The Vultures have landed-What do I do?

The term Vulture Fund is not new as this was the method used by Nama, IBRC, Anglo, Bank of Scotland and National Irish bank (to name a few) who used the sale of their loans books to 3^rd parties to clear up their under performing loans.

These Vulture Funds or Investment Funds as they prefer to be called, have bought these bad loans from the main banks at a substantial discount and their only mission is to recover as much as possible from the debts they have bought. Given that both PTSB and Ulster bank announced earlier this year that they will sell circa 25,000 loans to Vulture Funds; this is already a hot topic in 2018 with demonstrators gathered outside the Ideal Homes Exhibition at the RDS on Saturday 21^st April 2018 to protest the event’s main sponsors Permanent TSB.

This sale of loans by PTSB has now come to fruition by todays announcement that PTSB has sold 10,000 loans to an investment fund managed by Start. The portfolio contains around 10,700 non-performing loans, 7,400 of which are owner-occupier mortgages.

I think that no more than the IMF 10 years ago the advent of Vulture Funds entering our financial system is a wake up call that the years of kicking the can down the road by the Irish banks is now over.

Unlike the main Irish banks these vulture funds are not concerned with the negative publicity of pursuing these debts through any means possible. This could be through debt collection agencies, legal proceedings, home repossession and general harassment from their arrears support teams.

The Vulture Funds business model is short-term, they have no interest in having a long-term arrangement or relationship with their new customer. They just want cash!!!

Where does this leave the hundred thousand plus home owners who are in fear of losing their homes…….it leaves them in a tough spot.

Despite the fact that debt solutions were introduced by the Government in 2012 through the personal insolvency legislation less than 2,000 people have availed of the legislation.

The main reason in my experience is that they don’t understand that this solution applies to them and that it can help them. There is a lot of misinformation (I call it pub talk) about the legislation but from my hands on experience there is no other method to resolving your debt than by getting Court protection to save your home through a Personal Insolvency Arrangement (PIA) or a Debt Settlement Arrangement (DSA).

The good news is that 90% of those that avail of the personal insolvency legislation through a PIA retain their family home and at the end of the process they end up with a sustainable mortgage and their other debts are written down as part of the process.

The personal insolvency legislation is the only method to protect yourself from your creditors and to protect your family home.

These arrangements are working and we have put 100’s of people through the process in the last number of years. In some cases they have already exited the process and they are out the other side and they have started to finally move on with their lives.

There is not a specific profile of an insolvent person as each case is different. For example the problem could be a split loan on a family home that can never be paid, a property portfolio that will never recover, debts or judgements due to a business failure, revenue debts or residual debt left after the sale of a property or development site etc.

In my experience most of the people I meet know they are in trouble they just don’t know how to solve that problem.

I am one of less than 30 active PIPs in Ireland who specialise in the Personal Insolvency Legislation. I would recommend that you contact an active PIP to see how the personal insolvency legislation can help you to resolve your debt problems. The first question I would ask your PIP is how many cases they manage and how many cases they have gotten approved.

If you are struggling to manage your debts and you want to know how to get help then please click on the links below for more information on personal insolvency and on Abhaile which is the Government’s free mortgage arrears support scheme, which includes a free Personal Insolvency Practitioner consultation for those worried about their debts and under threat of repossession of their family home.

www.backontrack.ie

www.mabs.ie/en/abhaile/

Alternatively please send me an email setting out your situation to mark.ryan@quintas.ie and I will get back to you with a plan on how to solve your debt problem.

Kind Regards,

Mark Ryan, CPA,

Personal Insolvency Practitioner (PIP),

Director, Quintas

Mark Ryan is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner.

Tips on how to deal with your creditors.

A lot of the time I get involved in cases at a late stage where the relationship between the borrower (debtor) and their creditors has broken down and unfortunately the creditors are in the process or have issued legal proceedings against the debtor.

