Your Questions: Being married gives tax break
QMy partner and I are not big believers in marriage. We have lived together for more than 10 years. Do married couples have tax advantages over non-married couples – and are there any other financial benefits we are losing out on by not marrying?
Carol in Galway
AThey say love is blind – but marriage is an eye-opener. Couples can greatly benefit financially by tying the knot in at least four ways:
1. Joint assessment of your incomes means any unused tax allowances can be taken by your spouse if he or she is paying the higher rate of tax. However, as a single person, you are precluded from taking unused tax credits from your partner, male or female. Unmarried couples are treated as single for tax purposes.
2. Spouses inherit all assets tax-free on the death of their spouse if a valid will is made and there are no children. If you're single, the most you can inherit from your partner tax-free is €15,075 – after that, tax is payable at 33 per cent. Furthermore, you can only expect to inherit €15,075 tax-fee if your partner has made a will and nominated you for a bequest. Ironically, if a non-married couple has a child and they make a will, that child could potentially be entitled to inherit up to €225,000 tax-free from his/ her parents.
3. Married couples may be entitled to certain social welfare benefits or allowances not available to unmarried people in certain circumstances. For example, you can only claim the widow or widower's allowance or the widowed parent grant of €6,000 if your husband or wife dies.
4. There's no guarantee that you'll be eligible for life cover, health insurance or pension entitlements when your partner dies if you're not married.
QMy husband and I are in our retirement but we are reluctant to broach the whole topic of death and wills. We have four children. Do we really need to make a will, and what happens if one of us dies without making one ?
Deirdre in Greystones,
AI have to agree, it is a little morbid thinking of wills and inheritance. Recent research by Foresters Friendly Society and survey firm ICM Direct showed that more than 66 per cent of the population in England and Wales have not made a will. The statistics would be relatively the same in Ireland. However, there is a practical side in looking after your loved ones before you pass on. Wills not only clarify the beneficiaries of your estate, but appoint executors, legal guardians of your children and even establish trusts for disabled children.
Importantly though, it saves time and hassle. If a spouse dies without making a will, the surviving spouse under the Succession Act 1965 receives two-thirds of the estate, with the other third divided equally between the children. Making a will can also avoid disputes. Once there is a clear irrevocable authorisation by way of a will, obtaining a grant of probate is a simple operation that can be done by anyone.
If there are any complex issues regarding your estate, I would recommend consulting a solicitor.
If you wish to draw up your own Will, you can access will templates online.
For the smooth and hassle-free transfer of your assets and wishes, making a will therefore makes sense. I would also recommend the pre-signing of an enduring power of attorney for when you may be unable to make decisions when they still have to be made.