The main goal of estate planning is to effectively transfer wealth to the next generation. Once considered a privilege of the wealthy, estate planning is now important for everyone.
Without a plan, settling an estate can become a lengthy and costly process for the survivors. Estate planning allows you to clearly outline how your assets will be distributed. Without such a plan, the courts will make these decisions, which can take years and incur significant legal expenses. This situation can lead to emotional distress and conflict among family members.
Several common mistakes can significantly jeopardise the effectiveness of your estate plan. Avoid these mistakes by being prepared and well-informed.
Estate planning offers numerous benefits, including:
Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances in Ireland. It applies to the value of gifts or inheritances received over certain thresholds. The rate of CAT is currently 33% (as of July 2024). The amount of tax due depends on the relationship between the giver and the receiver and the gift’s or inheritance’s total value.
The tax-free threshold is the amount you can inherit or receive as a gift without paying CAT. There are three groups, each with different thresholds:
* CAT only applies to amounts over the relevant group threshold. CAT is charged at 33% on gifts and inheritances.
No matter where you are on life’s journey, the choices you make today will impact your family’s future.
Don’t wait any longer! Get a quote today!
The Small Gift Exemption allows you to receive gifts of up to €3,000 per year from any individual without having to pay CAT. This exemption can be particularly useful for parents and grandparents who want to transfer wealth gradually without incurring tax liabilities.
Parents, grandparents, or godparents also use this strategy to support their children, grandchildren, or godchildren in achieving homeownership by providing tax-free gifts for house deposits.
Business Relief: Reduces the taxable value of qualifying business assets by 90%.
Agricultural Relief: Reduces the taxable value of qualifying agricultural property by 90%.
Dwelling House Exemption: Under certain conditions, this exemption allows a beneficiary to inherit a dwelling house tax-free.
Favourite Nephew/Niece Relief: Allows for a reduction in Capital Acquisitions Tax (CAT) when a niece or nephew inherits a business or farm from an uncle or aunt.
Retirement Relief: Allows business owners to reduce or eliminate Capital Gains Tax (CGT) on the sale or transfer of their business upon retirement, provided certain conditions are met.
These reliefs can significantly reduce or eliminate the CAT liability on your estate, making it important to consider them in your estate planning.
Start your Estate Planning process by consulting with one of our financial advisors. We can create a comprehensive plan that meets your needs and protects your beneficiaries. Get a quote today!
A Section 72 policy is a life insurance policy specifically designed to cover the CAT liability on your estate.
The proceeds of this policy can be used by your beneficiaries to pay any CAT due on the inheritance, ensuring that your assets do not have to be sold to meet tax obligations. This policy can be essential to estate planning, especially for large estates.
Section 73 policy is a life assurance policy designed to manage and pay Capital Acquisitions Tax (CAT) on gifts and inheritances.
This policy provides a tax-free lump sum specifically for covering CAT liabilities, ensuring beneficiaries do not have to sell inherited assets to pay the tax.
By using a Section 73 policy, the policyholder can protect the value of the inheritance, allowing beneficiaries to receive the full benefit without the burden of a significant tax bill. This makes Section 73 policies an essential tool for efficient wealth transfer in estate planning.
Deciding whether to transfer your wealth now or later depends on various factors, including your current financial needs, the potential for future growth of your assets, and the tax implications.
Transferring assets during your lifetime can reduce the size of your estate and potentially lower your tax liability. However, it is essential to consider the impact on your financial security and the timing of the transfers.
The fate of your pension after your death depends on the type of pension plan you have and whether you pass away before or after retirement.
Receive expert support securing the best insurance and protection policies here at True Wealth. Taking the first step towards a worry-free future is reaching out to us for a consultation today.
Succession planning is a strategic process that ensures the seamless transition of leadership and ownership within a business.
A robust succession plan mitigates the risk associated with unexpected departures of critical team members, thereby safeguarding your business’ future.
A crucial element of succession planning is key person insurance. This type of insurance policy provides financial protection against the loss of a key individual whose expertise, skills, or leadership is vital to the business’s success. If a key person unexpectedly passes away or becomes incapacitated, the policy benefits the company.
These funds can be used to cover the costs of recruiting and training a suitable replacement, compensating for lost revenue, or stabilising the business during the transition period.
Note that there are differences between life insurance and key person insurance. Several factors need to be considered to determine which is right for your business. Consulting one of our financial advisors is the most effective way to find the best plan for your unique circumstances.
Yes, you can and should update your estate plan regularly or after significant life events such as marriage, divorce, the birth of a child, or substantial changes in your financial situation. Regular updates ensure that your estate plan accurately reflects your current wishes and circumstances.
To ensure the care of your minor children, appoint a legal guardian in your will. This person will be responsible for their upbringing if you pass away. You can also set up a trust to manage their inheritance until they reach adulthood.
A life insurance policy can provide financial security for your beneficiaries, cover estate taxes, and fund trusts. It ensures liquidity in your estate, helping to pay debts and support your loved ones after your death.
Income, Life, Mortgage, Health, Serious Illness Protection
Freephone (1800) 808-808
Maximise your retirement potential and achieve your financial goals with a tax-efficient pension review. Schedule your consultation today with our award-winning advisors and enjoy the benefits of a well-planned financial future.
Make informed decisions. Explore our articles and stay up-to-date.
Subscribe to our YouTube Channel and explore our insights and tips, empowering you to make informed decisions that will not only protect your future and loved ones, while also ensuring you achieve all your financial goals.
At True Wealth, we believe everyone deserves access to expert financial advice, regardless of their current wealth or financial situation. If you have a passion for connecting with people and aspire to thrive in a culture built on trust, integrity, dedication, and excellence, this could be the perfect fit. Let’s grow together!
