Estate and Succession Planning Survey Report 2018

Transcription

1 Survey Report 2018

2 Contents Welcome to the HLB Sheehan Quinn Succession and Estate Planning Survey Report About HLB Sheehan Quinn... 3 Executive Summary... 4 Wills... 4 Intestate... 5 Enduring Power of Attorney... 5 Succession Plans... 5 Adequate Provision for Family... 5 Findings... 6 Q1 Gender of Participants... 6 Q2 Age... 7 Q3 Marital Status... 8 Q4 Age of Youngest Child... 9 Q5 When Was Your Will Prepared or Last Reviewed Q6 Do You Know The Rules That Apply To Your Assets If You Die Without a Will Q7 Do You Know What an "Enduring Power of Attorney Is & Do You Have One Q8 Have You Taken Steps To Ensure The Financial Security Of Your Family If You Were To Die Suddenly Or Became Unable To Work Q9 If You Own A Family Practice, Do You Have A Formal Plan In Place For Business Succession. 14 Q10 If Your Child Inherited The Family Home, Would They Have To Sell Assets To Pay The Tax. 15 Estate and Succession Planning Team

3 Welcome to the HLB Sheehan Quinn Succession and Estate Planning Survey Report. Having fostered business development for over 40 years, HLB Sheehan Quinn is committed to delivering world class service across a number of areas including accountancy, taxation and business advisory. Succession and Estate Planning is one of our areas of expertise and keeping up to date is of utmost importance to us. Continually engaging with business owners is an important element to this. We asked entrepreneurs and professionals to participate in this survey, in order to study the current views on Succession and Estate Planning in Ireland. We are excited to share the market insights we gained from this research with our clients and contacts. The findings of this survey are detailed throughout this report. If you have any questions, or would like to discuss matters in more detail, please contact myself or one of our experts. Maura Duffy, Partner, HLB Sheehan Quinn Maura Duffy Partner HLB Sheehan Quinn 2

4 About HLB Sheehan Quinn HLB Sheehan Quinn are leading accounting, taxation and business advisors to international, domestic and private clients in Ireland. Based in Dublin, the firm focuses on combining expert business insights with smart thinking based on deep area knowledge to provide excellent assistance and advice to clients. Our proactive client service and collaborative way of working mean we connect with our clients vision to maximize opportunities. We go beyond the conventional and standard compliance based service that is offered by many accounting firms. With 40 years experience serving Irish family businesses, HLB Sheehan Quinn s culture is rooted in family values. We take the time to understand your unique requirements and our dedicated advisors will assist you in ensuring the tax efficient transfer of your assets either during your lifetime and/or afterwards. The estate and succession planning practice is led by Maura Duffy and Bruce Stanley Partners. This survey was initiated to gain a better understanding of the current approach to estate planning and succession related matters for business owners and professionals, and to identify and share insights such as common issues, challenges and opportunities relating to these matters. HLB Sheehan Quinn is a member firm of HLB International, a leading global network comprising of locally well-established accountancy, taxation and advisory firms. 3

5 Executive Summary Launched in early 2018, this survey focused on asking some key questions about estate planning and succession to professionals and business owners across Ireland. The survey results represent the views of participants and provide an insight into how individuals are feeling about these matters now and their plans for the future. The results of the survey indicate the following: Of this sample, 55% of Irish professionals and business owners have a Will, almost double the national average based on a recent national survey. Only 8% have reviewed their Will within the last year. 60% are not certain of the rules that apply to assets should someone die without a Will. Almost 50% of those surveyed do not know what an Enduring Power of Attorney is. Over 50% of participants feel like they need to do more to ensure their family s financial security if they were to die suddenly or were unable to work. Of those surveyed that run a family business, 82% do not have a formal succession plan in place for their business. Wills The percentage of the general population with Wills in Ireland is estimated to be 28% according to a recent survey carried out last year. Our results indicate that the level of professionals and business owners with Wills is almost double that figure at 55%. Compared to PAYE employees, business owners and professionals are likely to have more interaction with advisors, such as solicitors and accountants. This may go way some way to explaining the significant increase in numbers. Individuals who have advisors looking after their interests seem twice as likely to put a will in place. Whilst the general population is aware of the importance of making plans for the future it can be put on the long finger. Business owners are far more likely to address these matters as they become trained to think long term and strategically about their future. They also have trusted advisors who can guide them through the process and stress the importance of making the right provisions. 4

