The Ladybird Guide to Estate Planning

By Rebecca Scaife

Published on: March 23, 2023

In a previous blog post, we set out our thoughts on why structured estate planning is not that common in Ireland, and some reasons why people may mistakenly assume they don’t have a need for it.

As estate planning is a less common area of financial planning, we would like to give you a sense of the key themes that it considers and some of the benefits and opportunities that can be gained by approaching estate planning in a structured and timely way.

First of all, let’s start with our definition of estate planning at the highest level. It is “the process of anticipating and arranging, during a person’s life, for the management and disposal of that person’s estate during the person’s life and after death, while minimising gift and inheritance tax.” So while tax efficiency is a very important element of estate planning, there are other strands to it too that require close attention.

For example, we think estate planning also includes planning for incapacity, where we guide clients towards establishing an appropriate Enduring Power of Attorney to ensure their financial affairs can be managed according to their wishes and by someone they trust. This is a valuable document drawn up by the client’s solicitor.

Also as part of estate planning, guardians are often designated for minor children and beneficiaries in incapacity as well as at death. The critical goal is to ensure that no matter what happens to you, your wishes are crystal clear as to the care of your loved ones and the management and/or distribution of your financial assets.

Estate planning also includes a process of reducing or eliminating uncertainties over the administration of a probate, and maximising the value of the estate by reducing taxes and other expenses.

In order to deliver the above, we work closely with specialist advisers to ensure that you receive the most competent legal and tax advice.

What Estate Planning is NOT

We have seen situations and indeed picked up the pieces with clients coming to us for a second opinion in relation to estate planning. These clients have received poor advice from previous advisers. Many advisers in Ireland will simply recommend what’s called a Section 72 life assurance policy. These are policies that are set up, usually with very significant premiums, with the sole purpose of paying the tax bill at death. Our issue with these is that in many cases, the policyholder is simply “forward paying” the tax bill through the premiums paid. Our guiding principle is that it makes far more sense to reduce the tax bill through expert estate planning, keeping the family wealth in the family rather than it going to Revenue and/or a life assurance company.

There are a limited set of circumstances there a Section 72 policy makes sense, but it is our belief that many, if not most of these policies are simply unnecessary. The question must be considered about the inherent conflict of interest presented by the significant commission payment paid to the adviser on setting up a Section 72 policy.

Estate Planning should be driven by the client’s goals

The ultimate goal of estate planning should be determined by the specific goals of the client (testamentary freedom) and may be as simple or complex as the client’s needs dictate.

We’re fortunate in Everlake that our Managing Director Marc Westlake, in addition to probably being Ireland’s most qualified financial planner, is also a registered Trust & Estate Practitioner. Marc and our team of expert financial planners can guide you through your personal estate planning requirements, whether simple or complex. Time is a critical factor in estate planning, so now is the time for you to discover your opportunities for tax efficiency down the road.

To review your financial circumstances and estate planning opportunities, please get in touch or download our guide

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