Saturday 21 April 2018

Ensure your cache goes where you want it to go: make a will

IN THE MONEY: In Charles Dickens’s ‘Great Expectations’, Pip achieves his ambition to
become a gentleman when he inherits a large fortune. John Mills, left, as Pip, and Alec
Guinness in David Lean’s 1946 film ‘Great Expectations’, based on the novel
IN THE MONEY: In Charles Dickens’s ‘Great Expectations’, Pip achieves his ambition to become a gentleman when he inherits a large fortune. John Mills, left, as Pip, and Alec Guinness in David Lean’s 1946 film ‘Great Expectations’, based on the novel
Louise McBride

Louise McBride

Making a will is something most of us put on the long finger – however, the repercussions of doing so can be enormous.

A child who needs a lot of financial support or medical care could find it very hard to cope and get on in life should you pass away before making a will which ensures they are provided for.

The chances of a favourite granddaughter or a secret lover inheriting a big chunk of your estate are slim if this is not laid out in a valid will. It is ultimately the law that decides who inherits your wealth or prized possessions should you die without a will. In such cases, when you are survived by your spouse and children, the rule of the law is that two-thirds of your estate will go to your spouse; with the rest divided equally among your children.

A will records your assets, such as bank accounts, shares, property and so on – and where those assets are. This is hugely important. Prized possessions, such as a a valuable Monet painting or secret stash of money in safekeeping somewhere, could be lost forever unless there is a record of those possessions – and where they are kept.

How much does a will cost?

Expect to pay around €500 to get a solicitor to draw up a straightforward will for you. The cost could be higher or lower, depending on the solicitor and how complex your will is.

For example, the Dublin solicitors, Brophy Solicitors, charges about €148 (including VAT) for a simple will – or €246 for a joint will. "A simple will is usually one where the individual or couple has one property, doesn't have a massive estate and where there are no dependents," said Rebecca Keatinge, a solicitor with Brophy Solicitors.

The fees charged for complicated wills, such as ones which involve a lot of estate planning; tax advice; providing for dependants like young children, children from multiple marriages, or relatives with special needs, will usually be a lot higher than €500.

Can I make my own will?

You don't have to hire a solicitor to draw up a will – you can do it yourself as long as you are over 18 or have been or are married, and are of sound mind. Make sure your will is done properly should you put it together yourself – otherwise, the will could be challenged or deemed invalid.

What should I include in my will?

You should put together a list of your assets, their value, and where those assets are kept. You also need to set out how you wish to divide your estate, who you wish to leave your assets to, and any special circumstances which need to be taken account of in your will – such as if one of your children suffers from a disability. Parents of young children should ensure their will outlines how their children will be cared for – and how they will be provided for.

The will must be in writing and signed and dated by two witnesses in your presence. These two witnesses cannot be people who will gain from your will. You must date and sign or mark a will and your two witnesses must see you do this. You must also appoint at least one executor – that is, someone who will carry out the wishes in your will when you die.

For those with children or grandchildren under the age of 18 or people with special needs who need to be provided for, trustees should also be appointed. A trustee looks after the assets in your estate and should be given the powers to decide what maintenance and other payments should be made for the benefit of your children, grandchildren or other dependants.

"The most serious mistakes can cause wills to be rendered invalid, such as if they are incorrectly executed or witnessed," said Cormac Brennan, partner with the Dublin solicitors, O'Connell Brennan. "Mistakes can also arise from careless drafting, where the provisions of the will are unclear – that can lead to disputes between beneficiaries which can end in litigation."

What about tax?

You should also bear tax in mind when drawing up a will. "A failure to draft a will in a tax-efficient way can undermine an otherwise astute estate plan, and may ultimately mean that beneficiaries receive less than they would otherwise expect," said Brennan.

If you're planning to leave money or assets to family, relatives or friends, get up to speed on the inheritance tax thresholds before making your will – as these thresholds determine how much of an inheritance people can get before getting hit for tax. Be sure also to understand the exemptions to inheritance tax as you could take steps now to ensure that those you are leaving money or property to qualify for the exemptions

Can I do what I like?

There are a number of restrictions which you should be aware of. Your spouse or civil partner is legally entitled to a share of your estate – though this entitlement may be lost if you are separated or divorced. Children are not automatically entitled to a share of your estate and there is no requirement to treat children equally. "Children can in certain circumstances take a claim against their parent's estate if they feel that they have not been provided for properly in the will of their parent," said Brennan.

"These types of cases can be devastating for families."

Left paying the price for cheapest option

YOU get what you pay for ... a comment we've all heard in relation to electronic goods, airline tickets and now insurance.

As the 75,000 motor customers of Setanta Insurance – which went into liquidation on Thursday – and their brokers seek to replace insurance over the coming days after being left exposed to having no cover at the roadside, many customers will be reflecting over the weekend and asking themselves: "Was it worth saving that €50 at renewal now that I have to pay another unexpected €500 for cover?"

Setanta Insurance is not an insurance brand many will be familiar with as it sold its products through brokers throughout the country.

In January it commenced a withdrawal from the market no longer offering renewal terms or new business prices and on Thursday the business went into liquidation, leaving doubt over the settlement of claims and cover for existing customers. The Central Bank quickly advised existing customers of the insurer to seek cover elsewhere.

For many of Setanta's customers with vans and who are reliant on their transport for their day-to-day business, this has come as a shock and they face an unexpected additional cost.

In addition to the cost there is the time it takes to source a new insurer at a fair price and to sort out the paper work.

For those with claims outstanding, there are additional questions and concerns.

So is there anything you can do to ensure you are not going to fall into this trap again?

* Many customers and businesses focus on the price when selecting their insurer. Remember the cheapest cover is not always the best.

* Ask yourself if it is an insurance brand you've heard of?

Getting a price is one thing but if you haven't heard of the company, who are you going to deal with when you have a claim or need to make changes to your policy?

* Know who your insurer is. Many people quote their bank or insurance broker name as their insurer when it comes to car and home insurance – these are not insurers but intermediaries or advisers placing business with insurance companies.

* Find out how long the company is in business. Companies such as Liberty Insurance, Aviva and Axa have been around for more than 100 years and and are unlikely to disappear overnight.

* Check if the insurer is part of a large secure global group. If it is, it should have the safety of the parent company who can step in if there is a problem.

* All insurers in Ireland are subject to consumer regulation set down by the Financial Regulator. However, not all are financially regulated in Ireland.

Regulated insurers must meet the stringent financial requirements of the regulator, which give protection to policyholders. That protection may not be the same for those financially regulated outside of the State.

* Find out if your personal information and policy will be serviced in Ireland. There's a certain comfort in knowing that if you have a problem and need to contact someone, the person at the other end of the phone is in Ireland and not in another continent.

Remember these are not just things which should be borne in mind for motor insurance – the same rules apply to home and business insurance too.

Arm yourself with the right information when choosing any insurance.

  • Trevor Lowry is head of personal lines underwriting at Liberty Insurance

Make me Richer with Sarah Stack

Being the proud owner of an Audi will cost you – both at the car dealers, and in getting it on the road. When it comes to insurance, the price is high.

This 35-year-old banker is looking for cover for his 2012 Audi A6. The car is worth €35,000 and the owner, who lives in Dublin, has five years' no claims. The excess for any damage is €300.

Best: €558 FBD

Avoid: €1,168 Aviva Broker

Saving: €610 a year

www.fbd.ie

LADY COVER

A policy is even more expensive for a young woman getting her set of wheels on the road covered. The 22-year-old lives in Limerick city and enjoys three years' no claims. She drives a 2011 Citroen C3 1.4 worth €9,000 and the policy includes €300 excess.

Best: €856 Allianz

Avoid: €1,085 Zurich

Saving: €229 a year

www.allianz.ie

HOME INSURANCE

Many couples forget to add that special engagement or eternity ring on to their house insurance. We looked at a policy for a three-bed semi-detached house in Blackrock, Co Dublin, built in 1990. It includes no accidental damage, but a diamond ring worth €7,000 is listed as a specified item.