Having unsustainable debt is a very difficult and stressful position to be in as it involves constant phone calls, letters and communication from the creditor as they try to get the case resolved. Thankfully with some hard work and straight talking we can get to a point that in most cases there is a solution that both parties can be agreeable to.

The single biggest flaw in the relationship between the debtor and their creditor is a lack of trust and poor communication on both sides.

In most cases the debtor knows that there is a problem but they don’t know what the solution is and are not confident to deal with the bank themselves so they stop talking and communicating their current financial position to their creditor. This only leads to the creditor becoming more aggressive in chasing the debtor which only makes the situation worse.

It is likely that the debtor has been dealing with the problem for the last 7/8 years since the economic collapse of the Irish economy and the free line of credit from the banks stopped.

My role in these cases whether as a PIP (Personal Insolvency Practitioner) or as part of a debt restructuring arrangement for my client is to act as a mediator or ‘referee’ between the parties. As I have said in most cases there is a middle ground that can be agreed on in the short term, which will then allow us over time to on a medium term plan to bring stability to the situation and take the heat out of what can have become a very fraught relationship.

The following would be a few of the tips I would recommend on how to deal with your creditors:

1. Communicate – with your creditors at all times,
2. Mediate – if you are unsure what to do ask a friend, parent, family member or business associate assist you in your discussions with the bank,
3. Co-operate – this is simply understanding and following the banks protocols and providing them with the information that they have requested,
4. Calculate – work out what you can afford to pay and spread this among your creditors,
5. Prioritise your secured creditors, especially your family home,
6. Be honest – if you are struggling (e.g. Out of work, sick etc) tell the bank and keep them up to date on your situation,
7. Take notes – keep a copy of all correspondence and note what was discussed in your phone call as you may need this information at some stage in the future,
8. Understand the ground rules – the bank want to be paid what they are owed but will work with you if they can,
9. Educate yourself on the new personal insolvency and bankruptcy legislation – this is very important if you find that you cannot meet all of your debts as they fall due or you have unsustainable debt,
10. Know your rights – you have rights and the bank know this so make sure you understand how you should be treated fairly by your creditor,
11. Don’t fear the problem face up to it – be proactive rather than reactive with your financial situation,
12. Look after your mental health – this is very important as if your health deteriorates your financial position could get worse,
13. Don’t give up – they are plenty of solutions and options open that could solve your financial problems,
14. Get good advice – It is critical to have the right person working on your behalf as signing up to the wrong deal will only make the situation worse,
15. Be patient – as it can take sometime to get an agreement in place,
16. You are not alone – unfortunately no one has been left untouched after the economic crash and there are many people in a similar position to you. One of the main reasons the new personal insolvency legislation was put in place was to ensure that anyone with unsustainable debt would have a chance at a fresh start in 5/6 years once their DSA/PIA had been completed.

Quintas are currently running open information evenings on debt resolution and if you would like to avail of a FREE 1:1 appointment with Mark Ryan the Quintas is a Personal Insolvency Practitioner (PIP) contact 021 4641400 or email info@quintas.ie

What happens to the family home if you become insolvent?

This is probably the 1^st question I get asked in my initial meeting with a client. The answer isn’t that simple as there are various options depending on the client and the debt involved.

There are a number of methods of dealing with debt on the family home but the main ways would be informal restructure through discussions with your bank under the MARP (Mortgage Arrears Resolution Programme), formal agreement under the new personal insolvency legislation or the final act which is bankruptcy. The banks must apply the conditions of MARP in all cases involving the family home.

None of the above options are to be feared but if you are unsure of your own position I would suggest that you contact someone to find out as you might find that it may not be as bad as you think.

Sometimes finding out what is the worst case scenario and then leaving it to a professional to negotiate on your behalf can instantly take the stress out of the situation.

Prior to the enacting of the new personal insolvency legislation there were only 2 options to manage the debt with a family home either you could reach an informal agreement with the bank or you couldn’t and the property was repossessed or sold and you still remained liable for any net residual debt that remained after the property

A core protection of the new personal insolvency legislation is that a PIP’s (Personal Insolvency Practitioner) role is to where possible keep a family in their home. This is one of the key protections of the legislation and there are a number of options involved which would include a write-down on the debt to a more sustainable level under a PIA (Personal Insolvency Arrangement). Any proposed write-down would be subject to agreement by the creditors at a creditors meeting.

