| WILLS
AND INTESTACY IN GUERNSEY
Inheritance
legislation is currently being reviewed in Guernsey. The second
consultation paper can be viewed on the States of Guernsey website (click
on this link http://www.gov.gg/ccm/navigation/government/inquiries-and-investigations/inheritance-law-review/).
The second consultation paper invites comments by 31 August 2007. The text
below represents the current position in Guernsey.
It is never easy to think of ones forthcoming death! However, it is important
not to ignore this and a Will should be made by everyone even if you believe
you have very little to leave to your loved ones.
In Guernsey, two different Wills must be made; one dealing with Personalty
this includes such things as savings, cars, boats, shares, business assets,
household effects and personal belongings, jewellery, unpaid legacies,
unpaid earnings, lotteries, life assurance, proceeds and Realty which
relates to houses, buildings or land. The way Personalty is dealt with
is governed by the law of the jurisdiction where the deceased was domiciled
at the date of his death. Realty is governed by the law of the jurisdiction
in which it is situated no matter where the deceased may have died or
been domiciled.
PERSONALTY
There is an increasing trend for spouses to own assets jointly and this
minimises the impact of the entitlement of children in the estate of Personalty
on the death of the first spouse. But, it is still common to find on the
death of the first spouse that certain assets may have been solely owned
or held for the sole benefit of the first deceased.
Debts, funeral and testamentary expenses are paid out of the gross estate
of Personalty.
The "Legitime" is the portion of the estate of Personalty of
a deceased person to which the surviving spouse or children or both are
entitled by successorial right despite any statement in a Will to the
contrary.
If a Will has been made, and the deceased leaves a spouse and children,
then the spouse will receive one-third, the children one-third (the legitime)
and the "Portion disponible" (portion of the testators net estate
of Personalty) may be disposed of as he wishes, notwithstanding that he
leaves a surviving spouse and/or the surviving children (or descendants).
If only a spouse or children survive then the survivors will receive one
half of the estate (the legitime) and the "Portion disponible",
the other half, to the distributed according to the Will.
If there is no surviving spouse or children, (or descendants) then the
whole of the net estate is freely disposable.
If there is no Will and the deceased dies intestate then if there are
surviving children (or descendants) then the one half (if no surviving
spouse) or one-third disposable portion will be inherited by the children
(or descendants).
If the deceased is survived by a spouse then the freely disposable estate
is inherited by the heirs at law of the deceased i.e. next of kin of the
deceased by degree on both the paternal and maternal side i.e. brothers
and sisters. The same rule applies if there are no children or spouse.
It is important to note that a surviving spouse does not inherit the freely
disposable portion when no Will has been made and this emphasises the
importance of making a Will.
REALTY
Rules apply to Realty in Guernsey no matter where the deceased is resident,
was resident or domiciled at the date of death.
The rules only apply to Realty owned solely by the deceased.
If Realty was purchased by a husband and wife "for themselves and
the survivor of them" then the Realty in question will, on the death
of the first spouse vest automatically in the surviving spouse.
The problem only arises when the Realty is owned solely by the deceased.
Entitlement
of the Surviving Spouse to Realty
In law a surviving spouse is entitled to the enjoyment (until remarriage)
of one half (in value) of the Realty of the predeceased spouse (unless
the annual value is less that £200). This right of enjoyment exists
irrespective of the provisions of the deceased spouse’s Will and
whether or not there are any children (or any other descendants).
In reality, there will be very few examples of Realty with an annual value
of less then £200, so only in the most exceptional case would a
spouse (where there is no Will to the contrary) obtain an entitlement
of more than one half of the Realty owned in the sole name of the first
spouse to die.
This law is very harsh. However, it is mitigated by; the fact that most
(but not all) spouses now purchase jointly and for the survivor. However,
it is important to remember, if one spouse inherits some property and
they wish their spouse to legally continue to share ownership, it might
be worth entering into a Conveyance in order to provide the spouse with
automatic survivorship rights.
Children or descendants rarely demand rent from surviving spouses for
the remaining one half of the Realty to which the spouse has no entitlement.
In making a Will, spouses often give the whole of the property to the
surviving spouse and thus most problems are avoided.
