Appropriation of Assets by the Executor and Section 55 of the Succession Act 1965 – Part 1

25 April 2024

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As sections go in the Succession Act 1965 s. 55 is rather lengthy and on first blush appears to be of great significance. The reality is that is rarely features in practice. Why is this? Rather than looking at why it does or doesn’t come up in practice, today’s blog and next week’s blog will look at some of the occasions where s. 55 comes up in practice, which are generally quite narrow. Which will hopefully explain why solicitors don’t tend to bump into s. 55 every day or at least when they do, they have to dig out the textbooks and refresh themselves of its content

Background

For the solicitor in general practice he or she would be generally aware that s. 55 is the provision in the Succession Act that allows an executor to swap around benefits in an estate and use one asset in an estate to satisfy a bequest to a beneficiary. The solicitor might be aware that there is a notice provision in the section but beyond that, he or she may not have much cause to deal with the section.

Features

The solicitor would be generally correct in that assumption, subject to some points of clarification. The most important clarification being that section 55 cannot affect prejudicially any specific devise or bequest. This is contained in section 55(2).

So if a car worth €20,000 has been left to Sean in a will, s. 55 cannot be used to appropriate an antique painting in satisfaction of the car. Likewise, if a bank account in AIB Stillorgan with account no. 87938762- has been left to Susan in a will, the section cannot come in aid.

However the section can be used in aid of general bequest. So if there is a bequest of €20,000 in a will and there is a car in the estate worth €20,000 which forms part of the residue and not bequeathed under the will, then the car can be used to meet the €20,000 bequest. That is because the bequest of €20,000 is a general bequest. (This is sometimes referred to as “pecuniary legacy” or a “pecuniary bequest” it would means the same). The important point being is that a bequest of €20,000 while it refers to a particular amount of money is not a “specific” bequest.

The other key element of section 55 is that the appropriation can not occur unless notice is served “on all parties entitled to a share in the estate”. While that appears to be an onerous enough obligation, it would appear to be relatively academic, because it would be a brave executor that would go about swapping shares in an estate without discussing it with the beneficiaries in any event.

Finally while the section contains other elements and features importantly sub-section (16) indicates that the section applies to both testate and intestate succession.

Contact with Solicitors

Most solicitors regularly come in contact with s. 55 even though they may or may not be fully conscious of its provisions. That is because disapplication of the notice requirements tends to be a standard clause in precedent wills (particularly those available under the precedents maintained by Bloomsbury Professional Online and known colloquially as the “Mary Laffoy” precedents.) So even though the statute contains onerous notice provisions, there is nothing in the section preventing the testator from disapplying those provisions and those provisions are regularly disapplied as a matter of course. However, having said that, even though the notice provisions are regularly disapplied, executors must still be advised to proceed with caution and seek the views of beneficiaries prior to conducting any appropriation. The benefit of having the notice provisions being disapplied means that appropriation still can proceed even if, say, some of the beneficiaries may be difficult to locate or have diminished capacity. That is not to say that those beneficiaries will loose out or have their benefit reduced, but it does give the executor the flexibility to re-distribute if needed.

Conclusion Part 1

Appropriation in one sense happens all the time in estates. Parties decide to take one benefit over another or “swap” items internally. This generally happens organically in estates and with the agreement of all beneficiaries. What s. 55 brings to the table in these arrangements is that it has engrained in practice the requirement that all beneficiaries are informed and consent to any re-distribution of assets in an estate is done as a matter of course.

Hope this helps and further insights into section 55 next week. In the meantime if you have any probate, tax or will drafting queries please do not hesitate to email me at colm@theprobatehub.ie or make contact through the solicitor query service on our site.