leave, so that the legal right is more in the nature of a guidline.

Re Urquhart [1974] IR 197 – if the will makes provision for her, she must personally elect to take the LRS – otherwise she will take the bequest under the will. The policy in 115 can lead to harsh results as outlined in this case where spouses estate can be left with nothing.

The h and w had made mirror wills – the w left a legacy to her husband on condition that he survived her for at least one month. Both involved in car crash where the wife died instantly , however the husband survived for another day.

Husband survived his wife by a day and the question arose was whether or not the legal right arising on the death of the wife became part of the husband’s estate. Legacy had been left to the husband by this had lapsed as he did not survive the prescribed time in the will.

The w was entitled to elect to take legal right share- question was whether h’s estate was entitled legal right share – had to take under the will – he could take nothing unless he survived – his estate got nothing.

Revenue commissioners claimed that the husband was competent to dispose of his property at the time of his death. However it was accepted by the court he was not competent to dispose of. But it was accepted that the husband’s failure to elect was not relevant for this purpose. The majority of the court

Henchy J dissenting – did not believe that election was a condition precedent to being able to dispose of the interest, since in his view both election and disposition could take place simultaneously.

Walsh J outlined the legal position as follows :

In my opinion, the whole of this structure presupposes and is based on an assumption implicit in the statute, in addition to what is expressly stated in s.111, that a legal right arises on the 4

moment of the death of the testator. Where there is no legacy or devise or where there is legacy or devise expressed to be in addition to the legal share, the legal share vests upon death. But when a testator in his will makes a devise or bequest to a spouse and it is not expressed to be in addition to the share as a legal right, then the spouse has a statutory right to take the share as a legal right – but that share does not vest until he takes it.

Per Walsh J At best the legal share provided by the act of 1965 can be depicted as a statutory offer which is not binding upon the surviving spouse until it is accepted.

O’Dwyer v Keegan [1997] 2 ILRM 401 – Considered the distinction between the situation where a spouse or civil partner left nothing in the will, or left a legacy which is expressly declared to be in addition to the legal right and (2) the situation where a legacy is left, but is not indicated whether the legacy is on top of the legal right.

If no provision is made, the LRS vests on death – difference was that no provision had been made in the will.

h died and wife died later the same day. Wife was in a comma and was unaware of death of husband. His estate was worth 2.5million and he left her nothing. Question arose as to what interest if any did the wife acquire in her husband’s estate under the provisions of Part XI of the succession act 1965 by reason of his death before hers. She had not renounced her rights in accordance with the provisions under section 113.

Whether by virtue of the death of her husband had the wife acquired a half share in the estate of her husband.

The supreme court held that legal right does not depend upon the surviving spouse electing between it and a bequest in a will or share on intestacy, so that, if a testator leaves a will which contains no provision for his or her spouse, the spouse still has the legal right share which vests on death of the testator.

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The court distinguished Urquart on the basis that in that case, the need to elect arose, whereas in Keegan it did not. Barron J quoted with approval the discussion of Walsh J in Urquart.

The surpeme court drew a distinction between cases where the testator leaves nothing to the surviving spouse or there is a legacy or devise but no indication as to whether it is in addition to the legal right. In the case the court took the view that the legal right share vests automatically on the deceased’s spouse’s death in the case, however the surviving spouse is free to choose whether or not to claim the legal right and if he or she does not or cannot make the election between the legal right and the legacy or devise, the benefits conferred by section 111 do not accrue.

Barron J, giving the decision of the Court, held that the proper interpretation of the section was that a legal right share, as defined in s 111, vests on death.

The Court also held that the absence of any procedure for notification of the surviving spouse of his/her entitlement to avail of the legal right share was fatal for the alternative interpretation upheld in the High Court. The Court also noted the importance of certainty in the area of probate so that those making wills would know with certainty as to how their assets would be distributed.

S115(3) – may elect to take legacy of lesser value in partial satisfaction of LRS

Impact of a partial intestacy? S115(2)(a) may elect LRS or legacy plus share on intestacy (b) presumption against LRS Example: Net Estate of €100,000 Will leaves €20,000 to brother and €20,000 to wife (no children). No residuary clause.

Section 56 of the 1965 act provides that where the deceased’s estate includes a dwelling in which at the time of the deceased’s death, the surviving spouse or civil partner was ordinarily a resident, the surviving spouse or Cp may require in writing the personal representatives of the deceased’s to appropriate the dwelling under section 55 or partly in satisfaction of nay share of the surviving spouse or Cp. The same right extends to household chattels.

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If a spouse or civil partner dies testate or intestate the surviving spouse or Cp will still gain this right. The dwelling will got to satisfy the value of the legal right or whatever the spouse may be statutorily be entitled to. The dwelling is appropriated by means of satisfaction on of the surviving spouse’s LRS or intestate en tlement. If the LRS is of equal value to the dwelling, then the process is straigh orward. Where, however, LRS is of lesser value than the dwelling, either the surviving spouse can pay the balance back into the estate or use the shares of an infant for whom the surviving spouse is a trustee. S56(2) includes the right to appropriate household chattels (eg furniture, linen, china, domestic animals)

S56(4) per. rep. must notify spouse in writing of this right of appropriation – does not expire until six months the notification – duty to notify.

Section 55(2) – protection afforded is bolstered by the fact that the right to acquire appropriation is not affected by specific devises or bequests disposing of a family home to a third party.

