Q I own my own home. However, my immediate siblings are all deceased. I want to avoid, or limit, the inheritance tax for whoever leaves it. I was wondering if I could take the value of my home and divide it among a number of people below the amount that would be taxable.
AN According to lawyer Susan Murphy of MakeMyWill.ie, to reduce inheritance tax, it would be a good idea to spread out your estate so that more beneficiaries can take advantage of the tax-free threshold. Currently, your nieces and nephews can inherit up to €32,500 each, and anything over this figure is taxed at 33%, she says. More distant relatives, such as cousins or friends, can inherit up to €16,250 each before any inheritance tax. Charities are exempt. It’s worth noting that if you state in your will that your house is to be sold and the proceeds are divided among the various beneficiaries, if any of them will have a tax liability, they won’t have to pay it until after the house is sold. sold, when cash would be available to pay for it. Ms. Murphy added that if you are going to bequeath exact amounts to your beneficiaries, keep in mind that there could be a residual or even a shortfall. She may want to leave percentages instead.
Q We don’t have private health insurance, but have had a cash plan with HSF Health Plan for many years. I see that all the health insurance plans are increasing again and I am worried that my cash plan will now become unaffordable as I am currently jobless.
AN The first point to note is that most of the recent increases refer only to private health insurance plans, such as Vhi, Laya and Irish Life Health. Cash plans are a separate range of products available from HSF Health Plan, according to Dermot Goode of Totalhealthcover.ie. He said the good news is that this company hasn’t increased its rates since 2017 and, at the time of printing, he wasn’t aware of any imminent price increases on cash plans. Goode said this should mean he can keep his cash plan coverage at the same cost for now. If a price increase is announced at some point in the future, he recommends that you contact HSF directly to discuss alternative cash plans that may better fit your budget. In other words, you should first consider all of your options before you drop your coverage.
Q I get stressed about money. I have debts since I separated. I have a full-time job, but I don’t know where my money goes each month. I have some debt. How can I manage the money and start saving?
AN Since he has a full-time job and a steady salary, his income situation is stable, according to Frank Conway, founder of financial wellness provider MoneyWhizz and a qualified financial advisor. Your problems seem to surface on the expense side, and this is where you should put your primary focus, he says. You have indicated that there is some debt, but you do not say how much the debt is and if any of it was contracted jointly with your ex. However, if your name is on the debt, you need to make sure it is managed.
When it comes to expenses in general, which includes essential expenses and any discretionary expenses, it is crucial that you have visibility into them. The most effective way to do this is by using a budget sheet. Mr. Conway says that he can download one for free from MoneyWhizz. Here, he will fill in his information about his income and then all his expenses.
If you can track all of your spending for at least three months, this will give you a very detailed account of where your money is going. A good trick here is to use your current account statement as the main source of information and, if you use them, three months of credit card statements. Also, for greater visibility into spending, collect as many receipts as you can to double track all of your spending, she advises.
This process may seem labor intensive, but it is a proven method for building a solid financial foundation. When you have all the details of the expenses, you will have to question them. What you want to identify is whether or not you have the means to save some money each month. If you do, build a rainy day fund. If you still have a lot of debt to pay, look for ways to speed up those payments.