INCLUSION IRELAND
AGM
24th April, 2010
Mary Gordon BL
Part I
• Benefits of Making a Will
• Requirements
• Special Considerations
Part II
• Discretionary Trusts
• Taxation
• Ward of Court
• Guardianship
Part III
• Mental Health Act 2001
•Q&A
Making a Will
• A Will is a witnessed document setting out
the deceased’s wishes for his or her
possessions (the ‘estate’) after death
• If you do not make a will the rules of
intestacy apply and your estate may not
be administered in the way you may want
it to be
Why make a Will
• Protection for your family
• Your wishes will be protected by law
• A will makes it clear who will manage the
estate as executor (s)
• To provide guardians/trustees for children
• To save expenses on inheritance tax and
legal bills
Requirements of a valid Will
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A will MUST be in Writing
You must be over 18 or have been married
You must be of sound mind
You must sign and date the will (at the bottom)
in the presence of 2 witnesses
The witnesses must not be able to gain from the
will
You must nominate 2 executors
IF ANY OF THESES REQUIREMENTS ARE NOT
MET YOUR WILL IS INVALID
Executors and Trustees
• An executor can be a beneficiary under
the will
• It is vital you trust the executors of your
will
• Parents of young children or a dependant
with an intellectual disability can appoint
Trustees
Rights of a Child
• Children do not have an absolute right to
inherit their parent’s estate
• Children born inside or outside of marriage
and adopted children are all treated the
same
• BUT a child may apply to the court if they
feel they have not properly been provided
for under the Succession Act of 1965.
Special Considerations for parents
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Age of child
Degree of Disability and changing needs
State benefits
Tax considerations
Exploitation
Chance of child being made a Ward of Court
Inheritance Claims by Trustee’s children
Death of a Trustee
Discretionary Trusts
• A Discretionary Trust is a means of providing for
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a family member with an intellectual disability
indirectly and not as a direct beneficiary of the
will
Funds of the DT are administered at the
ABSOLUTE DISCRETION of the Trustees and are
not under the control of the person with a
disability
Trustees may also be executors of the will
How to create a Discretionary Trust
• BY DEED-during the parent’s lifetime
when perhaps a lump sum or windfall is to
be invested for the benefit of the person
with a disability
• BY WILL-the DT is created and will come
into effect after the parent (s) are dead
and the will is often where the Trustees
are named
Role of the Trustee
• Invest Trust Capital
• To apply the income from the investment
as they see fit
• To apply capital to the Beneficiary (Keep
in mind Danger of Loss of State Benefits)
• The Trust can be framed to include
provision for care etc…
Tax Liabilities
• 6% Tax applied in the first year and 1% in
each subsequent year
• THIS TAX IS NOT PAYABLE WHERE THE
BENEFICIARY IS A PERSON WITH AN
INTELLECTUAL DISABILITY
• Clearly indicate that the DT is for a person
with an Intellectual Disability and NOBODY
else
Effect on State Benefits
• Parent’s Means are not considered when
the Department decide on Disability
Allowance
• If a substantial amount is gifted to a
person with an ID they may loose all state
benefits
How are Trust Income and Capital
assessed for Means Testing
purposes?
• [A] Person with ID only has a Life
Interest in the capital of a Trust Fundany periodic payment received from the
Trust is assessed as cash income. If this
income exceeds DA they may loose
Benefits. If amount less then entitlement
to DA will be stopped Proportionately
• [B] if person with ID has ownership of
the capital at date of death (of the parent)
the funds revert to his estate then the
capital is assessed as part of his/her
means. The first €13k approx will be
disregarded for taxation purposes and
anything over and above that amount will
be assessed on a sliding scale
Means Test
• Formula = cash value of investment and
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property (not including your own home) +
money in a savings account + cash in hand or in
a current bank account
The following do not count as means
Your own home
A social welfare payment received by another member of the
household
Money received from a charitable organisation
Income from rehabilitative training-€120 per week
Mobility Allowance or Home Help
Sliding Scale-Means Testing
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Capital
Up to €20k
Next €10K
Next €10
Balance
Weekly Means Assessed
Nil
€1 per €1000
€2 per €1000
€4 per €1000
• ANY change in circumstances which may affect
state benefits must be notified to the
department of Social Welfare
Taxation
• Gift Tax is payable during the lifetime of
the donor
• A gift is taken when the donee becomes
beneficially entitled in possession to some
property and does not pay full
consideration for it
Exceptions to Gift Tax
• €20k Tax free to a child over 18
• Gift of a Dwelling House
• Payment for support, maintenance and
education of family members which are
part of normal expenditure
Inheritance Tax
• Similar Exceptions apply
Deeds of Covenant
• Deed of Covenant
- Legally binding Document made by an individual to pay
an agreed amount to another individual without
receiving any benefit in return
-similar formal requirements as a will
-a deed must exceed 6 years to qualify for tax relief
-UNRESTRICTED TAX RELIEF can be claimed on
covenants in favour of permanently incapacitated adults
BUT the income is treated in the same way as any other
income so it will affect Means Testing for DA
Protecting Interests of Your Child
with an ID
• Ward of Court
• Power of Attorney
• Guardianship
Ward of Court
• Problematic
• Committee
• Case Officer
• Cumbersome Procedure-Court approval
needed for decisions such as travelling
abroad etc..
• Guardianship proposals
Ward of Court System
• Who Applies?-Family Member, solicitor, their
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doctor or hospital authorities
Types of Application?-petition with medical
affidavits or application by letter where there is
no willing and suitable person to act as
petitioner
Will it be expensive?- the cost of the
proceedings usually come from the Ward’s
Estate
Committee
• Once a Wardship Declaration has been issued by the
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Office of the Ward of Court a “ Committee” will be
appointed.
The committee is one or more persons. It is usually one
person and frequently a family member
The committee acts under the direction of the courts
A case officer is appointed to by the court to assist the
committee
The committee has a duty to account
Guardianship Proposals
• ‘Next of Kin’ Procedure to be legalised
• Procedures simplified
• Law Reform Commission working on Report
• Ward of Court System still good law
MENTAL HEALTH ACT 2001
• Changes the existing rules on admission to
psychiatric hospitals in particular regarding
involuntary detention
• There is now an independent review
procedure in the case of all involuntary
detentions
• Establishment of the Mental Health
Commission
• Establishment of review Tribunals
• Inspector of Mental Health Services
• Monitoring and regulating of the standards
of care
• Changes in the legal rights of psychiatric
patients
Summary of changes
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Patient’s right to information
Right to legal representation
Right to communicate with the Inspector of Mental Health Services
Right to appeal to the circuit court
Right to be admitted voluntarily
Right to review by the Tribunal
Each decision to involuntarily detain or extend the duration of
detention of a patient will be subject to automatic review within 21
days
• Appeal to the High Court on a Point of Law
• THE MENTAL HEALTH ACT IS BEING INTRODUCED ON A PHASE BY
PHASE BASIS
Q&A