Making
the Will
A person can only dispose of his Realty by Will (in any portion that he
wishes) to any one or more of the following:-
1. Surviving spouse;
2. His descendants;
3. Illegitimate children and descendants;
4. Step-children and descendants;
5. Illegitimate children of descendants;
6. Illegitimate children of his own illegitimate children;
7. Illegitimate children of his own step-children.It is important to note
the following with regard to Realty:-
1. A testator cannot bequeath Realty to strangers or charities;
2. He cannot even bequeath his Realty to his son-in-law or daughter-in-law,
his parents or grandparents, his brothers or sisters.If a person has only
one child and no spouse or other relatives within the above categories,
he cannot disinherit this child. A person with no spouse or children and
no other relatives alive save for a grandchild cannot disinherit that
grandchild. A person can miss out a generation, that is give direct to
a grandchild instead of a child. This may be important where a child is
wealthy and may have relevant tax implications.
A person can bequeath all of his Realty or part of it to a surviving spouse
or a right of enjoyment of that Realty.
If the person (beneficiary) to whom Realty has been left by the person
making the Will (testator) dies before the testator then the gift will
not necessarily fail, If the beneficiary has left surviving issue (children
or grandchildren) then they share the gift left to the predeceased beneficiary.
Any expression to the contrary in the Will must override this rule.
Trust
Provision
The Legitime of a child (or descendants) can be placed in trust and the
trustees directed to pay the net income (not permitted to be accumulated)
from the trust properties to the child (or descendants) during such child’s
life and after the child’s death to distribute the capital amongst
the beneficiaries and legatees of the child as if the property has not
been held on trust. Trust provisions only apply to Personalty and does
not apply to the Legitime of the surviving spouse not the freely disposable
portion which can be placed freely in trust for any person and the income
may be accumulated.
Intestacy
When a person dies leaving no Will the legitimate children share equally
(or if that child has predeceased leaving children then the grandchildren
will take that share equally).
The surviving spouse has only the right of enjoyment (usually limited
to one half of the Realty) until death or remarriage.
If a person has no children or descendants, then subject to the rights
of the surviving spouse, the Realty passes by very complex rules, depending
on whether real property was inherited from the paternal line, the maternal
line or the been acquired by purchase, gift or bequest.
Generally under intestacy where there are no children or descendants,
the surviving spouse does not get any more than the limited right of enjoyment.
It is therefore particularly important for childless couples in Guernsey
to make a Will.
Real property passes to siblings of the deceased spouse and failing that
to even more remote kin.
Parents of the deceased spouse will only inherit the deceased Realty if
they have no other children or remoter descendants alive.
Divorce
This ends a marriage and a divorced spouse has no automatic right in the
estate of Realty or Personalty of the deceased ex-spouse.
Judicial Separation
Sometimes when a marriage breaks down, the spouses may obtain a Decree
of Judicial Separation. This does not terminate the marriage, and merely
confirms that the parties no longer have to live together. Often in a
Deed of Judicial Separation, the spouses renounce or modify their entitlement
in the estate of Realty or Personalty of the other. It may be relevant
to consider making a new Will after a Deed of Separation has been pronounced.
Illegitimate Children
Special rules apply:-
If an illegitimate dies without legitimate issue or descendants and no
Will has been made then Realty vests in the Crown subject to the rights
of the enjoyment of the surviving spouse. With Personalty, the surviving
spouse receives the one half legitime and the remainder is vested in the
Crown.
The usual rules apply to Realty and Personalty where an illegitimate is
survived by legitimate children (or descendants).
Claims Against the Deceased Estate
It is important to note that claims against the estate of a deceased person
becomes statute barred after six years. But provided the deceased died
in Guernsey, then it is possible by following certain formalities, to
limit claims to one year and one day.
Failure to make a Will can (under the laws of Guernsey) cause real problems
to surviving spouses who are not joint owners. Also, the administration
of an Intestate estate costs more and thus leaves less for the beneficiaries
to inherit. In all the circumstances, it is safer to make a Will. A testator
must be over 18 years old.
Once a Will has been made; a Will of Personalty may be witnessed by any
two people (not beneficiaries) but a Will of Realty must be witnessed
by two Jurats of the Royal Court. It is possible to store your Will either
at your advocate’s office, or a bank or even keep it at home.
If you change your mind then it is very easy to re-draft the Will. Or
if it is only a minor change to add to it with a Codicil.
F Haskins & Co deal with all aspects of Will making and if you have
any queries or wish to discuss making a Will please contact us at these
offices.
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