Now may be the perfect time to get our legal affairs in order writes solicitor Elaine Byrne
The pandemic may have been a time when many of us have reflected on and considered our legal affairs. In this article I would like to look at various matters which may be on our minds and also to reassure readers that legal services are deemed as an essential service even during level five restrictions and can be attended to in strict compliance with public health guidelines.
One issue is that of a will. A will is used to describe “a document in which a person called the testator or testatrix sets out his or her wishes in relation to certain matters which are to take effect on his or her death”. It is important to remember that your will shall only take effect on your death so that it is open to you, provided you have capacity, to make and update your will as many times as you wish.
Why make a will?
If somebody dies without having made a will, the rules of intestacy apply. These are rules set out in the Succession Act of 1965 which automatically determine how a person’s estate is divided.
So, for example, Joe and Patricia are a married couple with three adult children. If Joe passes away without a will, anything in joint names will pass to Patricia as survivor while anything in Joe’s sole name will be divided as to 2/3 to Patricia and 1/3 to their three children.
In making a will you can determine what happens to your property. You can also pick an executor who is the person or persons who will look after everything after your day.
Potential claims to a will
In making a will your solicitor will guide you through any potential claims that could be made against your estate to include:
– Your spouse is entitled to a legal right share to your estate, being half of your estate if no children and 1/3 if there are children;
– A child can make a claim to his or her parent’s estate pursuant to Section 117 of the Succession Act if he or she can show that that “the testator has failed in his moral duty to make proper provision for the child in accordance with his means whether by his will or otherwise”;
– The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 provides that a qualified cohabitant (a member of a couple for two years or more if parents of one or more dependent children or five years or more in any other case) can bring an application before the court for provision to be made for him or her;
All of us should consider making or updating a will. In particular:
– Parents of young children.
– Parents of a child or children with special or additional needs
– Anyone whose circumstances have changed, remembering that a later marriage can revoke an earlier will but a later separation or divorce can not revoke an earlier will.
– If you have a large estate, it is important to get good tax advice. There is no inheritance tax between husband and wife. Currently a child can inherit €335,000.00; a brother, sister, niece of nephew can inherit €32,500.00 and a ‘stranger in blood’ €16,250 tax free. Anything over these amounts will be subject to inheritance tax at the rate of 33%. Your solicitor will advise you of various tax reliefs for example maximising group thresholds, agricultural relief and business relief.
Making a will is often a good time to consider leaving a bequest to charity. Please give full details of your chosen charity to include the charity number to your solicitor. Registered charities can inherit monies, property free of inheritance tax.
Transferring property during your lifetime
For anyone considering passing on property during your lifetime, the following should be considered:
– Who owns the property, is it in your sole name or in joint names with another; where are the title deeds; is it subject to a charge in favour of a bank and if so will the bank consent to the transfer?
– Are you transferring the whole of the property or part only? If part only a land registry compliant map marking the part to be transferred will be needed.
– You should organise a valuation for the property and this will determine any possible taxes to include any capital gains tax for you, the transferor, any capital acquisitions tax for the person getting the property, the transferee, and stamp duty again for the person getting the property.
– You and the person being gifted the property will need separate solicitors.
Creating an enduring power of attorney
An enduring power of attorney is a mechanism which one can put in place when appointing one or more named individuals known as attorneys to act on your behalf in the event God forbid of a future mental incapacity.
You will need to furnish your solicitor with the following information:
– Your full name and address and your date of birth.
– Details of who you will appoint as your attorney(s).
– Your GP details, having first checked with your GP that he or she will be satisfied to sign the requisite form ‘part E’ confirming you have the requisite capacity.
– Names and addresses for at least two notice parties, one of whom must be a close relative.
When the enduring power of attorney is completed, it is put away for safekeeping and it only reappears if one’s mental health deteriorates to a point where one doesn’t have capacity. The registration process takes in the region of four months and the Application is made to the Office of the Wards of Court, EPA section. A Certificate of Registration will then be available.
Part 7 of the Assisted Decision-Making Capacity Act of 2015 deals with enduring powers of attorney and, for example, Section 75 thereof deals with reports by attorneys. When this act has fully commenced there will be greater accounting obligations on attorneys which is to be welcomed.
Nursing home ‘Fair Deal’ scheme, from a legal perspective
If going to a nursing home you can apply for financial support to help pay for the cost of care in a nursing home through the Fair Deal scheme. When the application process and the care needs assessment have been completed, the financial assessment then comes in to play. This will work out how much you will need to pay towards your nursing home care. You will pay 80% (40% if you are part of a couple) of your assessable income. Assessable income is your total income minus allowable deductions, for example, income tax, PAYE and health expenses. You will also pay 7.5% (3.75% if you are part of a couple) of your assets such as land or cash. The first €36,000.00 (€72,000.00 if you are part of a couple) of your assets is not taken into account.
The following points are worth remembering:
– The family home is taken into account for a maximum of three years (three year cap).
– Any assets transferred within the last five years are taken into account.
– In relation to the farm or business, there is a provision whereby a farmer or business owner can also avail of ‘the 3 year cap’ if certain conditions are met.
Nursing Home Loan
If there are insufficient monies to make the contributions the Health Service Executive (HSE) will help but will require security in exchange, so a nursing home loan can be applied for. If the person applying for the loan does not have capacity, an enduring power of attorney can be registered or a family member can apply to the Circuit Court to be appointed as the applicant’s care representative. The nursing home loan will eventually become due after the applicant’s death and must be repaid within 12 months of the date of death. There are certain circumstances in which payment can be delayed and a partner, relative or connected person may apply for a deferral of the loan repayment.
Please take care during these challenging times. Please God with the roll out of the vaccine we will soon be able to venture out again. In the meantime, now may be a good time to make decisions on legal affairs and get the ball rolling.
Elaine Byrne is a solicitor practising in Regan McEntee & Partners, High Street, Trim, Co. Meath and specialises in probate, wills and estate management. She has extensive experience and expertise in this area, having been enrolled as a solicitor with the Law Society of Ireland in 2008. The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, solicitor Elaine Byrne and Regan McEntee & Partners do not accept responsibility for errors or omissions howsoever arising.