The main disadvantage in bankruptcy as regards the family home is that all assets of the bankrupt are transferred to the OA (Official Assignee) who in turn can sell same to pay off some of the debts due to the creditors.

It is important to understand that all is not lost if you or you partner are bankrupt. Under the legislation there are a number of options where only one of the parties to the home loan is bankrupt. For example if there was positive equity in the family home the OA would look to realise their share (50%) of this equity. If the home loan is in negative equity the OA may not be interested in the loan and may accept a nominal fee to transfer their interest in the property to the spouse/partner of the bankrupt.

If both parties to the mortgage are bankrupt it becomes a little more difficult but there are still options available to the individuals. It is important to note that the OA cannot sell the family home without first obtaining permission from the High Court.

I would suggest that if you are concerned at anytime about your personal debts you should contact a PIP to see what your options are and you may find out that these options are not as bad as you though. This could result in some light at the end of the tunnel after what can only be considered as a very difficult dark period over the last 5/6 years as the economy was hammered during the economic crisis.

As the economy in Ireland starts to improve it is well time that those in personal debt get the opportunity to get themselves back on their feet and on the road to solvency.

Mark Ryan, Quintas PIP

Quintas are currently running FREE Debt Resolution Open Evenings on Wednesdays.  If you would like to make an enquiry or find out more contact us on info@quintas.ie or call 021 4641400.

Mark Ryan is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner.

Employment and Investment Incentive (EII)

Employment & Investment Incentive (“EII”) scheme is one of the final remaining opportunities for individuals to claim Income Tax Relief at the Marginal Rate of 41%. While it provides Tax Relief for individual investors it also provides companies with an instant cash flow benefit. This investment scheme is designed to promote both job creation and investment in Small & Medium Size Businesses using investment capital.

EII gives opportunities to individuals to invest up to a maximum of €150,000 in exchange for shares in a particular Corporate Trade for a 3 year period. EII promotes a 3 year investment period which is evident from the 41% refund available being spread out between the start and the end of the holding period. The initial Tax Relief of 30% may be claimed in the year of investment once the shares are issued. The additional 11% benefit is only received by the investor if the company has met its requirements of increased employment or investment in Research and Development.

There is a claw-back of the 30% relief claimed by the investor if they sell their shares within the 3 year period or if the company does not continue to qualify as an EII company for the duration of the investment.

It is worth noting that Finance Act (No. 2) 2013 removed EII from the high earners restriction for a period of 3 years. As a result of this the scheme has become more attractive for high net worth individuals.

Example

The following are the potential returns available based on various investment amounts, assuming an overall return of €1.00 for every €1.00 invested.

	€	€	€
Amount Invested	10,000	50,000	150,000
Tax Saving 30% in 2014	3,000	15,000	45,000
Tax Saving 11% in 2017	1,100	5,500	16,500
Sale of Shares in 2017	10,000	50,000	150,000
Total Received from Investment	14,100	70,500	211,500
Net Gain on Investment	4,100	20,500	61,500

 

If you would like to find out more please contact Quintas on 021 4641400.

 

 

Lights Camera Action……

If like me you always had an interest in film but never quite made the cut in acting class, there is still an opportunity for you to get involved. Section 481 TCA 1997 film relief allows individuals to get tax relief for an investment in a qualifying film or television series. This investment relies on the successful completion of the film/television project.

Successful shows which have availed of this scheme include Penny Dreadful, Mattie, Tashi & The Widower to name but a few.

Film Relief is available, generally for high income individuals, who invest up to a maximum of €50,000. Individual investors can invest amounts exceeding €50,000, but only €50,000 relief is allowed in one tax year. Any amounts exceeding €50,000 can be carried forward to the proceeding tax years. Therefore it is generally recommended investing a maximum of €50,000 in any one year.

