What is Estate and Succession Planning

Estate and succession planning is the process of transferring assets either during your lifetime or at death. Divesting yourself of assets needs a lot of consideration and the primary goal is always to ensure that the person transferring the assets has sufficient resources to meet their needs. However, even if you are not transferring assets in the near future it is important to plan for the ultimate passing of assets as failure to do so can have a number of negative consequences such as:

  • Causing family disputes over the distribution of assets

  • Paying more taxes than in is necessary

  • Assets passing other than as would have been wished

  • Drawn out proceedings putting a strain on family members

Considerations

There are a number of matters to contemplate when forging a succession plan. For example:

  • Have succession rights for your spouse and children been properly addressed?

  • Who do you want to benefit and to what extent?

  • Should certain assets pass to certain beneficiaries e.g. should a family business pass to child working in the business?

  • Should you have a Power of Attorney in place? If so, what should it cover?

  • Is there a benefit to transferring assets during your lifetime or is it preferable that they form part of your estate?

  • Are there benefits in setting up a trust?

  • Should you have an insurance policy to provide for dependants in the event that you no longer can?

When it’s clear what you want to achieve, the next step is to structure your goals in the most tax efficient manner possible.

Taxes

The main taxes that need to be considered on the transfer of assets are:

  • Capital Gains Tax

  • Capital Acquisitions Tax (gift & inheritance tax) &

  • Stamp Duty

The current rates of CAT and CGT are 33%. Therefore, it is important to avail of tax reliefs where possible or else a significant amount of wealth could be lost on a transfer.

In addition to tax reliefs, there are other tax efficient ways to structure the passing of wealth, particularly during your lifetime.

There can also be pitfalls in relation to foreign assets. For example, a holiday home abroad could be subject to tax in that jurisdiction.

How we can help

HLB Sheehan Quinn has been in practice for over 40 years and we have been advising clients on their estate and succession plans for decades. We have tried and trusted methods to help guide you through the process of deciding what you want to achieve and then putting the steps in place to accomplish those goals.

An estate or succession plan can change with time and it is important that they are reviewed. Anything from new family members, changes in financial circumstances or even a new outlook on life can alter our plans. For that reason we recommend that once a plan is in place it is reviewed periodically to ensure that it is still fit for purpose.

If you would like to arrange a meeting to discuss your goals or talk to one of our advisors please contact us.