SUCCESSION PLANNING SOLICITOR, CORK CITY, MIDLETON AND DUBLIN, IRELAND
Succession planning Ireland, solicitors advise and expert guidance for businesses of all sizes. Every family is unique. The movement from one generation to the next is one every family must consider, especially if there is a family business. As a solicitor specialising in succession planning and property and probate over the years I have noticed common factors and advices that are applicable to all families.
Succession Planning in Ireland with Walsh and Partners Solicitors LLP
Here are ten basic tips on how to implement a successful succession plan to ensure that the transition takes place smoothly.
- Start planning now. Do not rush succession planning or your will. The earlier planning begins the greater the number of options. Start talking and planning now. The single piece of advice I would give to any parent wishing to transfer assets to a child is not to leave it until the last minute and rush into it.
- Communicate, communicate, communicate! For some families deciding what to do with the family home, business or other assets, can be very troublesome. How can you pass the assets to the next generation while at the same time not create any animosity, or envy between the children? Every situation and family is unique but what will help greatly whatever you decide is to be open and honest and communicate clearly with your children from the outset. Involve all your children in the succession process and communicate to them the final plan for distribution and transfer of assets. Often people tend not to feel aggrieved or disappointed once they understand the reasons behind your decisions. Explain why you have decided to leave the family home to John or divide the land between John and Paul, or sell the business and divide the proceeds between John, Paul and Mary.
- Make a Will or review your existing Will. While you are deciding what to do, ensure you have a valid up to date will in place should an unforeseen premature death occur. If you do not make a Will, your estate may pass to those you would never have intended to inherit it. For example, Mary and John were married and they had three children. John died and did not leave a Will. Mary inherited two thirds of John’s estate and his children inherited one ninth each.
- Be aware of the five-year ‘look back’ rule when or if you need to apply to the HSE/State for nursing home financial support. If parents have transferred assets within the 5 years prior to this, they will be included in calculations when the State conducts means testing. Consequently the only ‘safe’ transfers are those where a clear five year period has elapsed between the time of the transfer and the first application for State support. This is a relatively new consideration for people
- Ensure you know how much any transfer of assets will cost you. The successor will also need time to find out how much it will cost him or her. The tax payable, if at all, depends on the circumstances, of each case and a detailed discussion is needed with your solicitor and tax consultant/accountant in advance of any transfer of assets taking place.
- Create a list of all of your assets and debts so your solicitor has the full picture when you attend at the office to discuss the proposed succession plan. It will also be easier to divide up your assets between children once you have listed them all out on paper.
- Do determine the most important things, values and priorities to each individual family member to help you decide what to do. It is good starting point to ask each child to identify something from the family home which they would like to be theirs after your lifetime.
- Do address the issue of fair (equitable) equal division of the assets early. Sometimes one may not want to divide an asset between too many people it could lead to disagreement and the property may have to be sold. Fair does not always mean equal and equal does not always mean fair. If John did not go to college and stayed at home to work in the family business, is it really fair to divide the business between all the children?
- Ensure that you will be financially secure after succession planning has been implemented. Once you transfer property you will no longer be the owner of such a valuable asset. Give yourself time to explore the options and discuss the options with your solicitor to ensure you are comfortable for the rest of your life after the succession transfer. Do you keep a right of residence for the rest of your life? Perhaps you do not wish to transfer the family home now and would prefer to leave it pass in your Will? Do you require a right of maintenance out of the property? While it is important to ensure that you are financially secure once assets are transferred.
- Make appointments with professionals as early as possible. Speak with your accountant or tax consultant. Consult your solicitor well in advance. You will need to contact your bank in order to obtain their consent to the transfer if that particular property is mortgaged and this can take a few months. People who are self-employed should check with the Department of Social Protection about PRSI contributions and the pension. Check that you qualify for a medical card or GP Visit Card. There is a lot to be done before you put a pen to paper with regard to succession planning but hopefully the above steps will make the task seem a lot less daunting.