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Which parent died first and why does it matter?

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Published 2 July 2019

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  • Wills & Succession Planning

Whilst the Evening Standard is correct that the law that is being relied on in this case is “little-used”, prudent Will-drafters should always take care to consider the impact of the commorientes rule on clients and, where possible, take advantage of the potential tax benefits.

The commorientes rule determines the ownership of assets where two (or more) people die in circumstances where it is impossible to determine who died first, for example in a car accident or (as here) in an accident in the home. The rule states that the younger individual is deemed to have survived the elder individual and, consequently, the elder individual’s estate passes to the younger individual. However, if it can be determined which individual died first, even if only by a single second, then the commorientes rule will not apply.

There are several important consequences arising out of the application of the commorientes rule that practitioners should consider:

Firstly, the rule only governs the law of succession and does not address any inheritance tax issues as, for inheritance tax purposes, couples are deemed to have died at the same time. Drafted correctly, a Will can allow the elder spouse’s estate to pass to the younger spouse and then on to the younger spouse’s beneficiaries completely free from inheritance tax. This is at the very least a thin, silver lining on what is otherwise a tragic event.

Secondly, a survivorship clause may inadvertently override the commorientes rule, which would have the effect of disapplying the inheritance tax advantage above. The Will should allow for the younger spouse to inherit if they survive for a certain period (for example 30 days), but also if he or she survives under the commorientes rule.

Finally, the commorientes rule applies to gifts in Wills and through the automatic provision of jointly-held property to the surviving joint owner. It does not however apply to inheritances under the intestacy rules if, for example, the deceased did not have a Will.

This is yet another reason why individuals, and particularly spouses, are strongly encouraged to make Wills.

https://www.standard.co.uk/news/uk/stepsisters-in-300k-inheritance-battle-ask-judge-to-rule-whose-parent-died-first-a4175261.html

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Shorter Reads

Which parent died first and why does it matter?

Published 2 July 2019

Associated sectors / services

  • Private Wealth
  • Wills & Succession Planning

Authors

Whilst the Evening Standard is correct that the law that is being relied on in this case is “little-used”, prudent Will-drafters should always take care to consider the impact of the commorientes rule on clients and, where possible, take advantage of the potential tax benefits.

The commorientes rule determines the ownership of assets where two (or more) people die in circumstances where it is impossible to determine who died first, for example in a car accident or (as here) in an accident in the home. The rule states that the younger individual is deemed to have survived the elder individual and, consequently, the elder individual’s estate passes to the younger individual. However, if it can be determined which individual died first, even if only by a single second, then the commorientes rule will not apply.

There are several important consequences arising out of the application of the commorientes rule that practitioners should consider:

Firstly, the rule only governs the law of succession and does not address any inheritance tax issues as, for inheritance tax purposes, couples are deemed to have died at the same time. Drafted correctly, a Will can allow the elder spouse’s estate to pass to the younger spouse and then on to the younger spouse’s beneficiaries completely free from inheritance tax. This is at the very least a thin, silver lining on what is otherwise a tragic event.

Secondly, a survivorship clause may inadvertently override the commorientes rule, which would have the effect of disapplying the inheritance tax advantage above. The Will should allow for the younger spouse to inherit if they survive for a certain period (for example 30 days), but also if he or she survives under the commorientes rule.

Finally, the commorientes rule applies to gifts in Wills and through the automatic provision of jointly-held property to the surviving joint owner. It does not however apply to inheritances under the intestacy rules if, for example, the deceased did not have a Will.

This is yet another reason why individuals, and particularly spouses, are strongly encouraged to make Wills.

https://www.standard.co.uk/news/uk/stepsisters-in-300k-inheritance-battle-ask-judge-to-rule-whose-parent-died-first-a4175261.html

Associated sectors / services

  • Private Wealth
  • Wills & Succession Planning

Authors

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