Will son’s wife inherit my home if he dies before me?

I intend to bequeath my house to my son who is married and has no children. He has not made a will.

My query is should he predecease me, will the bequest transfer to his wife? If so, would she be entitled to the class A threshold rather than class C?

Ms A.Q.

Your question highlights the importance of careful wording in wills to ensure your estate is distributed as you would wish after you are dead – and therefore in no position to clarify. It also raises an intriguing quirk in the Succession Act of 1965 which is the legislation governing inheritance.

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The key thing here is the doctrine of lapse. This essentially states that if someone you intend to inherit on your death dies before you, their inheritance dies with them. If it is the case of a specific bequest – such as the house – the bequest falls into the residue of the will, presuming the will includes such a clause.

The residue clause is really a catch-all saying that, once any specific bequests have been addressed in accordance with the terms of a will, the rest of your estate will be distributed according to the terms of the residue clause.

If there is no residue clause, any lapsed gifts – and anything else not specifically covered by the terms of the will – are distributed as though you died intestate. There is an order of succession in intestacy which effectively means your closest relatives inherit.

So, if your son is to inherit and he predeceases you, any specific asset you leave to him will drop into your residuary clause. That could pass the property on to his wife, some other relative(s) or even a charity, assume you specify who is to benefit from the residue.

If you don’t, in ranking order it will go to your spouse or partner or be shared between them and any other children you have; shared among any other children you have; inherited by your parents if alive; inherited by siblings with the children of dead siblings getting their share; nieces and nephews, other nearest blood relatives. It only moves down the ranking order if the beneficiaries ahead of them do not exist or have died.

You will notice in that rundown that the inheritance is preserved for spouses and blood relatives. There is no provision allowing the spouses of your children to automatically inherit what was originally intended to go to their husband or wife. So, in the scenario you outline, where your son predeceases you, the bequest will not transfer to his wife unless you word your will very specifically to provide that it should.

There is an exception to all that we have said above, a critical one really. If your son was to have children – in his marriage or otherwise – the inheritance of your house would not die with him. This is not the case at the moment as you make clear he has no children but if that were to change, it would certainly alter the dynamics of the situation.

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Section 98 of the Succession Act states that if a child to whom you leave something in your will themselves have children, the law assumes that your child dies immediately after you even where they may have died many years before.

But, despite any children being the catalyst for the exception, those children do not automatically inherit your home. Instead, by virtue of his having children, your home will be treated as part of his estate. That means it will be handled according to any will he made.

Of course, in this case, you say your son has no will. Assuming his wife is still alive when you die and that there are children at that stage, she will inherit two-thirds of your home under the rules of intestacy and the children will share the remaining third.

If he had a will leaving everything to his wife, even though he had children, she would inherit the property in its entirety. He could not make a will leaving everything to any children who might have been born by then as his wife is entitled to a so-called “legal right share” of his estate. In the case of a spouse where there are children, this is one-third of the dead spouse or partner’s estate. Of course, depending on the estate, this might be satisfied from other assets allowing the home to go to the children.

If you felt strongly about these possible outcomes, it is possible to word your will so that your son’s wife does inherit in the event of his demise or that any grandchildren inherit in those circumstances – though in this latter case you’d then need a backup given there are currently no children, unless you want the house to be treated under intestacy.

That brings us to tax.

If you did word the will so that your son’s widow inherits in the event of his death, my understanding is that she continues to be treated for capital acquisitions tax (CAT)/inheritance tax under the category C threshold. This is the lowest threshold, where the lifetime tax-free benefit is currently €16,250.

CAT thresholds are very much framed to benefit blood relations and in-laws are clearly outside that. So they are effectively treated as “strangers” for the purpose of inheritance tax regardless of the closeness of the family relationship. In this case, clearly, that would leave your daughter-in-law with a significant tax bill should she inherit your home.

However, if there were children and so his estate received your home and she then received her share under intestacy, she would have no tax bill as assets passing between spouses or partners are exempt to capital acquisitions tax.

For your son’s children, assuming he was to have any before he died, they would benefit from his category A status in relation to any inheritance his estate received from you after his death – as long as they were under the age of 18 when you die. That means they could each inherit a lifetime limit currently set at €335,000 from him, their mother and you (and your spouse/partner, if relevant).

Depending on what, if anything, they have already inherited from their dead father at that stage, and on the value of your home, they may or may not have a CAT liability.

However, as it stands, all this is academic. Your son currently has no children so if he were to predecease you, neither he nor his wife would inherit your home unless you specifically word the will to allow her to do so. In that case, she would face a significant tax bill.

Oh, and the uncertainties of the various scenarios outlined here illustrate why your son really should focus on making a will.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice