Gabriel Toolan, as Secretary of the County Leitrim Solicitors Bar Association, gave a talk in respect of the importance of making a will and the related topic of Enduring Powers of Attorney.
Steps to be taken when making a will
1. First and foremost one should consult a solicitor when making a will. There is great emphasis nowadays on the DIY approach in all quarters of life. People feel that a will should be a straight forward matter and they can simply make their own will and indeed there are DIY will kits available both from Eason’s and on the internet. Such an approach may suffice and may be suitable for one’s purposes; however solicitors are experts in dealing with testamentary affairs and bring with them many years of experience of the important points to be considered when making a will.
2. The immediately important considerations that one must address when making a will are:
i. To identify all of one’s assets
ii. To identify the entire pool of all of those persons who are both related and close in proximate terms
iii. To appoint an executor (male) or executrix (female). The role of the executor/executrix is to ensure that the instructions that you have given in your will are fully carried out. This is an important function and this role must be entrusted to somebody whom you trust and are satisfied will carry out your intentions scrupulously.
2. The next step is to identify one’s assets. In this regard it is important to ensure that you instruct your solicitor as to all assets that you have and indeed all assets to which you may become entitled to. All assets must be properly and clearly identified so that no confusion arises with regard to their description. If one has a house and lands and other properties, copies of the deeds of the properties should be made available to the solicitor so that they may inspect ownership of the property. Sometimes people do not fully own their property being that their title is out of date, has not been brought forward or there may be other difficulties with the title which a solicitor is specifically trained to identify and to resolve. In relation to bank accounts it is important again to identify bank books and statements and to make copies of same available to your solicitor when making the will so as to make ownership again clear. Sometimes people have placed their accounts into joint names for the purposes of convenience with relatives, not with the intention that the other joint account holder would become the eventual owner thereof. This can lead to enormous legal difficulties later on.
3. The next step is to clearly identify those persons whom you want to benefit. Obviously the foremost consideration in this regard is to benefit those who are close family members or loved ones. Against this background one must also give careful consideration to taxation issues because this is a very complex and potentially troublesome area. Persons in different degrees of blood relationships are entitled to take different levels of benefit, for example a spouse may inherit unlimitedly without payment of tax. A child may inherit property to the value of €225,000.00. A nephew or niece or grandchild may inherit sums to the value of €30,150.00 and persons who are of no blood relation may only inherit €15,075.00. It is to be noted that once a beneficiary exceeds the above thresholds tax is payable at the rate of 20% on the totality of the inheritance beyond that threshold. In these times of property values having become greatly inflated over the last ten years, many people are now in the tax net when heretofore they would have been free of such burden. The tax burden can be so extensive nowadays that it may become necessary to sell portions of property. This can cause great difficulty. With expert tax advice and planning from ones solicitor one can frequently greatly reduce the tax burden and indeed occasionally eliminate it altogether. Tax advice from ones solicitor in matters of inheritance is very essential and must not be overlooked or left to chance.
It is a general misconception that a will is only to be made when a person is in poor or failing health. Indeed in County Leitrim there was always a long held belief particularly amongst older people that it was only when one had no prospect of recovery from illness that it was time to call for the solicitor and perhaps the priest to sort out one’s mortal and heavenly affairs. In this modern age nothing could be further from the reality. There is a much greater awareness and understanding amongst people and indeed amongst young people of the absolute necessity in having ones affairs under control. There are many reasons for this:
1. Due to the much greater level of prosperity in the Country, people own properties at a much younger age. Ireland has a very high incidence of property ownership unlike other countries in Europe where the family home is frequently leased. In this Country there has been a very significant tendency for young people to own their own home. For this reason it is necessary to ensure that proper succession plans are put in place. Furthermore many people own second properties, own properties jointly with other persons by way of investment or own properties abroad and for all of theses reasons the fact that people own more property gives rise to the necessity to plan the future ownership of such properties.
2. Within the context of a family it is essential that the owners of property have clear and definite plans as to how their property should pass into the future. It is most essential to make provision for unexpected ill health or tragedy and the best and most simple way of doing this is to make a will.
3. It is frequently the case that there are persons within a family who may require preferential treatment in terms of care and attention and support and perhaps maintenance. Such persons may suffer from disability, be it physical or mental or have some other overriding reason as to why they may require greater accommodation to be made for them. This is something that must not be left to chance. Frequently it has occurred that no special provision has been made for persons who are in need of it and this can cause enormous hardship and disadvantage. A will is the ideal mechanism to ensure that such provisions are properly thought out.
4. Another reason why the making of a will is utterly essential is the complexity of family arrangements that now occur. With the advent of firstly, Judicial Separation and more recently the implementation pursuant to the Family Law Divorce Act 1996, family break-up is now something which is much more a reality than heretofore. We now have situations where persons enter into second relationships and perhaps have a child or children from their first relationship and very careful provision has to be made to accommodate both the first and the second family. The position can be more complex due to the mobility of persons now in these times wherein persons may have obtained divorces in America, Britain or Europe and all of these matters can have a bearing within the Irish Legal Framework. Accordingly it is essential when seeking to plan ones affairs that legal advice is taken from an expert in the field namely a qualified solicitor who would be able to advise as to how one can best plan out ones affairs. An essential tool in such planning is a properly drawn up will taking account of all of the circumstances of ones family and their own individual requirements.
Advantages of a will
A will is a very flexible arrangement. The purpose of a will is that it gives expression to the intentions of the will-maker (known as the testator if it is a man or testatrix if it is a woman) as to what will become of their assets or property upon their death. It is essential to understand that the will does not come into effect until the person dies. It is also important to understand that the will can, at any time, be altered or changed by the testator/testatrix. This is of enormous value because inevitably a person’s circumstances change throughout the events of life and a will gives enormous flexibility in this regard.
Solicitors generally advise that persons should make several wills throughout the course of their adult life. For example parents of young children should, irrespective of what property they own or do not own, should make a specific will. The general formula for a will in such circumstances is that each parent, father and mother, would make a will leaving the entirety of their estate to each other. They should also make provision that in the event of a tragedy that both parents lose their lives, that they would, by their will, appoint testamentary guardians and trustees. Such testamentary guardians and trustees would act in the role of parents and ensure that the children are brought up within a settled and stable home environment. The assets of the original parents would then be available to the trustees and guardians specifically for the purposes of ensuring that the needs and requirements of the children are catered for. It is important to know that the trustees and guardians may not use the assets for their own benefit but they must use same for the benefit of the children. Such a will would normally contain discretionary provisions in favour of the trustees so that they could look after any special needs of the children and also they would have powers such as to liquidate assets to pay for educational expenses and other requirements of the children that would arise. When the children would then reach a certain age perhaps twenty-one or perhaps at the conclusion of third-level education, the assets which had been held in trust for them by their trustees or guardians would be released to them absolutely. The importance of such a provision cannot be underestimated particularly in this era when road traffic casualties and indeed tragedies on holiday are frequent and common place occurrences in modern society. Having made such provisions gives the family a great sense of security and also ensures also, that in the event of the ultimate tragedy that the children are cared and loved for by persons specifically chosen by the original parents.
A will can then later be made if and when it becomes clear to the parents whom it is they specifically want to benefit with specific assets during their lifetime. This will should then be reviewed periodically, say every ten years so as to take into account changed circumstances. Ultimately when a person reaches their ripe old age they can make what they consider to make a will to give effect to their final instructions and intentions.
It is worthwhile mentioning the importance of having made a will particularly in the circumstances of a family where there is a person who has special needs, be it in terms of physical or mental disability, learning disability or some other requirement that would necessitate special provision being made. It maybe that a fund or portion of ones assets can be set aside to be held in trust by ones executor and the executor would then oversee payments on a discretionary basis to ensure that a person with special requirements are catered for.
Another feature of modern society is the fact that persons now enjoy much greater longevity. A consequence of this is that a person’s physical health remains good although in some instances a persons mental health deteriorates and this has resulted in a much greater prevalence of senility, dementia and Alzheimer’s disease etc. It is essential that provision in ones will be made to cater for untimely death but it has been identified many years ago that a will was somewhat lacking in making any provision for circumstances that might occur where a person is no longer mentally capable of looking after their own affairs. It was with this specific problem in mind that the Enduring Powers of Attorney Act was passed in 1996 which specifically caters for this situation.
Enduring Powers of Attorney
Solicitors will now recommend that in addition to a person making their will that they should also give some thought to making an Enduring Power of Attorney. An Enduring Power of Attorney is a document which a person, who is of sound mind, signs entrusting the control of their material affairs to a trusted person if and when the person making the Power of Attorney falls into poor mental health. When that persons doctor certifies that the person is no longer able to manage their affairs due to mental incapacity the person known as the attorney can then lawfully take charge of that persons affairs. As stated above it is frequently the case that persons now enjoy longer life but may suffer from ill mental health and the enormous advantage conferred by an Enduring Power of Attorney is that a persons everyday affairs can be looked after as before. In other words the person known as the attorney may pay bills, ensure payments to nursing homes are paid for and can look after medical requirements and make all manners of personal care decisions on behalf of the person who is unwell. This is an enormous advantage because in the past it was necessary in such circumstances to have a person made a Ward of Court which was an extremely cumbersome procedure which necessitated an application to the High Court and which was very costly. The procedure under the Enduring Power of Attorney Act 1996 is much less cumbersome and enables a speedy application to be made to ensure that an attorney can take immediate control of a person’s affairs. The person making the Power of Attorney can be totally assured that their affairs are totally protected as the attorney is under strict powers of supervision and trust to ensure that all of the affairs are managed solely and exclusively for the person of that individual.
Again your local solicitor is fully qualified, trained and experienced in advising clients of precisely of how to set up an Enduring Power of Attorney and how to arrange, plan and organise a testator’s/testatrix’s affairs for their benefit. In County Leitrim there are a total of 16 legal practices situated in all of the towns of the County and solicitors are always available to advise on these issues and to give of their time and expertise to ensure that a persons affairs are structured in a sensible, appropriate and tax efficient manner.