Meet Nigel Rotheroe
I am a qualified accountant working in public practice and a director of a number of licensed trust and corporate service provider companies. I am actively involved in wealth management and preservation structures for clients in the Isle of Man, where I live and further afield and this often entails working with clients and/or professional firms overseas. My work varies day to day and ranges from giving bespoke tax and structure advice, undertaking special projects and addressing the multitude of issues that trust and corporate administration work brings. Life is never dull!
This is the first article in a series of eight about leaving family wealth to the next generation(s). The other Articles are entitled:
- Why create a trust?
- Types of trust and who’s involved
- One trust or two?
- Trusts and passing on the family business
- Powers of Attorney and family wealth
- Trusts and Forced Heirship
- Protectors, the ups and downs
Why You Should Make a Will
I am an accountant, not a solicitor, so my view in this article about why you should have a Will is based on over 35 years experience in professional practice and advising clients, having regard to their personal circumstances, how best they can achieve their wishes as regards their estate and leaving it to the family or others.
I am perhaps not alone in saying that I only realise I am getting older when I look at the age of my children and what they are doing; no more so than when my youngest turned 18, left school and went to university last September. The eldest is 40 this year, married and like her middle sister has a child, so the next generation has started.
So and perhaps surprisingly, not many of us want to think or talk about our own death. Such thoughts seem to be focused on what is going to happen when our aged parents are no longer with us.
But as Benjamin Franklin once said “there are only two certainties in life – death and taxes”, so not to think about what is inevitable and going to happen in the future is tantamount to “putting your head in the sand”.
It therefore makes sense, assuming you are going to leave something behind you, asset/wealth wise, to do a Will; which is not only clear and unambiguous, but legal.
Some of the points which have been put to me in relation to having a Will.
Do I need a Will?
The simple answer is yes. Where you have not executed a valid Will, i.e. you die intestate, your estate is dealt with under the statutory rules on intestate succession. This may mean that people benefit from your estate who you do not wish to or in a sum/proportion you consider inappropriate. This is further compounded by intestate succession rules varying from one place to another so having a Will is a logical step to control (as far as you can) how and to whom you wish others to benefit from your estate.
Do I need more than one Will?
Generally speaking you should have only one Will and any subsequent Will(s) should supersede, i.e. replace, any former Will.
I have heard of people having more than one Will, why is that?
This very much depends upon your personal circumstances. Some of the issues that may have a bearing on whether you may need to have more than one Will are:
- You have a pre-nuptial or post-nuptial agreement with your spouse. Though not formally recognised in Ireland, the Irish Courts may take their contents into consideration. So you may have one Will which addresses the formalities expressed in such agreements and another to deal with everything else.
- Having assets in more than one jurisdiction. You may live and be resident in Ireland, but have a home overseas. It may therefore be advisable to have a Will for the jurisdiction concerned (with an English/foreign language equivalent translation side by side) to address any local legal and tax laws and have your principal [home] Will deal with the remainder of your estate.
- Certain civil law and muslim jurisdictions have what are called forced heirship provisions which make specific provision as to whom and what proportion of your estate you can leave to members of your family. It is therefore worth considering having another Will to deal with property held in any such jurisdictions.
What should I be considering when drafting a Will?
This very much depends upon your personal circumstances, but the sort of things one typically has to consider:
- Who is going to be the executor(s) of your estate? This ranges from sole family members/friends, to professionals, i.e. your solicitor(s), or a mixture of both. The law is now becoming more complex and draconian and I would recommend to anyone having a solicitor or accountant as an executor.
- Consider whether you should be giving away what would otherwise be a specific bequest in your Will during your lifetime. More often than not one is only talking about “when” not “if”.
- Are you going to leave funds to a charity and if so is there anything specific you want to mention as regards the gift, i.e. I leave €500 to the XYZ charity providing it is used to provide support in Ireland? You at least know where your money will go.
- Is there anyone specifically that needs your support and how best can this be provided? You may for instance have a disabled son or daughter that needs caring for if you predecease them.
- You might need to consider putting property in joint ownership, or allowing someone to reside in a property now and on their demise for it to go to someone else.
- Any statutory entitlement of a spouse or civil partner (see Succession Act 1965 as amended).
- What your estate comprises and how your beneficial interest needs to be conveyed to those who you wish to receive it.
- Property held overseas and whether you need to have a separate Will to deal with any such property.
- What is to happen in the event the person to whom you are seeking to benefit predeceases you or the legacy you were thinking of bequeathing is sold.
- Benefiting your children can be complicated, especially where you “wish to balance up” the value of assets given to one child compared to another. Establishing a Will Trust, where after the payment of any tax, testamentary expenses, creditors and the making of specific bequests, the remainder of your estate falls onto the terms of a trust (normally a discretionary settlement), will usually address the problem.
- How you propose to provide for your spouse or partner.
What may make my Will or part of my Will obsolete?
There are a variety of things which may affect how you intend your estate to be dealt with on your demise, such as:
- Getting married.
- Statutory entitlement of a spouse or civil partner.
- The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 came into effect on the 1st January 2011. As well as conferring tax benefits on civil partners the new act also confers property rights on certain qualifying cohabitants.
- Under Section 117 of the Succession Act 1965 (as amended) you have an obligation to consider the position of your children (whether born inside or outside of marriage).
- The imposition of Capital Acquisitions Tax.
- Pre-nuptial or post-nuptial agreements.
- Death of someone you intend to leave part of your estate to.Disposing of an asset which was to be left to someone and how this may affect what you might leave to someone else.
Is there anything else I need to consider?
Making a Will is important and it can address a multitude of issues. I would recommend you review the terms of your Will every 3 years or so (generally because of your wealth and assets change) or sooner where you are perhaps unfortunately diagnosed with a terminal illness.
However, as much as a Will is perhaps a necessity, it cannot deal with the unexpected and it is here that you might want to consider leaving part of your estate on the terms of a discretionary trust where the trustees have the ability to fulfil your wishes and “balance the books” between siblings or safeguard your surviving spouse and children.
It is often said “that a trust can do anything an individual can” and this is certainly the case when you are dead and you are no longer able to deal with the unexpected.
Who should help me with my Will?
Your accountant, if you have one, is just as helpful as your solicitor when planning and drafting the terms of your Will, but ultimately I would recommend a Solicitor or a professional Will writer to approve the wording of your Will before it is signed, witnessed and dated.
If you would like to know more about the points raised in this Article and what you may need to address in drafting your Will then please contact me or one of my colleagues:
T: +353 42 933 9955