Do you have a Will? If so, when was the last time you reviewed it? Are you sure it’s up to date?
These questions are even more relevant in light of a recent case in the High Court involving the Will of the late John Cronin. John Cronin was a bachelor farmer from Co Kerry who made his Will on 12th December 1990 and died on 11th October 2013. He had not updated his Will in over 23 years. Under his Will, he left his farm and Kerry Co-operative shares to his nephew Thomas O’Connell. The residue of his Estate was left to his eleven siblings.
The question arose in the case as to whether the reference to Kerry Co-operative shares included the shares which John Cronin had in Kerry Group plc, (a separate company) at the date of his death. Mr Cronin had 1,411 shares in Kerry Co-operative in 1993. At the date of his death, the shareholding in the Co-op had reduced to 390 shares, but he had received 8,937 shares in Kerry Group plc.
The shareholding in Kerry Group plc arose as a result of the cancellation of shares and various spin outs and reorganisations between Kerry Co-operative and Kerry Group plc over many years. At the date of the proceedings, the Kerry Co-op shares were said to have a value of €272,438 while the shares in Kerry Group plc were worth in excess of €1,050,000. This case was brought to seek the directions of the High Court as to whether the shareholding in Kerry Group plc passed to Mr Cronin’s nephew, Thomas O’Connell as a result of the bequest of the Kerry Co-operative shares. If the shares did not pass to Thomas O’Connell, they fell into the residue of the Estate which was to be divided between Mr Cronin’s surviving siblings and thirty other nieces and nephews (who were to benefit as a result of the death of seven of Mr Cronin’s siblings prior to his own death).
Thomas O’Connell argued during the case that it was his uncle’s intention that all of the shares should pass to him. The High Court had to decide whether extrinsic evidence, which can be taken into account if there is a contradiction in the Will, should be considered. The High Court held that the plain meaning of the text of the Will should be applied. The judge was satisfied that the evidence was not cohesive enough to allow her to conclude that Mr Cronin was unaware of his separate shareholding in Kerry Group plc. The argument was made that Mr Cronin did not have any say in receiving the Kerry Group plc shares and that the Plc shares should in some way be treated as equivalent to the Co-op shares. However, the judge dismissed this argument.
The judge ruled that the Kerry Co-operative shares passed to Thomas O’Connell as a result of the bequest in the Will and separately, the Kerry Group plc shares passed to the people receiving the residue of the Estate.
This case highlights the vital importance of ensuring that Wills are reviewed periodically and kept up to date in light of changing circumstances. We would recommend that Wills are reviewed at least every 3-5 years or as a person’s circumstances change. Such changes in circumstances could include changes to family circumstances as well as changes to the assets in the Estate.
The case also highlights the importance of having a carefully drafted Will to deal with changing circumstances, particularly in relation to shareholdings in companies which can change over time. Many companies undergo take overs and mergers and shares in one company can be replaced and substituted by shares in another company. For example, the situation in this case is not unique to Kerry Co-operative – a similar process has been taking place over several years with Glanbia Co-operative Society Ltd and Glanbia plc.
The general rule is that assets which no longer exist or which a person no longer owns at the date of their death cannot therefore pass to a beneficiary and therefore the beneficiary loses out.
If you have not reviewed your Will in some time, now might be a good time to do so. Please do not hesitate to contact Owen Burke email@example.com for assistance with reviewing and updating your Will if necessary.Back to Full News
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About the Author
Owen is a senior associate solicitor, Trust and Estate Practitioner and Chartered Tax Adviser in the Private Client team at Hayes solicitors. He specialises in Wills, Probate, Succession and Tax Planning and Enduring Powers of Attorney. He is a full member of the Society of Trust and Estate Practitioners (STEP). He is also a member of the STEP Ireland committee and the Dublin Solicitors Bar Association Probate and Taxation Committee.