6 Of those who had put a Will in place 15% created or reviewed their will in the last year, 45% within the past 5 years and 40% had not reviewed them for more than 5 years. As the economic environment has changed over the past 5+ years with the market recovery there is a risk that many Wills may be outdated. Intestate A remarkable 60% of people were not sure what would happen to their assets in the event that they died without a will or intestate. The rules of intestacy are important to know. Many people seem to assume that their assets will pass to their spouse, but it s not that simple. The deceased s children will also have rights. The distribution of assets on intestacy can cause problems following a death so for the sake of the loved ones we leave behind it s important to know what will happen. Enduring Power of Attorney Despite having regular contact with advisors, almost half of those surveyed did not know what an Enduring Power of Attorney entailed. We suspect the 50%+ that did know and the 12% who actually had an Enduring Power of Attorney in place would be well above the national average. The number of people who were aware of Enduring Powers of Attorney is aligned with the numbers that have a Will in place (55% & 52%). An Enduring Power of Attorney may not be for everyone, but it is important to know what it is and why they are used. Succession Plans One of the more surprising findings was an astonishing 82% of people running a family business had no succession plan in place. It is important to have a long term exit plan, whether that be a sale to a third party, passing the business to the next generation or liquidating the trade. Adequate Provision for Family Other findings showed that more than half the people did not have adequate provision for their family in the event of their death or incapacity with 20% having taken no action at all and 40% the people surveyed did not know if their children would have to sell assets to fund a tax liability if they inherited the family home. 5

7 Findings Detailed in this section are the results and findings we gathered from this survey. The following findings are entirely based on the sample of Irish professionals and business owners that responded to this survey. Q1 Gender of Participants Gender Breakdown 6

8 Q2 Age Age Profile Overall 32% of those surveyed are aged % are aged % are over 60 years old 17% year under 39. 7

9 Q3 Marital Status Marital Status Overall 84% of this sample are married. 15% selected single as their marital status. 1% selected other as their marital status. 8

10 Q4 Age of Youngest Child Age Profile of Children Of this sample, 46% of individuals youngest child is under 18 years of age. 34% stated that their youngest child is over the age of % of participants do not yet have children. 9

11 Q5 When Was Your Will Prepared or Last Reviewed Will Prepared or Reviewed Of this sample, 45% of respondents do not have a Will. Of those surveyed, 22% prepared or reviewed their Will more than five years ago. 25% prepared or reviewed their Will between 1 and 5 years ago. Only 8% have prepared or reviewed their Will within the last year. Of those with a Will 40% have not reviewed the will within the past 5 years (22/55) 10

12 Q6 Do You Know The Rules That Apply To Your Assets If You Die Without a Will Knowledge of Rules without Will Of those participating in this survey, 40% stated they are aware of the rules that apply should they die without a Will. 18% said that they were unaware of what would happen. 42% have a vague idea of the rules that would apply in this situation but could not be sure. 11

13 Q7 Do You Know What an "Enduring Power of Attorney Is & Do You Have One Enduring Power of Attorney 12% of individuals surveyed have an Enduring Power of Attorney. 41% know what an Enduring Power of Attorney is but do not have one. 47% do not know what an Enduring Power of Attorney is. 12

14 Q8 Have You Taken Steps to Ensure The Financial Security Of Your Family If You Were To Die Suddenly Or Became Unable To Work Provision of family in Of those surveyed, 47% state that they have they have taken adequate steps to ensure their family s financial security should they die unexpectedly or become unable to work. 20% said that they have not taken any steps to prepare for this scenario. 33% have taken some steps but would like to do more. 13

15 Q9 If You Own A Family Practice, Do You Have A Formal Plan In Place For Business Succession Business Succession Of those surveyed that run a family business, only 18% have planned for business succession. 82% do not have a formal succession plan in place for the business. 14

16 Q10 If Your Child Inherited The Family Home, Would They Have To Sell Assets To Pay The Tax Paying tax on Inheritance 41% of those participating in the survey do not know if their child would have to sell assets to pay the tax incurred in the event that they inherit the family home. 25% stated that their child would be required to sell assets. 34% said that their child would not have to sell assets. 15

17 Estate and Succession Planning Team We know the heartache that a death or disability would bring to the people closest to us and we would certainly not like to add to their grief by failing to put our personal affairs in order. Succession planning is vitally important for ensuring the continued success of any business, in identifying and developing the talent which will fill critical roles in the future, or importantly in times of crisis. Estate planning is important for anyone leaving assets to the next generation but it should also cover the situation where serious illness results in incapacity. We encourage you to put this important issue on your to do list. A short meeting could make all the difference to your peace of mind. Maura Duffy Audit & Business Advisory Partner mduffy@hlbsq.ie Bruce Stanley Tax Partner bstanley@hlbsq.ie 16

18 Thank you for reading our Estate and Succession Planning survey report. Please get in touch today if you would like to discuss in confidence how we can assist you. CONTACT US HLB Sheehan Quinn Accountants, Taxation The Courtyard Carmanhall Road Sandyford, Dublin T F E info@hlbsq.ie 17