Resources

If you make a will you are ensuring that:

Your estate is manageed as you would wish;
You can plan your tax affairs can be availed of;
Your business assets are protected and you have as much control as possible over where they end up;
That you estate is managed in a timely way and keeps costs down.

Making a will is something that most people agree is an important thing to do. However, many people simply put it on “the long finger”. There are very good reasons for making a will which are discussed below.

Executor V’s Administrator

A person who makes a will is usually known as “a testator”. By giving clear orders a testator will be able to pick the person or persons he or she wishes to act as his executor. The role of an executor is an important one. The executor has to carry out the terms of the testator’s will and finish the management of the estate. The person chosen is usually done so for their trustworthiness or professionalism.

In the absence of a will the law determines who is be responsible for the administration of the estate. This person is be known as the administrator. Because the deceased does not choose the administrator the law treats him (or her) with caution. The estate is obliged to get an insurance bond insuring double the value of the estate against any loss caused by virtue of the fact that the deceased did not make a will or did but the chosen executor(s) has predeceased the deceased. Insurance bonds can be expensive and can take about one month to get. This can delay the administration of the estate and add to the costs of managing the estate.

The Will

The testator has, subject to some statutory restrictions discussed below, full control over who receives what from the proceeds of his or her estate. This means that the testator may be able to structure the will in such a way as to minimise any inheritance tax that may arise for the beneficiaries. There are certain tax free thresholds as follows:

Testator’s surviving spouse – all amounts received are free of inheritance tax
Testator’s children may receive approx. €450,000 tax free
Testator’s blood nieces/nephews can each receive approx. €45,000
While strangers in blood can receive approximately €25,000

By making a will the testator may also seek to avail of business and/or agricultural relief, favourite niece/nephew relief or co-habiting property relief.

It should be noted that the testator’s freedom to deal with his estate is restricted by statute. For example, a testator cannot exclude his lawful spouse from benefiting under the will. A spouse is statutorily entitled to a 1/3 share in the testator’s estate. This is called “the legal right share”. Please note that any assets or property, which are jointly owned by the testator and his spouse do not form part of the estate of the testator.

Generally, the legal right share of a spouse can be renounced by an anti or post-nuptial agreement. However, a spouse retains a residual right to seek provision out of the estate upon the death of his/her deceased spouse.

A child of a testator does not have any automatic entitlement to a share in the estate. However a child can pursue a section 117 action against the estate on the basis that the testator has failed in his/her moral duty to provide for the child. The court in determining the case takes all factors into consideration. These factors may include the number of children, their stage in life and financial prospects, the education received by any children and also any benefits already received by any children during the lifetime of the testator. Where a will is not made by an individual then the child’s/childrens’ share is determined by statute and consequently no child/children can bring a section 117 application.

No Will

If no will is made then in addition to the deceased having no say in who should administer the estate the law sets out who the beneficiaries are and what their rights are. For example, where a deceased not having made a will is survived by a spouse and children the spouse inherits two thirds of the net estate and the remaining one third is divided equally between the children.

Summary

If you make a will you ensure that:

Your estate is administered as you would wish;
Tax planning opportunities can be availed of;rnYour business assets are safeguarded and you have maximum control the eventual destination of them;
That you estate is administered in a timely and cost efficient manner.


  • Linked In
  • Google