Wills, Probate & Succession Planning
Benjamin Franklin said there were only two things certain in life: death and taxes. However, with proper Estate Planning during your lifetime it is possible to limit the taxes which you, your Estate and your Beneficiaries are exposed to.
The standard position is that everybody should have a Will. In the absence of a Will, your assets pass as per the rules of Intestacy set out in the Succession Act of 1964. This leads to the division and, usually, the sale of assets. Some of the other issues arising from not making a Will are set out below.
A Will provides certainty in respect of your assets and beneficiaries on your passing. It also allows a Testator (person making the Will) some control over the tax implications of the Inheritance by ensuring assets pass to those who are in a position to use all avenues to reduce exposure to Inheritance Tax. A Will can also ensure that Guardians and Trustees are appointed for your infant children, protecting them and their assets into adulthood.
The current Gift/Inheritance Tax Thresholds in Ireland are as follows with the balance of the taxed at 33%:
- Spouse - Unlimited
- Child - €335,000
- Niece / Nephew / Grandchild - €32,500
- Stranger in blood - €16,250
At O’Connor O’Donoghue & Co. we engage fully with you to ensure that consideration is also given to the possibility of transfers during your lifetime which would further minimise the tax implications of all of your assets passing on your death. It is important that a full review of each individual is carried out to ensure their income and retirement expectations are not interfered with.
Lifetime transactions allow you to retain control of the transfer of assets to ensure the conditions of the available reliefs are met. An example of some of the reliefs available are as follows: -
Retirement Relief
This relief can allow a person over the age of 55 (or under if meeting certain criteria) transfer a Business or Farm Asset to a Beneficiary free from Capital Gains Tax (CGT). This relief can be unlimited in the case of a gift to a child or up to a max of €750,000 in the case of a gift to anyone else. The rules do not force you to retire completely from the business or farm.
Business Asset Relief
This relief can allow a Beneficiary to receive a 90% reduction in the value of the gift/inheritance received subject to certain criteria being fulfilled. These include certain periods of ownership and class of assets. This can result in a gift/inheritance of far in excess of the tax-free threshold passing tax free once
Agricultural Relief
Similar to Business Asset relief, this relief can allow a Beneficiary to receive a 90% reduction in the value of farm assets being subject to certain criteria being fulfilled. This is a Beneficiary based test which requires 80% of the Beneficiaries assets to be Agricultural in nature following the gift/inheritance. A child receiving a farm worth €750,000 under the current conditions would face an Inheritance Tax Bill of €124,500.00. Proper use of tax planning and Agricultural Relief would have reduced this Bill to Zero.
Annual Small Gift Exemption
A person can receive €3,000.00 from another (no relationship required) tax free each year without reducing their lifetime tax free threshold. Therefore, a child could receive €6,000.00 per annum from his/her parents and still leave their inheritance tax threshold of €335,000.00 intact.
Grant of Probate and Grant of Letters of Administration
It is the duty of an Executor to ensure that an Estate is administered as per the terms of the Will. Where there is no Will this duty falls on an appointed Administrator. At O’Connor O’Donoghue & Co we assist both Executors and Administrators in carrying out their duty in a timely and efficient manner whilst keeping Beneficiaries.
Contentious Probate matters/Contesting a Will
Should you have any query in relation to the validity of any Will or your entitlement to a share in an Estate we at O’Connor O’Donoghue & Co would be happy to discuss the matter with you. These include:
- Section 117 Application of a child where it is felt that a parent has failed in his/her moral duty to provide
- Legal Right Share of a Spouse who has been excluded from a Will
- Promissory Estoppel case where a Beneficiary has acted to his/her detriment on the basis of a promise made by a Testator (Person making a Will)
Contact Us
Should you have any queries in relation to the area of Wills, Trusts or Estate Planning please contact Michael O’Donoghue or Patrick F O’Connor
using the details opposite.
using the details below.
Frequently Asked Questions
Can I exclude my Spouse from my Will?
You can. However, he/she will be entitled to claim a Legal Right Share of your Estate on your death. If you have children, this is up to a maximum of one-third of your Estate and up to a maximum of one-half if you do not have children.
What can I do if I am not happy with a share in my parents Estate?
It is open to a child to bring a S.117 application against the Estate of his/her parent where that parent has failed in their moral duty to make proper provision for the child.
What is an Executor?
An Executor is a person appointed under a Will to ensure that your wishes are carried out and your Estate completed.
What is a Guardian?
A Guardian(s) is appointed under your Will to ensure that any infant children that you have are protected in the event something happens to you.
What is a Trustee?
A Trustee is somebody appointed under your Will or Deed of Trust to maintain and protect an asset(s) belonging to a particular person(s). In the case of an infant child, a Trustee is appointed to hold assets in trust until he/she reaches adulthood.
If I do not have a Will, who shares my Estate?
Your Estate will be divided as per the rules of Intestacy set out in the Succession Act 1964. Please see below.
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