Rationale for the protection explained by the Supreme Court in H v O per Henchy J The appropriation will ensure that the plaintiff who is widowed and without children will not be condemned to the harsh fate of having to leave the dwelling and seek and new home

This will apply even if the person dies completely intestate. Person can elect to take the family home. Would have to be ordinarily living in it. Won’t need this if the house is held as a joint tenancy. Unless back in early 60’s where it was generally held in the husbands name. inheriting a family home would also be relying on section 56.

S56(14) - a building or part of a building occupied as a dwelling, including any garden or portion of ground attached to and usually occupied with it or required for its amenity or convenience

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The scope of the definition was examined in Hamilton. Here O Hanlon J allowed the appropriation of a home and a five acre field in satisfaction of a surviving spouse’s legal right share. The plot of land was not considered a garden nor to be used for amenity of convenience. It did hold a septic tank and piped water for the house and as a result was considered attached to the land.

Re Hamilton [1984] ILRM 306 – was held to include a five acre field which included a well and septic tank What if the LRS is less than the value of the home? Article – the act harbours many important weaknesses, many of which have not been addressed appropriately. Small estates at issue here where lrs is not enough to appropriate the family home

S56(9)- the surviving spouse may settle up the difference in cash. Can pay money into the estate.

S56(3)- allows the spouse to rely on the share of an infant for whom she is a trustee to appropriate the family home.

S56(10) – in special circumstances of hardship the ocurt may waive the payment of the balance or limit its payment.

See ‘O’Sullivan, ‘Spousal Disinheritance Protections under Irish Law: A proposal for reform’ (2012) Common Law World Review 41(3) 246-280.

opt for a preferential share.

LRS should be supplemented by a right to opt for a preferential share instead (a fixed sum, eg €180,000) which would provide minimum floor of support) to ensure that the surviving spouse is better placed to appropriate the family home.

Could be reviewed every two years.

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The right to appropriate is restricted for certain types of dwellings. Have to make a court application which is onerous on a surviving spouse.

S56(5)(b) – must get the authorisation of the court (must be satisfied that it is unlikely to diminish the value of the other assets of the deceased or make it more difficult to dispose of them in administering the estate). Per Bardy – draughtsman simply failed to address the many ramifications of the legal right to require appropriation as it applies to dwellings on agricultural land.

Restricted Dwellings: S56(6) – where the dwelling forms part of a building, is held with agricultural land or forms part of a guesthouse or hotel, or where part of the dwelling was used for business purposes.

Farm house being problematic. Or where a dwelling is used as part of a business.

Sale may not be envisaged here. Appropriation must not risk drop in value of the property.

Difficulties in appropriating a farmhouse

S56(5)(b) – must get the authorisation of the court (must be satisfied that it is unlikely to diminish the value of the other assets of the deceased or make it more difficult to dispose of them in administering the estate).

Per Bardy – draughtsman simply failed to address the many ramifications of the legal right to require appropriation as it applies to dwellings on agricultural land.

H v H [1978] IR 138 Husband died and left his 113 acre field to his nephew. Subject to the right of his widow to exclusive use of a bedroom in the farm house. No children involved this case. Lrs would be half the estate.

She opted to take the lrs. And also acquired executors to appropriate. The supreme court refused to grant an order under section 56. Onus was on the widow to demonstrate that the 9

appropriation was unlikely to demonstrate the value of the assets or more difficult to dispose and she hadn’t discharged this in the present case.

The supreme court held that the onus of proof under the paragraph lies upon the applicant, secondly the reference to assets of the deceased other than the dwelling includes all assts including those passing to a spouse who has exercised her legal right to ne half of the estate and thirdly the court must be satisfied that neither of the specified eventualities is unlikely to happen.

H v O [1978] IR 194 Appropriation was authorised here. It’s possible to distinguish this case because this case involved to two easily identifiable and severable plots of land. And the court heard evidence from land valuers which would allow courts to make a determination.

See O’Sullivan, ‘The Right to Appropriate the Family Home – A Proposal for reform’ (2013) Dublin University Law Journal 20

A proposal designed to make it easier for a surviving spouse to continue to reside in a farmhouse and reduce the need for a court application.

If the spouse cannot compensate for a drop in value or the farm would be more difficult to dispose of (and an immediate sale of the farm is not envisaged), a statutory right of residence would be conferred on the surviving spouse in full or partial satisfaction of the legal right share provided that the consent of the person inheriting the farm was obtained.

Frequently happens in practise anyways.

In Strong v Holmes Murphy J ruled that the date for valuing the estate in order to ensure that the appropriation is fair to other beneficiaries is not the date of the testator’s death but the date of appropriation ie the date when the estate is being distributed by the personal representatives. Important in times of fluctuating property values.

S113 – LRS may be renounced in writing – prenuptial agreement – or after the marriage but not after death. 10

Why would you lose your lrs – murder etc re section 120

S120(2)(3) a spouse guilty of desertion/ constructive desertion for 2 years or more (up to the date of death) is precluded from taking any share on intestacy or a LRS.

Desertion is if you walk away from other spouse – including constructive dissertation, behave in such a bad way that the other person leaves you-justifies them leaving you. Ie domestic violence. Must have a just cause for leaving.

AB v JB and MB [1991] 2 IR The wife had lived apart from her h for five years before his death. Her reason for living was because she was fed up for receving the same house keeping money since th...