Recently accumulated wealth and complicated family issues are just some of the issues pushing people to make a will, writes Caroline Madden

IN THE not so distant past, making a will was almost seen to be tempting fate. In the superstitious belief that it might somehow hasten their demise, people tended to put off this admittedly morbid task for as long as possible. Of course, that meant that, all too often, they passed away without ever getting around to it.

Fortunately people are now more savvy financially and are putting their affairs in order at a younger age. However, as a result of shifting social and economic dynamics, a little extra thought and planning is often required when making a will these days.

One of the biggest changes evident in Irish society over the last decade has been the creation of previously undreamt of amounts of wealth. Stephen Hamilton, partner at AL Goodbody, has noticed that this newfound affluence has brought the issue of estate planning to the fore.

"In the old days, people would die quite modestly wealthy, but now a whole generation of wealth has been created and people are starting to think in detail about this," he says.

According to Susan O'Connell, partner at McCann Fitzgerald, it is now common for very wealthy people with young children to set up trusts under their will to protect their assets for the benefit of their offspring. A discretionary trust will often be used as this gives the trustees the power to decide when the children should benefit from the will.

"The advantage of that is that you can take into account the size of the estate and the maturity of the children," O'Connell explains. "So it may be that you have one child who's very mature at 20, or you might have another one who's maybe not ready to receive large amounts of capital till they're 25 or 30."

Hamilton has observed another strong trend impacting on estate planning. "The old traditional standard family unit is there still, but there are a lot more broader definitions of the family unit than there used to be - cohabitees, children born out of the marriage and all these sort of things," he says. "All sorts of wider family issues need to be provided for very carefully."

In the case of cohabiting or same-sex couples, making a will is imperative. If a person dies without a valid will in place, they are said to die "intestate" and the laws of intestacy determine how their assets are to be distributed.

For example, in the case of a married couple, the law specifies that the surviving spouse is entitled to the entire estate of their late husband or wife if they have no children, or two-thirds of the estate if they have children (with the remaining third divided equally among the children).

If, on the other hand, the couple is unmarried, the surviving partner has no inheritance rights whatsoever. Even if they are left a bequest by their partner in a will, the surviving cohabitee will not be entitled to the inheritance tax exemption that applies to spouses.

Instead they will be treated as a stranger for tax purposes, which means that a significant inheritance tax bill could well arise.

They may, however, be able to avail of dwelling house relief, in which case the inheritance of a house which has been their main residence may be exempt from tax, as long as certain conditions are fulfilled.

Estate planning can get even more complex in cases of marital breakdown. Even if a couple is legally separated, they remain technically married, so they may still have succession rights.

O'Connell says that even if the couple renounce all such rights during the separation process (which is very common), it is still possible for one party to make a future application to court for provision from their estranged spouse's estate.

"They have to show that they weren't properly provided for in the context of the separation." This type of application can also be made by divorced spouses. "Certainly there have been applications which have been successful," she warns.

In order to prevent this from happening, it is important to specify - either in the separation agreement or divorce order as the case may be - that no such application can be made by either party.

Another issue that O'Connell has encountered relates to foreign divorces.

Before divorce was legalised in this country in 1997, some couples went to a foreign jurisdiction (the Dominican Republic was a particular favourite) for a divorce, and then "remarried" without realising that their divorce was not recognised in Ireland. Many such couples get a nasty shock down the line when they discover that they are actually still married to their first spouse and that their second marriage is not valid.

"That's the one issue that people do need to face up to, because if they've got a foreign divorce, it's very often the case that their estranged spouse has rights in relation to the estate," O'Connell says.

"But equally, and possibly even worse, is the fact that the person that they think is their current wife [or husband] isn't and doesn't have any rights in relation to the estate and, for tax purposes, would be treated as a stranger."

Individuals who find themselves in this unfortunate situation should seek legal and tax advice in order to resolve the issue.

Wills are not often contested, but it does happen, for example if the children of a first marriage feel aggrieved by the inheritance of a step-parent or children of the second marriage.

"If a child feels that his or her parents haven't provided for them properly they can always go to court," says Hamilton, adding that this is a very expensive route to go down.

Given the vast wealth created here in recent years, Hamilton predicts that charitable legacies will become a very big feature of Irish wills over the next decade or two.

"I have been involved in two large charitable trusts being set up under people's wills which have been quite substantial . . . I think there'll be an awful lot more work in that area," he says. "There are a lot more inquiries. People are obviously thinking about these things."

Ireland's monied classes may be putting a lot of thought into how best to pass their wealth on to the next generation, but what about the ordinary person who has little more than a big mortgage and a small savings account to their name?

Should they bother making a will?

Valerie Carroll of the online wills service www.wills.ie stresses that everyone should make a will even if they have no assets, as their circumstances could quickly change, for example if they receive an unexpected windfall such as an inheritance. "It's like exercising a vote to decide what happens [to] your assets," she says.

Those on a tight budget may be tempted to cut corners by drawing up a will themselves using a cheap or free template, but the general consensus is that this is a false economy.

The cost of a standard will prepared in a solicitor's office generally comes in under €200. In return for the peace of mind that comes from knowing your possessions will be distributed in accordance with your wishes, it's a small price to pay.

"Its the most important document you'll ever do in your life, because it's the only document that speaks for you after you're dead," Carroll says. "Therefore why would you go and try and do it cheaply. Why not have it done correctly?"