MRS K from Dublin 6 raises a popular question: How much inheritance tax has to be paid by dependent children, and what is the best method of dividing assets to the greatest advantage of all? She also wants to know if a member of the family living abroad can be named as executor.

There are no domicile restrictions when in comes to naming an executor, but you really do need to consider whether it would be convenient for someone living in US or Australia or even, say, in Germany to fulfil their duties as executor. Mrs K should discuss this with close family members or the family solicitor, who can act as executor for a relatively modest fee.

As for the best way - tax wise - to divide assets the table below shows exactly how much Mrs K can leave her various relations - children, grandchildren, nieces, nephews, etc., before they have to pay tax on the inheritance.

People with large estates may want to consider something called a Section 60 Inheritance Tax policy in order to reduce the potentially high CAT bill their dependents may face on their death. These policies are nothing more than whole of life insurance policies, the benefits of which the Revenue Commissioners allow to be used to pay CAT liabilities. They are not added to the deceased person's estate for the purpose of calculating either CAT or Probate obligations. The cost of these policies depends very much on the amount being insured and the age of the policyholder(s), but most independent financial advisers tend to recommend that their clients take out true, guaranteed policies, rather than the lower cost ones where the cost of contributions do not properly reflect the increasing age and health risks of the client. Such policies have the unpleasant habit of `bombing out' - i.e. becoming worthless, within as little as 20 years of purchase.