Not everyone wants to think about making a will. In fact, very few clients I meet want to think about dying, particularly those who are the younger side of 50.
As a result, the age profile of most of my clients who are making a will is over 50. Generally, as people approach retirement, they start to think more keenly about what they will leave behind after they die. They also think about how they want to provide for their loved ones.
However, I have also completed Wills for people in their 20’s, and on rare occasions for those yet younger. In this blog, I want to briefly explore who can and should consider making a Will, and why this is such an important thing to do.
Why is Making a Will so Important?
There are in my view, 2 main reasons why a person should consider making a Will. The first of these is the main reason people consider it important to make a Will: If you have financial assets, a Will allows you to clearly set out how they’re to be divided.
The second main reason is about dependents – children, a spouse, or a dependent adult you care for: Making a Will has the effect of not only providing financially for dependents. It can also appoint others to step into your shoes, to care for dependents after their death.
There are many life situations where making a Will should be considered, and while each situation is different, there are some key reasons why making a Will is important at various stages of life
Single Parents Making a Will
If you are a single parent, you can use the power of a Will to take care of your most precious possession – your child. A Will can be used to appoint “testamentary guardians” of any children under the age of 18. These guardians would literally step into your shoes to care for the child. Find out more about guardianship for single people here.
Married Couples Making a Will
Making a Will, when married, allows couples to make sure that the other person is automatically provided for if they die. Couples also should consider what would happen if you were both gone. In that event, you can choose guardians to care for your children. You can also appoint Trustees to manage any financial fund which would be available to raise the children. The trust can run until an age of the parents choosing, at which point the children can have access to monies in their own right. This is particularly important to consider in the case of very young children.
Divorced/Separated People Making a Will
It is essential after Divorce that the newly divorced person makes a fresh, or a new Will. It automatically follows upon Divorce and is a standard clause of most separations, that inheritance rights between spouses are extinguished. Therefore, the individual must consider afresh, how they wish to divide their assets on death. They must also consider how, after separation, they now wish to provide for the care of dependent children.
Single People Making a Will
If a person is single, without any dependents, you may have property or other assets. Making a Will allows you to direct the division and distribution of your assets when you die. This can encompass parents, siblings, nieces/nephews or partners.
Taxation Issues and Making a Will
One of the key areas to consider when making a Will is the issue of Inheritance Tax. While a spouse can inherit without any tax liability, this is not the case for other categories of relationship.
Leaving aside special exemptions which may apply in certain situations, the current 2017 thresholds for inheritance tax are as follows. For all inheritances after 12 October 2016:
Group A: A son or daughter of the person giving the gift or inheritance (disponer) can inherit up to €310,000.00
Group B: A parent, brother, sister, niece, nephew or grandchild of the disponer, can inherit up to €32,500.00
Group C: People with a relationship to the disponer not already covered in Groups A or B, can inherit up to €16,250.00.
The important thing to remember is that this threshold does not apply per inheritance but rather to the sum total of all inheritances received in the category. Any inheritance above this threshold is currently taxed at 33%. As a result, many beneficiaries can have very large tax liabilities, and careful Will planning can mitigate this, and sometimes avoid it altogether.
Find out more about thresholds for inheritance tax here.
What Happens If I Don’t Make a Will?
Without a will, a person is deemed to have died intestate. Strict rules under Inheritance Law then apply to the division and distribution of your assets, over which you have no control. These rules prioritise a spouse and children, and provide that a spouse will inherit 2 thirds. The remaining 1 third is divided among children. Where there is no spouse or children, then a deceased persons parents, siblings or indeed nieces and nephews may inherit. Again, this would come under strict rules of division.
What Are the Advantages of Making a Will?
The main advantages of making a will – at any age, in any circumstance – are control, certainty, and peace of mind. The person making the will has full control over how their assets are divided. You can clearly state your wishes and directions. This leads to absolute certainty for those left behind.
It is vital that sound legal advice is taken, as no single situation is the same as another. Making a Will also has certain technical requirements in terms of the content and structure of the document. There are also requirements about the method of completion, which if ignored, can make the Will invalid. This can lead to unforeseen complications and unnecessary cost.
If you have any enquiries about Wills or Inheritance Law issues, just phone us on 0404 67540 or email: email@example.com