Bereavement due to sudden death can mean spouses or partners having to face sudden legal issues as well as emotional and financial turmoil. That’s at a time when they are least able to cope. But a few simple steps can make things a lot more manageable in the event of sudden illness or untimely death.

Property in joint names

Many people incorrectly assume that if they are married, their spouse automatically owns half of what they own. That is not the case. Unless property is legally transferred into both their names as co-owners, they have no automatic ownership rights.

Consequently, it would be worth considering transferring property into both names. Property can be held as either Joint Tenants or as Tenants in Common.

In the case of joint tenancy which would be typical of how property is held between spouses, the property will automatically pass to the surviving spouse on the death of the other co-owner. The benefit of this is that it can avoid probate having to be taken out in the event of the death of one of the co-owners. The drawback is that if the co-owner intended the property to transfer to someone else such as leaving a farm to a son or daughter under a will, that will not take effect as the property would automatically go to the spouse.

In the case of tenants in common, which would be typically how siblings hold property, the property will not automatically pass to the other co-owners in the event of a death, but would rather pass to whomever that person left their property to in their will.

Retirement Relief

If the land is in joint names, it is important to ensure that both owners are regarded as trading as farmers. This means asking your accountant to ensure that both spouses are registered for tax with Revenue as farmers and the farming income is returned in both names. This is especially important when it comes to succession and passing on the family farm to the next generation as the owners will have to be able to avail of Retirement Relief if they pass the assets while they are alive, as opposed to a will.

In order to avail of Retirement Relief, both owners need to be able to show that they have owned and farmed the land for 10 years prior to transfer. If both owners are not registered for tax as farmers, they might struggle to prove that they are farming for the requisite 10 years.

It would be important also to put the herd number into joint names and also the entitlements. A good time to do this is the start of the calendar year when the DAFM payments have already been made. Again it’s something your agri advisor should be able to help with as part of the annual BISS application.

Succession plans

It is worth having a conversation with your spouse as to what your wishes would be in connection with the farm, should something happen unexpectedly. It can be really difficult for a widow/widower to have to make those big decisions, not having their spouse as a trusted advisor to bounce ideas off.

Often they are left wondering what their spouse would do were they alive. So having the conversation to say whether you would be comfortable with the farm being leased or sold or indeed whether it should be divided up or left to one or more children or nieces/nephews should be discussed.

While you might not know at this stage how to divide up assets between a family, having a conversation to give your spouse a steer could be invaluable in terms of helping them to make a decision.

Wills and EPAs

Without a will, your assets will be divided up according to the rules of intestacy. This means that if you are married and have children your spouse would be entitled to a two-thirds share, while the child or children would be entitled to the other one-third share. In the normal course, the children would disclaim their share leaving the spouse to inherit the entire and thereafter decide what way the assets would be distributed amongst the family.

However, if the children are under 18 years of age, they cannot disclaim their share as they do not have capacity and so automatically become co-owners with the parent.

This causes legal and tax problems trying to deal with the asset until they are old enough to make decisions. So, it’s really important to have a basic will if you have young children.

The most common will in this situation is leaving property to each other and thereafter in trust for the benefit of the children until the youngest child is 21. An Enduring Power of Attorney (EPA) is important to allow someone make decisions on your behalf should you lose capacity but are still alive.

I would recommend appointing those benefiting under the will, normally the spouse or children to be the executors under the will, as it is in their interest that the estate would be administered promptly. They should be informed where your most up to date will is (normally a solicitors office) but they do not have authority to know anything about the will until the person dies.

I would also recommend that you keep a spreadsheet detailing assets, bank accounts, details of professionals (accountants, agri advisors, bankers, solicitors), passwords, etc, so that the executor has a lot of that information to hand to ensure the estate is administered efficiently. Naturally, this spreadsheet and your will should be reviewed intermittently to ensure that it is up-to-date and reflects your wishes especially if your circumstances should change.

It is difficult to know what to put in your will but if you think ‘who would I like to benefit if I was struck down tomorrow’, it helps to focus minds. We are all aware of situations where people did not have wills made or updated. Do the planning now and ensure that this is not the legacy you leave behind you.

Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors does not accept responsibility for errors or omissions howsoever arising. E-mail aisling@agrisolicitors.ie