INCLUSION IRELAND AGM 24 th April, 2010 Mary Gordon BL

Part I Benefits of Making a Will Benefits of Making a Will Requirements Requirements Special Considerations Special Considerations

Part II Discretionary Trusts Discretionary Trusts Taxation Taxation Ward of Court Ward of Court Guardianship Guardianship

Part III Mental Health Act 2001 Mental Health Act 2001 Q & A 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 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 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 Protection for your family Your wishes will be protected by law Your wishes will be protected by law A will makes it clear who will manage the estate as executor (s) A will makes it clear who will manage the estate as executor (s) To provide guardians/trustees for children To provide guardians/trustees for children To save expenses on inheritance tax and legal bills To save expenses on inheritance tax and legal bills

Requirements of a valid Will A will MUST be in Writing A will MUST be in Writing You must be over 18 or have been married You must be over 18 or have been married You must be of sound mind You must be of sound mind You must sign and date the will (at the bottom) in the presence of 2 witnesses 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 The witnesses must not be able to gain from the will You must nominate 2 executors You must nominate 2 executors IF ANY OF THESES REQUIREMENTS ARE NOT MET YOUR WILL IS INVALID IF ANY OF THESES REQUIREMENTS ARE NOT MET YOUR WILL IS INVALID

Executors and Trustees An executor can be a beneficiary under the will An executor can be a beneficiary under the will It is vital you trust the executors of your 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 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 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 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 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 Age of child Age of child Degree of Disability and changing needs Degree of Disability and changing needs State benefits State benefits Tax considerations Tax considerations Exploitation Exploitation Chance of child being made a Ward of Court Chance of child being made a Ward of Court Inheritance Claims by Trustee’s children Inheritance Claims by Trustee’s children Death of a Trustee Death of a Trustee

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 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 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 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 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 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 Invest Trust Capital To apply the income from the investment as they see fit 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) 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… 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 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 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 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 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 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 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 [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

[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 [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 property (not including your own home) + money in a savings account + cash in hand or in a current bank account 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 The following do not count as means Your own home Your own home A social welfare payment received by another member of the household A social welfare payment received by another member of the household Money received from a charitable organisation Money received from a charitable organisation Income from rehabilitative training-€120 per week Income from rehabilitative training-€120 per week Mobility Allowance or Home Help Mobility Allowance or Home Help

Sliding Scale-Means Testing CapitalWeekly Means Assessed CapitalWeekly Means Assessed Up to €20kNil Up to €20kNil Next €10K€1 per €1000 Next €10K€1 per €1000 Next €10€2 per €1000 Next €10€2 per €1000 Balance€4 per €1000 Balance€4 per €1000 ANY change in circumstances which may affect state benefits must be notified to the department of Social Welfare 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 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 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 €20k Tax free to a child over 18 Gift of a Dwelling House Gift of a Dwelling House Payment for support, maintenance and education of family members which are part of normal expenditure Payment for support, maintenance and education of family members which are part of normal expenditure

Inheritance Tax Similar Exceptions apply Similar Exceptions apply

Deeds of Covenant Deed 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 Ward of Court Power of Attorney Power of Attorney Guardianship Guardianship

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

Ward of Court System Who Applies?-Family Member, solicitor, their doctor or hospital authorities 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 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 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 Office of the Ward of Court a “ Committee” will be appointed. 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 is one or more persons. It is usually one person and frequently a family member The committee acts under the direction of the courts The committee acts under the direction of the courts A case officer is appointed to by the court to assist the committee A case officer is appointed to by the court to assist the committee The committee has a duty to account The committee has a duty to account

Guardianship Proposals ‘Next of Kin’ Procedure to be legalised ‘Next of Kin’ Procedure to be legalised Procedures simplified Procedures simplified Law Reform Commission working on Report Law Reform Commission working on Report Ward of Court System still good law 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 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 There is now an independent review procedure in the case of all involuntary detentions Establishment of the Mental Health Commission Establishment of the Mental Health Commission

Establishment of review Tribunals Establishment of review Tribunals Inspector of Mental Health Services Inspector of Mental Health Services Monitoring and regulating of the standards of care Monitoring and regulating of the standards of care Changes in the legal rights of psychiatric patients Changes in the legal rights of psychiatric patients

Summary of changes Patient’s right to information Patient’s right to information Right to legal representation Right to legal representation Right to communicate with the Inspector of Mental Health Services Right to communicate with the Inspector of Mental Health Services Right to appeal to the circuit court Right to appeal to the circuit court Right to be admitted voluntarily Right to be admitted voluntarily Right to review by the Tribunal 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 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 Appeal to the High Court on a Point of Law THE MENTAL HEALTH ACT IS BEING INTRODUCED ON A PHASE BY PHASE BASIS THE MENTAL HEALTH ACT IS BEING INTRODUCED ON A PHASE BY PHASE BASIS

Q & A