Only 30% In Ireland Have Put A Will In Place

Making a will is important in farm succession planning.

As Benjamin Franklin, one of the founding fathers of the United States said: “In this world, nothing is certain except death and taxes”.

Hence the importance of a will, a document that sets out a person’s instructions on how they wish their assets and belongings to be distributed upon their death.

A recent survey found that only 30% of Irish people have put a will in place.

If you die without having a valid will in place, distribution of your assets will be made in accordance with the rules of intestacy.

These rules may not reflect how you would have wished your assets to be distributed. For a married couple, the surviving spouse may not receive all of your estate. For that co-habiting, where your partner is not your legal spouse, rules of intestacy will not automatically provide financial protection for your partner.

If you are married and do not have a will in place, your spouse will inherit the entirety of your estate, if you have no children.

If you have children, however, your spouse would get two-thirds of your estate, with children sharing the remaining third.

If you are not married and have no children, your estate will pass to your parents, if they survive you, and if not, to your siblings.

There are many advantages to making a will:

  • It is an opportunity to make your wishes known. Without a valid will in place, your assets will be distributed according to the rules of intestacy and you will not have a say in who inherits what.
  • It is prudent to have a will in place if you have young children, to appoint guardians if you should pass away, and to appoint trustees to look after monies until children become of age.
  • Careful succession planning may reduce the inheritance tax payable by your beneficiaries.
  • For an unmarried couple, it is an opportunity to ensure your partner is provided for.
  • Drafting a will allows you to choose the executor who will deal with administration of your estate. If you have no will in place, this also passes to those entitled under the rules of intestacy.
  • A will can eliminate the possibility of disputes between family members, as it gives a clear and accurate representation of what you wish to happen with contents of your estate. Disputes lead to family tension and can increase legal costs.
  •  You can set up a trust for any vulnerable family members such as those with special needs such as a mental or physical disability or a person with addiction issues.
  •  If you have a child who has worked in a family business, such as a farming business, and you have promised that particular child the business in time, it is critical that you put a will in place that reflects your wishes, so that child is not left in a vulnerable and difficult position should you die unexpectedly.

To make a will, your solicitor will ask you basic details about your family outline, who you wish to inherit under your will, any charitable bequests you may wish to make, and make an inventory of assets (such as pensions, insurance, bank accounts, any properties you hold in your own name or jointly with another person) to ensure that everything is dealt with in your will.

It is important to remember also that a will only speaks from death.

Therefore, during your lifetime, you can make a will, revoke it, and/or amend it, as frequently as you wish.

No one wants to think about a time when they will no longer be around, but it is important to execute a will to ease the hardship on your family and friends if you should pass away.

It is an inexpensive document that can represent excellent value for money, as it can help reduce disputes and ambiguities later.

  • Karen Walsh, from a farming background, is a solicitor practicing in Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of ‘Farming and the Law’. Walsh & Partners also specialises in personal injury claims, conveyancing, probate and family law.
  • Email: info@walshandpartners.ie Web: www.walshandpartners.ie

(Source – Irish Examiner – Farming – Karen Walsh – 12/11/2020)

More information on making a will can be had at Citizen Information: https://www.citizensinformation.ie/en/death/before_a_death/making_a_will.html

Succession Planning – ‘You Only Get One Chance To Get It Right On Transferring The Family Farm’

Over 1,500 people, including a sizeable number from overseas, logged on for the recent Teagasc webinar on transferring the family farm.

The importance of communication and discussion within the family was one of the key messages that emerged from a Teagasc farm succession webinar last week.

The event attracted an online audience of more than 1,500, with significant interest in the webinar from overseas.

Teagasc farm management specialist James McDonnell (pictured) stressed that good communication is the cornerstone of any successful transfer of the farm business to the next generation.

“Transferring the family farm is a task that you only get one chance to get right. It is a task that you get to do once in your lifetime.

“Once the farm is passed on to a child or children it cannot be taken back.

“Careful consideration must be taken to ensure that the transfer does not cause family problems,” Mr McDonnell said.

“Good communication is the key to getting the farm transfer right.”

The Conversation

Starting a conversation around succession was one of the first steps in the transfer of the farm, Mr McDonnell said.

While he accepted that starting this conversation was a delicate matter and one that generally required some time and consideration, it was an essential early step.

The act of attending a seminar on succession, or leaving the documentation from such an event on the kitchen table could prompt such a discussion within the family, he pointed out.

“Being fair to all the children does not mean you need to be equal.

“One child may be happy to get a good education or skill as it allows them to earn a decent living and build wealth over time.

“Another child may be happy to take on the farm, even though the cash flow is poor, because they like it,” Mr McDonnell said.

The Will

If the family conversation is the starting point of the farm transfer journey, then drawing up a Will is actually the foreword – or to use Mr McDonnell’s analogy, it is the backstop. It is the safety net which can potentially prevent any unnecessary confusion and needless costs.

“Making decisions around succession may take some time, so it is important to have some safeguard, should something unforeseen happen. The Will can be used to do this. Everybody should have a will, this becomes your backstop until the succession plan is put in place,” Mr McDonnell explained.

He said a personal affairs checklist – which is a concise record of an individual’s personal finances, loans, investments, property holdings and other matters – can also be a useful document to have completed in case of sudden death or illness.

“This document could save your family a great deal of time in the future,” he said.

‘Good communication is the key to getting the farm transfer right,’ stressed Teagasc farm management specialist James McDonnell.jpg

The Plan

Drawing up a succession plan which protects the viability of the farm business into the next generation is an important part of the transfer process, the Teagasc webinar heard.

“Don’t try to do this task on your own because there are far too many pitfalls and things to know for a once-in-a-lifetime event to do by yourself. There are plenty of professionals and agencies that can help and steer you along the correct path.

“These include Teagasc farm advisors, accountants, solicitors, mediators, citizens’
information professionals and the Department of Social Protection,” Mr McDonnell explained. “It is difficult to get a viable business moved from one generation to the next, and a poor plan could put the business at risk.”

The Time

He said that while it will take time to get a fair and workable succession plan in place, the longer a farmer leaves the issue of generational transfer unaddressed then the more difficult it becomes to implement a strategy that is tax efficient.

“Early transfers can be planned so that the taxation cost is minimised, with a transfer on death, the tax due is locked in and cannot be avoided,” Mr McDonnell said.

Teagasc financial specialist Kevin Connolly expanded on this issue.

While there are ample reliefs to offset most tax liabilities for the retiring farmer and his/her successor, Mr Connolly pointed out that there were age, farming and educational considerations relating to CAT, CGT and Stamp Duty that can prove costly if they are not met.

 The Strategy

Teagasc collaborative farming specialist Gordon Peppard outlined alternative options to straight farm transfers which may suit some families. These included farm partnerships, succession partnerships, share farming and long-term leasing.

Mr Peppard said trust, flexibility and good communication are critical to the success of any collaborative farming arrangement.

The Pension

The webinar heard that it is important that all farmers try to make PRSI contributions so that they qualify for the state contributory pension and thereby have some income security into the future. Issues around the Fair Deal scheme were also highlighted.

(Source – Irish Independent – Indo Farming – Declan O Brien – 24/11/2020)

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