Last week we looked at section 55 of the Succession Act and some of its core elements. We also set out some of the limitations of section 55 and set out some of the reasons as to why the section doesn’t regularly come across your desk. Having said that, we set out here some of the situations where it may arise for solicitors

Post-death variation

Sometimes s. 55 is used where parties are considering re-arranging assets after death. The section is particularly designed for this. However, the section has limitations in this regard. As noted previously the section cannot be used to alter specific bequests. Further, the nature of the section is such that it is designed for the exchange of identifiable assets for identifiable amounts – car for cash; house for shares; painting for jewelry. While that is all very well, using disclaimers (even with their limitations) tends to be the more preferred route. Particularly where disclaiming for consideration can have sweeping alterations of an estate and does not have to be so asset-specific as s. 55 implies.

Litigation context

One often comes across s. 55 in the arena of contentious matters. It can arise where a personal representative sees the sense of appropriating assets but knows that certain beneficiaries will object. However the personal representative, after weighing up all matters may consider it more beneficial for the estate to bring matters to a head knowing that the appropriation will have to be assessed by a court. The personal representative may wish to expose a beneficiary’s belligerence or use the opportunity of a court hearing to air other estate issues.

In other cases, section 55 may be used by defendants to claim improper procedure by personal representatives or beneficiaries. For example, a deceased may die intestate with substantial assets. However, the personal representative or a beneficial owner may have suggested a re-organization of assets or for other reasons may prefer a re-distribution of assets. For tactical reasons, a beneficiary may wish to act as a plaintiff to control the direction of proceedings and may issue proceedings requesting remedies from the court or other declaratory orders. A defendant in those proceedings may wish to raise “procedural noise” by claiming that s. 55 procedures should have been invoked and that a beneficiary/personal representative has “jumped the gun” so to speak in issuing proceedings while eliding s. 55. The use of section 55 by the personal representative may or may not be appropriate, however, s. 55 could be raised as an issue by the defence to demonstrate undue haste or other improper motives of a personal representative.

Conclusion

You may have a thriving probate practice without ever encountering section 55 head-on, but over the last two blogs, we have explored some of the flavors of the section and may have put “meat on the bone” of your understanding of section 55 and its potential uses.

And remember if you have any probate, will drafting or capital tax issues, please do not hesitate to reach out to me at colm@theprobatehub.ie