Estate and succession planning helps you determine the best way to transfer your wealth on to future generations. It involves deciding who should benefit from your estate, at what time, and how your wishes should be carried out. It usually involves making a will to set out who should inherit your estate. If you have a complex family or wealth structure, it may involve other steps such as creating trusts or family investment companies. You may also need to appoint professionals to oversee our estate and succession planning. Succession planning can help you:
- Give your family realistic expectations of their inheritance
- Inform the next generation of their responsibilities
- Minimise inheritance tax
- Manage assets in different countries
- Decide how to transfer control of your business and its assets
- Consider how to make provisions for charity
- Plan for the possibility that you may lose your mental capacity to manage your own affairs.
- Appointing professionals to manage your estate.
Charity and Philanthropy
Charity and philanthropy may be important to you. If you want to take care of certain causes, your solicitor can help you structure a plan that suits your needs and maximises the support you can give. This might involve establishing your own charity or foundation,donating to an existing charity throughout your life, or leaving a charitable gift in your will. A professional adviser will ensure your gift or charitable structure complies with legal regulations and is tax-efficient.
Deed of variation
A deed of variation, sometimes called a deed of family arrangement, lets beneficiaries change their entitlements from a will after the person has died. You may wish to do this if you want to transfer your inheritance to somebody else. It may also reduce the amount of inheritance tax you owe. You may only change your share of the estate, although you may need to secure agreement from other beneficiaries or the executor if they are affected by the proposed change.
You might wish to transfer certain assets to other people, give away your entire share, or establish a trust.
Intergenerational wealth management
Planning how you wish to distribute your wealth to family members takes careful consideration. If you have specific wishes for how you want to transfer assets to your family, an expert solicitor can advise you on tools you could use to maximise the benefits and avoid risks. They can help you with:
- Transferring ownership of property
- Leveraging inheritance tax relief
- Financing elderly parents’ care home fees
- Transferring control of your business
- Establishing family investment companies
- Managing risk on investments
- Preparing wills and trusts
- Making provision for the possible loss of your mental capacity to make your own decisions
Family Investment Companies
Family Investment Companies (FICs) are private limited companies established to hold family assets. They can be an efficient way to manage your wealth. Some FIC benefits include:
- Tax advantages
- Greater control over how assets are transferred and what happens after divorce
- Flexible range of assets can be held
FICs may appeal to business owners who already understand company structures, but they can be useful for any family with wealth to invest.
Planning for care home fees
Planning for care home fees allows you to rest easy knowing that you have made arrangements should you ever need to go into care. You will usually have to pay your own care-home fees, which can be extremely expensive. You need to plan for these potential costs, or your home may need to be sold to fund your care, leaving you much less to leave your loved ones when you die. An experienced solicitor can help you plan for care home fees several ways, including:
- Providing advice on any applicable state benefits
- Creating your will in the best way to safeguard your loved ones’ inheritance
- Ensuring both you and your assets are protected
- Helping you to investigate and secure other methods of funding
Severance of joint tenancy
The nature of your ownership of your home is very important. What happens to your financial stake in the property when one of you dies depends on whether you are joint tenants or tenants in common. This has implications for:
- Any remaining mortgage
- The level of funding you can secure for care home fees
- The amount of inheritance tax you are liable for
- How the remainder of your estate is taxed
- Whether you can remain in your home.
Joint tenancy means that the other partner automatically inherits the property when one partner dies. This has obvious benefits, but it could result in higher inheritance tax. It can also make you ineligible for any means-tested benefits, such as support for care home fees.
However, If you are tenants in common, you can leave your share of the property to your spouse, partner or to another beneficiary, or you can put it in a trust. This may reduce your estates tax liability and ensure your partner can remain in the house after your death.
Fair Deal Scheme
The Fair Deal Scheme provides financial support to help pay for the cost of care in a nursing home. If you apply for Fair Deal, your care needs are reviewed to determine that long-term nursing home care is the best solution for you. While you are awaiting funding, you will need to pay privately for your care.
Your financial situation is also examined to ascertain how much you will have to contribute to your nursing home fees. If your contribution does not meet the cost of the fees, the HSE will pay the balance
Assets including savings and property are considered when assessing your financial circumstances.
The scheme funds long-term nursing home care only. It does not cover respite, convalescent care or daycare, although these types of services may be provided in some nursing homes.
Relationships in later life
Whatever stage in life they happen, relationships can be complex. One way to help smooth the path, when things don’t go to plan is to have an agreement in place. Whether a relationship ends because of death or a split, make life easier by formulating a legal agreement to protect both parties’ interests. If you have embarked on a relationship in later life, you may consider one of the following:
A cohabitation agreement is an agreement drawn up between two people who live together. It covers financial and other arrangements for the duration of their relationship or at the end of the relationship (whether because of death or otherwise). The difference between it and a prenuptial agreement is that the parties to a cohabitation agreement are not married and have no intention to marry but are living together.
All cohabiting couples should consider having a solicitor draw up a cohabitation agreement, especially in light of the Civil Partnership Act 2010, which introduced a redress scheme for cohabiting couples. Legal advice will ensure that none of the parties is being forced to enter the agreement.
A couple who intends to marry can make a prenuptial agreement to set out their respective rights with regard to property, debts, income and other assets bought or acquired during the relationship. It details how they will divide their assets and what will happen to their finances if they divorce or separate. The agreement may also cover succession rights, children, custody access, maintenance, and pensions.
The Irish courts do not have to enforce your prenuptial agreement if your relationship breaks down later, which is why it is important for you to consult a solicitor to ensure your agreement includes all the right elements to best protect your interests.
A postnuptial agreement (‘post-nup’) is very similar to a prenuptial agreement – the only difference being that the postnuptial agreement is drawn up after a couple is married. Agreed while the couple is still living together, it allows them to make financial plans should the marriage break down. Similarly, civil partners can enter into a post-partnership agreement.
Planning for retirement in later life
Planning for retirement should start as early as possible to maximise the value of your contributions to your retirement fund. However, it is never too late to start planning for your retirement. The most tax-efficient tool for retirement saving is a pension. If you pay tax at the higher rate of 40 per cent, the relief is received at this rate. This means you will receive €40 back for every €100 you contribute to your pension, up to certain Revenue limits depending on your age.
A Personal Retirement Savings Account (PRSA) is a long-term personal pension plan that allows you to save for retirement in a flexible way. PRSAs are available to most people, but they are particularly useful for people with no pension provision. Your PRSA is a contract between you and a PRSA provider. You can continue to use the same PRSA even if you change employment, and you can move from one PRSA to another at any time, free of charge.