Estate planning is making a plan in advance and naming whom you want to receive the things you own after you die. However, good estate planning is much more than that.
Estate & Succession Planning
Believe it or not, you have an estate. In fact, nearly everyone does. Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions. No matter how large or how modest, everyone has an estate and something in common—you can’t take it with you when you die.
An estate plan begins with a will or living trust. A will provides your instructions, but it does not avoid probate. Any assets titled in your name or directed by your will must go through our state’s probate process before they can be distributed to the chosen beneficiaries. All business assets, investments, savings, deposits, properties and A(M)RFs will form part of an individual’s estate at the time of death.
How do we limit the Inheritance Tax payable on receipt of an inheritance?
Taking professional advice in advance and providing possibly for one or more of the following:
- S72
- Whole of Life
- Retirement Relief – Business, Farm, etc
What is Section 72 Life Insurance?
Section 72 Life Insurance is a type of Life Insurance that parents buy in Ireland to pay their children’s inheritance tax bill. It’s called S72 because it’s defined in Section 72 of the Capital Acquisitions Tax Consolidation Act 2003.
It works much the same as regular Life Insurance in that you take out a policy, you pay your premium, and when you die, your benefactor gets a tax-free lump sum. In this case, they’ll use it to clear the inheritance tax. The caveat here is that Section 72 insurance has to be taken out on the person leaving the inheritance.
How much does a Section 72 Policy cost? Like all life insurance policies, it depends on:
-
- your age,
- health,
- whether you smoke and
- the amount of cover.
It’s underwritten in the same way as a normal life insurance policy.
This is a very complex area and we strongly recommend that you seek not just financial advice but also legal and taxation on the above areas.
The WALLACE Financial Guide to understanding Estate Planning & Succession Planning
Let’s be honest, the whole area of inheritance tax can be baffling. So, it is very important to get advice from someone who fully understands how it works. At WALLACE Financial we will take you through all your options, and help you make plans for your estate that suit your needs and maximise the tax efficiencies for those you leave it to.
Who needs inheritance tax planning?