To get the tax benefit from film relief an investor would typically raise the €50,000 investment slot by part equity / part loan agreement. Based on the credit application being approved, the investor issues a cheque for €17,500 and the remaining €32,500 is financed by a loan, which is applied for through the film production company. The individual then subscribes to shares of €50,000 and Revenue will issue a Film 3 certificate to confirm the investors’ investment.

The investor then makes a claim to the Revenue Commissioners and receives tax relief of 41%, assuming they have enough income at the higher rate. Based on a €50,000 investment, the investor should receive a refund of €20,500 from Revenue.

PAYE investors should see this refund on their payslips before the end of the year in which they invest. Self-assessed investors will have to wait until they file their tax return before seeing their return.

The overall return for an investor will be €3,000 if they invest €50,000 in the scheme.

If you are interested in investing in film relief, please contact us on 021-4641400 or email info@quintas.ie.

Blog by Laura Simpson, Trainee Accountant, Quintas

7 tips to get the right Life Insurance

Here are a few tips on how to get the right Life Insurance

1 – Comparison shop online. There are many sites that aggregate offers from the top insurers for one-stop shopping. Quintas Wealth Management can provide you with a Life Insurance quote from all listed Irish Insurance companies. Quintas Wealth Management does not charge a fee for this service.

2 – Consider features besides price. Insurance is only as good as the company that stands behind it. So always compare the death benefit, claim history, policy premium, and insurer’s rating.

3 – Find out what your employer offers. Insurance through a group policy may be of good value, but it’s smart to supplement it with a private policy in case you lose your job. You can have multiple life insurance policies, and that may be required to have enough coverage.

4 – Purchase enough coverage. Most people underestimate the amount of life insurance that’s needed to protect their families. A rule of thumb is to have at least 3 times your annual income—but you may need much more depending on the age and health of your dependents; or any loans/ debts outstanding.

5 – Don’t forget to adjust your coverage. Re-evaluate your death benefit on an ongoing basis—especially as you earn more, change jobs, have a child, get married, get divorced, experience a serious illness or disability, begin caring for an aging parent, have a death in the family, or start a business.

6 – Don’t cancel a policy before getting a new one. If you find a more affordable life insurance policy, be sure the new one is in force before you cancel the old one so there’s no lapse in coverage.

7 – Speak to a Financial Advisor if you have questions. At Quintas Wealth Management you can speak to a financial advisor if you have a question about what type of life insurance policy is right for you or how much you really need. Quintas Wealth Management does not charge a fee for this service.

Quintas Wealth Management can be contacted on 021 4641480 or email info@qwm.ie

Best Practice for Charities

After many months of continuous bad press concerning the management of a few charitable organisations, all charities may feel themselves tarnished with the same brush. The revelations of how some charities have been managed and how the funds they raised were used have caused huge alarm among the public. In the absence of full implementation of the Charities Act 2009, the absence of a strong and ethical board, poor internal corporate governance policies and the lack of a uniform framework of how best to disclose their financial stewardship, some charities are left struggling to achieve “Best Practice for Charities”.

Charities Act 2009

The Charities Act 2009 was enacted on 28 February 2009 but to date has not been fully implemented and the aim is to undertake it in stages.

The purpose of the Charities Act 2009 is to reform the law relating to charities in order to:

• ensure greater accountability
• protect against abuse of charitable status and fraud
• enhance public trust and confidence in charities and increase transparency in the charity sector

Important parts of the Act will provide for:

• a definition of charitable purposes for the first time in primary legislation
• the creation of a new Charities Regulatory Authority to secure compliance by charities with their legal obligations and also to encourage better administration of charities, (a CEO has been appointed to the office, with operation of the office to hopefully begin later this year)
• a Register of Charities in which all charities operating in the State must register
• the submission of annual activity reports by charities to the new Authority
• updating the law relating to fund-raising, particularly in relation to collections by way of direct debits and similar non-cash methods
• the creation of a Charity Appeals Tribunal
• the provision of consultative panels to assist the Authority in its work and to ensure effective consultation with stakeholders.

