Claims Administration

Having a Will

Creating a will is crucial, yet many people are never getting around to put one in place. Thinking about our own death it is not easy, but as the saying goes, death and taxes are the only certainties in life. If you don’t express your wishes in a valid will and you die intestate, the 1965 Succession Act will dictate how your estate is distributed. This could lead to assets being divided in ways you hadn’t intended. For married individuals with children, dying intestate means your spouse receives two-thirds of your estate, while the remaining third is split equally among your offspring. If your primary asset is the family home, there’s a risk that your children might legally force your spouse to sell their share. Even if you’re legally separated, your estranged partner could still be entitled to a share of your house unless succession rights were waived or extinguished. Remember that divorce doesn’t automatically revoke a will, so consider creating a new one. By addressing these aspects, you can protect your loved ones and minimize potential conflicts.

Don’t delay—create your will today!

Inheritance Tax

Inheritance tax planning isn’t exclusive to the wealthy; it’s a consideration for everyone creating a will. If you leave assets like your home or savings to someone other than your spouse or civil partner, they could be subject to capital acquisitions tax (CAT) at a rate of 33% based on the asset’s value. This might require selling the family home or taking out a loan to cover the tax liability.

For children, the CAT threshold is €400,000. Imagine leaving a child the family home valued at €500,000 (the average price of a two-bed semi in Dublin). In this scenario, they’d owe €33,000 in inheritance tax.

Many people overlook the tax implications when deciding who inherits their assets. Instead of leaving everything to your children, you can strategically include your grandchildren and sons-in-law or daughters-in-law to maximize their tax-free thresholds.

Looking after your life partner

Having a will becomes especially crucial when you’re in a long-term relationship but not legally married. If you pass away without a will (dying intestate), your surviving partner could face significant financial challenges. Without an automatic right to a share of your estate, they might need to seek court provision if they were financially dependent on you. Prioritize creating a will to protect your partner’s interests and avoid potential legal complications.

Keep your Will up to date

Creating a will is often prompted by major life events, such as buying your first home. However, it’s essential to recognize that life continues after you’ve made a will. People enter and exit your life, and various life stages demand adjustments to your will.

For instance:

• When you become a parent, you’ll need to update your will to appoint guardians and trustees for your children.
• Ensuring appropriate inheritance structuring becomes essential.

Remember, if you’re getting married for the first time, marriage automatically revokes a will, unless the will was specifically made in contemplation of marriage.

Importance of Communication

Open communication about wills within Irish families can prevent future disputes. Some parents keep their wills secret or make unfulfilled promises regarding land, houses, or cash. Discussing will contents with family members while still alive can avoid misunderstandings. However, if a parent is vulnerable or pressured by a child, discretion is necessary. Often lack of communication can led to costly legal battles in the High Court.

Ability to make your own decision

Appointing someone you trust to act on your behalf is crucial if you lose decision-making capacity due to factors like sickness, dementia, or accidents. The Enduring Power of Attorney (EPA) allows you to designate an ‘attorney’ (who need not be a lawyer) to manage your finances, property, and make decisions for you. You can grant the ‘attorney’ powers such as selling property, paying debts, and handling banking matters.

The Assisted Decision Making (Capacity) Act, fully implemented in April 2023, introduced various levels of decision-making assistance, replacing the old system that made individuals wards of the court. While theoretically, you can create and register an EPA without a solicitor’s involvement through the new Decision Support Service, the EPA document must include a statement from a solicitor or barrister confirming your understanding of its implications and absence of undue influence.

Resource Links

• Irish Life, Annual Claims Report 2023 (Source: Irish Life)
• Aviva, Claims Statistics 2023 (Source: Aviva)
• Zurich, Claims Paid in 2023 (Source: Zurich Life)
• Royal London, Claims Paid in 2021 (Source: Royal London)
• New Ireland, Claims Statistics 2019 (Source: New Ireland)