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  1. INCLUSION IRELANDAGM 24th April, 2010 Mary Gordon BL

  2. Part I • Benefits of Making a Will • Requirements • Special Considerations

  3. Part II • Discretionary Trusts • Taxation • Ward of Court • Guardianship

  4. Part III • Mental Health Act 2001 • Q & A

  5. 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

  6. 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

  7. Requirements of a valid Will • 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

  8. 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

  9. 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.

  10. Special Considerations for parents • 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

  11. Discretionary Trusts • A Discretionary Trust is a means of providing for 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

  12. 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

  13. 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…

  14. 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

  15. 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

  16. 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 Fund-any 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

  17. [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

  18. Means Test • Formula = cash value of investment and 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

  19. Sliding Scale-Means Testing • Capital Weekly Means Assessed • Up to €20k Nil • Next €10K €1 per €1000 • Next €10 €2 per €1000 • Balance €4 per €1000 • ANY change in circumstances which may affect state benefits must be notified to the department of Social Welfare

  20. 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

  21. 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

  22. Inheritance Tax • Similar Exceptions apply

  23. 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

  24. Protecting Interests of Your Child with an ID • Ward of Court • Power of Attorney • Guardianship

  25. Ward of Court • Problematic • Committee • Case Officer • Cumbersome Procedure-Court approval needed for decisions such as travelling abroad etc.. • Guardianship proposals

  26. Ward of Court System • Who Applies?-Family Member, solicitor, their 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

  27. Committee • Once a Wardship Declaration has been issued by the 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

  28. Guardianship Proposals • ‘Next of Kin’ Procedure to be legalised • Procedures simplified • Law Reform Commission working on Report • Ward of Court System still good law

  29. 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

  30. 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

  31. Summary of changes • 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

  32. Q & A