Passing wealth is not just about transferring money. It could be leaving an inheritance to your next generation or helping grandchildren manage cost of their education. Now, this is not limited to these only, as it might even mean gifting money even when you are alive.

This also stands for careful mapping out of your money so that this can help your loved ones in the upcoming times and most effectively. Inherited money can prove to be life-changing for future generation, as it may eliminate financial struggles to some extent.

In Ireland, inheritance or gifting money without proper planning might mean giving a huge portion of your resources directly to revenue. Besides, there might be tax implications which you should not ignore if you are consider to pass your money down.

You may be a parent or grandparent who wants to help next generation financially. There is nothing wrong in wanting to help, but this is not advisable without going through some of the key considerations.

This is exactly like the way you assess a few things before applying for money loans in Ireland. With this analysis, you can take a careful step towards having the best experience while borrowing money.

Why mapping out a few things may help?

Instead of assuming what can happen to your wealth and assets after your demise, research for better planning. This will make you aware of the nitty gritty details that helps in smooth passing down of your money.

Most importantly, you will be able to prevent unnecessary complications for your family members. A clear inheritance or gifting strategy can prevent the beneficiaries from additional spending on tax bills.

Moreover, they do not have to face legal delays. A proper mapped out plan can help preventing disagreements over property issues. By planning ahead of time, you make sure that your beneficiaries get the maximum value of what they expect to receive.

What to consider before passing money down in Ireland?

One of the safest step to implement is early planning which can make more options available for you. There are aspects which need your attention.

·        Assess Capital Acquisition Tax

CAT is being imposed on the person who will be receiving your money. This means that you do not have to spend money, but your money can cause trouble in other’s life.

You must assess the flat rate i.e. being charged on the amounts that exceed a specific threshold limit. This is a little tricky to understand as the threshold is decided based on the relationship between the giver and the receiver.

In this regard, you must keep reviewing the tax rules related to inheritance as they keep changing from time to time. If needed, you can even seek advice from an expert who will guide you accordingly.

By understanding CAT, families can decide how they can go ahead with the gifting structure in a more effective manner.

·        Consider lifetime gifting

Your family can take advantage of lifetime gifting which does not need you wait until your death. This arrangement let your family utilise your money as allocated by you ahead of time.

Your money can come in handy to them in covering major life expenses like sponsoring the education cost of your children or depositing money for property purchase.

Lifetime gifting helps in lowering the amount of tax you pay for your estate. Above all, you will be able to see how productively your money can influence the life of your children or grandchildren.

It would be better if you consider giving small annual gifts. They might not come under tax implications. Now, this will completely depend on the current regulations of Ireland.

Spread gifts over several years. This is a good way to pass down sizeable amount of wealth and bypass tax obligations to a great extent.

·        Prepare a valid will

This is another way of reducing the future complications for next generation especially after you die. A properly prepared will can play the role of an important document. It is capable of eradicating property disputes in the future.

If you do not prepare the will carefully, your property might not be distributed according to your preferences. Then, Irish succession law will take over and the property distribution will take place according to it.

The biggest benefits of having a well-defined and valid will is that your property will be inherited by someone according to your wish. The will should clearly mention who will be the receiver.

In case if you are preparing will for minor children, appoint guardians until they the legal age to inherit your property finally. When a proper and valid will is there, you do not have to worry much about confusion or misinformation spread among family members.

Your responsibility is not over after creating the will. Keep checking your will from time to time, as major life events like birth, divorce, marriages or major changes in your financial life might need you to modify it accordingly.

·        Do not just stick to cash

When people talk about inheritance, their main concern always remains cash i.e. the money they have in their cash reserve. When it comes to passing down wealth, money is not the only factor.

It includes family homes, investment properties, valuable personal possessions, pension funds, etc. Now, if you have a family business to pass down, you cannot do it just like that at a blink of an eye. This requires careful planning for years.

·        Treat beneficiaries fairly

One of the trickiest thing while passing down money is to balance your equation between family members. Some of them might be expecting equal distribution of wealth, while others might not. People usually think that fairness means equal distribution of wealth between family members.

To avoid disagreements and disputes, you must discuss a few crucial things with your family members. Keep it as an open discussion so that you will get an idea on what others expect and think.

·        Keep accurate records

Documentation at every step is very crucial. Do not forget that you are transferring wealth. Important records to maintain are gifts made during your lifetime, transferring of property, providing financial assistance to anyone in the family, loan agreements between family member, essential legal documents, etc.,

You might not be able to see a direct impact of keeping up with records. However, it will have an indirect productive impact on your beneficiaries. They can track down the history of financial transfers. Tax reporting will become easier for your next generation to whom you are planning to pass down money.

The bottom line

Passing down money involves crucial decisions. It not just about whom you are transferring money. Pay attention to the various legal aspects so that future complications can be avoided.