ARF Estate Planning Considerations

For many clients in retirement, their Approved Retirement Fund (ARF) is a significant portion of the value of their estate.

The residual value of an ARF in retirement depends on a number of variables, such as the investment performance of the underlying assets, and the rate of income withdrawals from the fund.

As the ARF forms part of the estate on death, it is paid out in line with either your Will or the Succession Act.

While it does not automatically transfer to a spouse or civil partner, if it is stipulated in your Will then the ARF can be transferred to a new ARF in their name.

In all other cases, the funds are wound up and the proceeds are passed to your estate. If any income tax is due, the ARF provider will deduct this before paying the proceeds of your fund to your estate.

The differing tax treatments depending on who you leave the ARF to in your Will (see table below) means that there may be significant tax savings available with planning.

This is because the €335,000 Capital Acquisitions Tax-free threshold continues to be available to your adult children if they inherit the ARF directly and are over 21.

This potentially advantageous estate planning outcome of ARFs is just one consideration when planning for your retirement.

Other aspects of your Approved Retirement Fund to consider include:

• Planning your Retirement Income requirements

• Investment Advice, including the option to invest for income

• Managing the timing and frequency of your income drawdowns

Harvest Financial Services will work with you to maximize the benefits of your post retirement fund to secure your income in retirement. For more information, or to arrange a meeting to discuss the suitability of an Approved Retirement Fund for your retirement provision needs, please contact us on 01 2375500 or email us at justask@harvestfinancial.ie.

Approved Retriment Fund Pension