Review of the Board, Management & Corporate Governance Procedures

All charities need to review their boards, their management and their corporate governance procedures to identify that they have the personnel, policies and procedures in place that will ensure the proper management of the charity and that they will also achieve the objectives of the charity. The personnel need to be adequately experienced for their roles and have the correct moral and ethical beliefs for the proper management of the charity.

Good corporate governance is achievable, however it has to form part of the culture of the organisation and all charities should implement a programme to communicate and raise awareness amongst all participants within the charity of its policies and procedures.

Accountability and Financial Reporting

The Charities Act 2009 has not yet prescribed the financial reporting format which charities are to use when presenting their financial information for a period, but it is widely expected that it will be similar in nature to what is currently used in the UK by the Charities Commission. In 2005 the UK Charities Commission issued a Statement of Recommended Practice (SORP) in connection with the preparation of financial statements by charities, which some of the larger charities in Ireland have used in the preparation of their financial statements.

Charities may well be advised in preparation for the new regulations and reporting requirements to review their day to day operations and internal workings on matters such as how they raise their money, who is involved in raising their funds, what are the charity’s costs and how the funds raised are used. This exercise should bring to light any costs and practices which the public would deem to be both wasteful and ethically questionable and that also may fall foul of the new legislation.  Any problems arising should be addressed and rectified immediately.

Most charities will welcome the regulation and requirements of the Charities Act 2009, to prove how they have been compliant and to show how they have been conducting the charities’ operations. They will want to present the information publicly, so that the charity and its’ board are seen to be accountable, transparent and above all beyond reproach in all the financial transactions that have taken place.

However, the Act cannot provide for the human element of boards and management and in this respect there is a need for strong, ethical individuals, a culture and adherence to the application of internal corporate governance and full disclosure of all monetary transactions.

If you are a board member or involved in a charitable organisation and feel it could benefit from an independent review of its operations/financial reporting contact us on 021 4641400 or email info@quintas.ie

Blog post by Patrick Kearney, Partner, Quintas.

Is the new personal insolvency legislation working?

After a slow start we are starting to see some progress with the new insolvency arrangements (DRN/DSA & PIA) and also with the changes to the bankruptcy legislation.

The Insolvency Service of Ireland (ISI) recently issued their 1^st quarterly report which showed mixed results. Since the ISI began accepting applications for the new personal insolvency arrangements 7 months ago, there have only been 55 schemes of arrangement approved by creditors (DRN 44/DSA 7/PIA 4).

Although the Debt Settlement Arrangement (DSA) scheme is working, only 7 have been approved and the average write down was 77%.The DSA scheme is for those debtors with unsecured debts of more than € 20,000 in total.

The scheme that is under the microscope is the Personal Insolvency Arrangements (PIA) which deals with the write down of secured (mortgages etc.) and unsecured debts. To date there have only been 4 PIA arrangements approved and the average write down was 19%.

To date, the Courts have issued 70 protective certificates to debtors. A protective certificate protects a debtor and their assets from their creditors, while the Personal Insolvency Practitioner (PIP) formulates a proposal for a DSA or a PIA. A protective certificate remains in force for 70 days, but may be extended in certain circumstances.

A PIPs role is to act as a referee/mediator between the parties and a PIP is committed to ensuring that where possible they will assist those with unsustainable debt return to solvency over a period of 5 to 6 years. There are currently circa. 130 individuals licensed to act as PIPs in the Republic of Ireland.

Since the ISI went live on the 9^th September 2013 there has been over 500 new applications for a scheme of arrangement (DRN 82/DSA 121/PIA 320), representing almost 600 individual debtors, with 50 new applications being made to the ISI on a weekly basis so this seems to be progressing well.