The couple have never made a claim before, nor been refused insurance or a renewal, and the house is in an area not prone to flooding or subsidence. The property has an alarm, not connected to a central station, and five-lever mortice deadlocks.

It includes buildings cover for €190,000 and contents cover for €35,000.

Best: €300 Aviva

Avoid: €410 Zurich

Saving: €110

www.chill.ie

MORTGAGE PROTECTION

With every mortgage comes mortgage protection and, with house prices on the up, budding homeowners are shopping around to find the best cover.

This policy is for a couple in their early 30s – both non smokers – who are buying their first home. The plan covers a €300,000 mortgage over a 35-year-term and can save them enough money to buy that extra comfy sofa.

Best: €26.30 Irish Life

Avoid: €31.55 New Ireland

Saving: €2,205 over the term of the mortgage.

www.discountinsurance.ie

LIFE ASSURANCE

Leaving money to a loved one after death is an important priority for many couples. Policy holders pay a premium for a certain term and if they die during that time their beneficiaries will receive a lump sum.

This married couple, who are both 49 years old and non-smokers, have a policy for life cover of €250,000 over a 20-year term

Best: €105 Irish Life

Avoid: €133 New Ireland

Saving: €3,546 over the term of the policy.

www.discountinsurance.ie

How can I cut the cost of using my mobile in Spain?

Question: I used my mobile phone when holidaying in Spain a few years ago and was hit with a massive bill when I came home. I'm planning to holiday in Spain again this summer and would like to use my mobile to make and receive phone calls – as long as I don't pay through the nose again. Will I get hit with high mobile phone charges again if I make and receive calls abroad – and is there anything I can do to keep the cost down? Emma, Naas, Co Kildare

Answer: Using your phone abroad can be expensive and the exact charges will depend on how much you use it. The charges you pay when you use your mobile abroad are known as "roaming" charges. In 2007, the EU introduced a cap on roaming charges which paved the way for cheaper rates within Europe.

Since July 2013, the most you can be charged for making a call while roaming in the EU is 24c per minute – plus Vat. The most you can be charged for receiving a call is 7c (plus Vat) per minute and text messages should cost no more than 8c (plus Vat). The most you can be charged for data roaming – where you surf the internet on your mobile abroad – is 45c per MB, plus Vat. Once you clock up €50 of data roaming charges, you will be asked to confirm that you wish to continue. Some operators may be cheaper.

Once you reach your destination, your phone will most likely connect to a network automatically but this may not necessarily be the cheapest one for you. Before you travel, contact your mobile phone provider or the Commission for Communications Regulation (www.comreg.ie) and check what network would be best for you to roam on. Earlier this month, the European Parliament voted to abolish roaming charges across the EU from December 2015 – so if this goes ahead, by the time your 2016 holiday comes up, it should be cheaper to use your mobile.

Question: I bought a camera through an online auction website last week – but when it arrived in the post, the camera was faulty. When I got in touch with the website, it said I am not entitled to a refund or replacement. Is there anything I can do to get my money back? I spent several hundred on the camera. Paul, Smithfield, Dublin 7

Answer: Under EU law, if you buy something, it must be fit for purpose. If the camera is faulty, it cannot be deemed fit for purpose and you are entitled to redress. The seller must first offer a repair or replacement, free of charge, within a reasonable time. If a repair or replacement is not possible or unsatisfactory, the consumer may then rescind the contract and get a full refund.

Consumer legislation only covers business-to-consumer transactions however. In other words, if you purchased the camera via an auction site but from a private individual, these rules will not apply. In that situation, it is advisable to contact the auction site. Depending on your method of payment, you may also wish to consider opening a dispute with Paypal or contacting your bank or card provider with a chargeback request.

In either case, you should first put your complaint in writing and keep a copy of this correspondence. If the seller does not respond within 10 working days or if they refuse to deal with your complaint, you can contact ECC Ireland (where the seller is based in another European country) or the National Consumer Agency (where the seller is based in Ireland) for assistance.

  • Grace Duffy is dispute resolution adviser and case handler with the consumer watchdog, ECC Ireland (www.eccireland.ie)

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