Q&A

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 11-15 D'Olier Street, Dublin 2, or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.

Wills and foreign assets

I made a will in Ireland some years ago, my husband being the primary beneficiary of my assets. I have contingent beneficiaries otherwise. I am now living in the United States, where my husband has several properties. In the event he predeceases me, I inherit those properties. Do they now form part of my estate and how does this work tax-wise? Also what is the best way to avoid heavy taxation or what should I do now to work towards that goal? He has no will made yet and I wonder is it necessary for me to make a will out here?

Ms M.C., e-mail

The first and most important thing to say is that wills involving assets in different jurisdictions are, as a rule, considerably more complex than those involving assets in only one place. As a result, there is in my view, absolutely no shortcut to properly preparing a will; anyone in this situation will simply have to consult a professional, specifically one familiar with such crossborder estates and the tax provisions applicable.

I am not familiar with US inheritance law, but I would be very surprised if you could be certain of inheriting all your husband's properties if he has made no will, as you state, and were to predecease you. A number of people might be in a position to make claims on his estate in such a scenario.

As such, it would be well worth persuading your husband to make a proper will to ensure his estate is disbursed in accordance with his wishes and not those of the Irish or US authorities. In most cases making such a will is reasonably simple and not time-consuming although the precise use of language is important and professional advice with even the simplest will is a help. Again, I cannot speak for the US, but the costs of drawing up a basic will - one in which the estate or the bulk of it is passing to a spouse or some contingent beneficiary in the event of the spouse predeceasing the benefactor - are minimal in the Republic.

In the event, if you do inherit any properties or other assets from your husband, they do form part of your estate from the time you receive them subsequent to his death. Therefore, it is not a bad idea to put plans in place which can be implemented should he predecease you. Basically, on the tax front, if they are part of your estate, your inheritors are liable to tax on these items in the same way as any other part of your estate, depending on the location of the asset and the inheritors and the tax codes applicable to both.

In general, the best way to avoid a heavy tax bill is to spread your estate as widely as possible. The less each person receives, the less they are likely to face in terms of tax bills. However, to get a proper assessment of how best to disburse your assets and what use if any to make of provisions allowed for by the relevant tax codes, you would really need to seek professional advice.

The same goes for the wisdom of making a will in the US, although, as a rule, it is a good idea to review your will at regular intervals as your circumstances and those of your dependants change. This ensures your assets go where you want at the time of your death. Remember, in the event of your death, the most recent will is the one which will - in almost all circumstances - be accepted as the valid expression of your intentions.

Single earning families

Would it be illegal to set up a mutual organisation, run by the earners in single income families and employing only those non-earners in those families, where the earners pay a subscription of £10 per annum and the non-earners receive a taxable £10 as wages? One could argue that it was a knowledge-based organisation in that the employees were being paid to think.

Mr A.B., e-mail

Is it possible for a family or a spouse to employ one of the spouses as a childminder/carer/housekeeper in the home? Would this entitle them to retain the full married couple's standard rate band, under Minister McCreevy's Budget 2000 proposals?

Mr T.H., e-mail

I was wondering how long it would take for the minds to start working through options to get around the Minister for Finance's intention in the Budget effectively to penalise single-income families a-vis the in relation to their double income peers.

The truth is we won't know exactly what is allowed until the Finance Bill, or more properly the Finance Act, once it is passed by the Oireachtas.

Already, there have been considerable changes since the Budget was announced. The Taoiseach has signalled that others are on the way on the question of stock options and there seems every likelihood that other amendments will be tabled to the tax packages announced.

Precisely what the situation with single-income families will be is impossible to say at this stage. What is certain is that the Revenue will require convincing that people supposedly in employment are precisely in that, not simply creating a semblance of employment for the purposes of taking advantage of the tax code. Remember that employing people carries its own burden in both paperwork and employers' tax liabilities.

I have no doubt that accountants will be in a better position to advise people on what options are available once the Finance Bill is published, although I wouldn't get one's hopes up too quickly on the ease of circumventing the Minister's intention of getting more women to return to the workplace.