New Protocol being developed

The ISI have recently set up a working group to develop a protocol between debtors, creditors and practitioners to streamline the process for DSA and PIA arrangements. This working group is initially dealing with the DSA protocol which will probably bring this scheme in line with the comparable IVA scheme in the UK. The introduction of protocols for DSA’s & PIA’s should assist in increasing the number of applications being approved by creditors.

What happens in Bankruptcy?

The position in bankruptcy is that once a debtor is adjudicated as a bankrupt all debts are written off but unfortunately the debtor loses all of their assets including their share of the family home.

In December 2013 the term for bankruptcy was reduced from 12 years to 3 years. As part of the bankruptcy proceedings the Official Assignee can apply for a payments order which could result in the bankrupt individual having to make a contribution to their creditors on a monthly basis for 5 years. In my opinion this period should be brought in line with the bankruptcy term and reduced from 5 to 3 years.

As part of the recent ISI report they noted that there were 66 bankruptcy cases to the 31^st March 2014. This was in excess of the number of bankruptcies which took place on an annual basis in either of 2011 (33), 2012 (35) and 2013 (58). The total debt involved in bankruptcy adjudications in the first quarter of this year was almost €136 million.

ISI Quarterly Statistics Reports & Transparency

One of the main positives to the above statistics from the ISI is the level of transparency on the new legislation and the fact that the data is in the public domain. The ISI will be reporting on a quarterly basis so we will all get to see what is happening in this space and the progress that is being made. The feeling on the ground is that the number of applications to the ISI has increased significantly in the last number of months and the process is beginning to speed up as all the various stakeholders get more familiar with the systems and the legislation.

Creditor’s responsibility to their Shareholders

It mustn’t be forgotten that the leaders within the major financial institutions have a responsibility to their shareholders to ensure that they get the best return on the loans that they have and which they will provide in the future. In the majority of cases a personal insolvency arrangement (DSA or PIA) will give a better return to the creditor than forcing a debtor into bankruptcy, as in most bankruptcy cases the creditors will get nothing.

As part of a DSA/PIA proposal a PIP will provide the creditors with a comparison of the return they will make compared to under the bankruptcy process. In all cases the new personal insolvency legislation is a better alternative to bankruptcy for both parties.

What does the future hold for the new insolvency legislation?

The experience in the UK which has similar insolvency legislation is that it will take some time for the system to be fully functional. It will take all stakeholders in the process to act in good faith for the system to work. This involves all parties to the agreements Debtors-Creditors-Courts-ISI working together.

The 2^nd quarterly report by the ISI which should be published in early July 2014 will make interesting reading and I would expect a fast response from government if the DSA/PIA scheme has not improved the number of cases being approved.

Unfortunately the start of the process hasn’t been as smooth as we would have liked but there are now 55 individuals who have started on the road to solvency. There maybe a few bumps on the road over the next 5/6 years for these individuals but at last there is a chink of light at the end of the tunnel.

Regards

Mark Ryan CPA

Personal Insolvency Practitioner (PIP)

Sources of Enterprise Funding Available for Businesses turned down by Banks

Do you need help bridging a financial gap for your business, but the bank has turned you down? Don’t be disheartened; there are other sources of funding that might be able to help.

Quintas partner Yvonne Barry helps small to medium enterprises (SMEs) find funding when banks have said no. She’s a non-executive director of Microfinance Ireland, and also the Chairperson of Cork Foundation.

Microfinance Ireland (MFI) is a not-for-profit lender; established to deliver the Government’s Microenterprise Loan Fund. The fund forms part of a suite of financial schemes provided through the Department of Jobs, Enterprise and Innovation to help businesses across all industry sectors.

“Many people have start-up or growing enterprises that may be commercially viable and need a loan, but don’t meet the conventional criteria required by banks”, explains Yvonne. “MFI has a much higher risk appetite; and are not profit oriented so the parameters are different. Helping create or sustain jobs is at the heart of what we do.”

Launched a year ago, MFI provide loans up to €25k for business of fewer than 10 employees; with an interest rate of 8.8% to be repaid over 3 – 5 years.

You’ll still have to show evidence of cash flow; turnover and a solid business plan, you can apply directly or via your local enterprise board who will help you with the application process.

The Cork Foundation can also help by providing access to funds for investment in Cork enterprise.

With some impressively experienced strategic advisors on the board, the Foundation works on finding funding solutions outside existing models. A unique aspect of the Cork Foundation is that it is self-funded through contributions from the Cork/Irish Diaspora, Cork based businesses and philanthropists. We aim to connect contributors directly to private and community enterprises in Cork City and County.

“Applying for a loan is an arduous and daunting prospect; and being turned down is very dispiriting”, says Yvonne. “We’d like to see more people realise that there is funding out there”, says Yvonne, “Nobody is going to drop it into your lap; as with most things worth fighting for, it’ll take an extra bit of drive to get it over the line!”

An entrepreneurial spirit; a passion for your business and the commitment to make it work are what success stories are made of.

For further information call Yvonne Barry at Quintas on 021 464 1400

www.quintas.ie

www.microfinanceireland.ie

www.corkfoundation.com

Article as recently featured in the Cork News.

Business Protection – What you need to know

Like everyone you need to protect yourself and your family against the financial impact of serious illness or death. However, as a business owner your protection needs are different. Your business will provide some financial security, however you probably are not entitled to employee benefits. In addition, the future earnings of the business is dependant on others.

As a business owner you need to consider what would happen to your share of the business if you died prematurely and the financial impact that could have on your family. You also need to consider what would happen to the business if a co-owner died prematurely.

What would happen to your family if you died prematurely?
• Would they take over your share of the business?
• Would the remaining shareholders have the funds needed to buy your share back from your family?
• Has this plan been formalised?

What would happen to your business if a co-owner died prematurely?
• Would you maintain control of the business?
• Do you have the funds to buy back their share of the business from their family?
• Has this plan been formalised?

A Business Protection Life Policy gives you real peace of mind

Your plan can be used to:
• Provide the funds needed to buy out a partner’s share of the business.
• Ensure your family gets a fair price.
• Ensure a business partner retains ownership and control.
• Avoid the need for personal loans to be taken out.
• Provide a formal plan of what should happen.

There are a number of Business Protection policies that can be availed of, depending on the type of Business structure that is in place and the type of cover that is required:

1. Keyperson Insurance

• What is Keyperson insurance designed for?   It compensates a company when a key employee dies or becomes seriously ill.

• Why take out Keyperson insurance?  It helps minimise the financial impact of losing key employees

Keyperson insurance benefits:

• If the employee dies a cash sum is paid to help maintain the business
• Can help minimise interruption to business activity
• Can help with bank loans where the key employee gave a personal guarantee
• Can help pay off loans made to the company by the key employee
• Can help provide resources to find a suitable replacement

2. Co-Director Insurance

• What is Co-Director insurance for?  Co-Director Insurance makes funds available to buy a director’s shares from their successor when the director dies.

• Who takes out Co-Director insurance?  The directors themselves

• Why take Co-Director insurance out?  Surviving directors can lose control if a deceased director owned over 50% of the company.

The deceased successor:

• may be unfamiliar with the business;
• could have cash flow problems after losing the deceased’s income.

Co-Director insurance benefits:

• Gives company directors peace of mind
• Means the deceased’s successor does not have to become involved in the business
• Can also cover a directors becoming seriously ill

3. Partnership Insurance

• What is partnership insurance for?  It protects the financial security of a business partnership by compensating a deceased partner’s estate for their share of the partnership.

Partnership insurance benefits:

• Gives surviving partners the funds to repay the deceased partner’s estate
• Means the deceased’s successor does not have to become involved in the business
• Can also cover a business partner becoming seriously ill

You can’t predict the future but you can plan for it

While we all hope and often believe it won’t happen to us, the reality is that business owners and their families throughout Ireland are affected by these events each year.

If you would like to find out more contact Quintas Wealth Management on 021 4641400 or email info@qwm.ie