Question on Fair deal and Will

Hi i know a bit about supposed fair deal.... When you apply for it... They will take 7.5% of assets annually for 3 years based on valuations when applied for scheme.

Better off distribution cash beforehand and have as little as possible in own name at time of application.

Cash can be distributed but all property will be taken into account that were owned within last 5 years. So unless you're 5 years away from nursing home you're gonna have to pay 7.5% property.

Pm me directly if need more advice.

I don't know for certain, but I always assumed that the 7.5% was applied to the estate, not calculated incrementally as you appear to be doing.

Hi,

The Fair Deal does not seem to be designed for people who worked hard, saved hard, payed tax all their working lives and now need a bit of support in their twilight years. If you have any form of savings - you are expected to pay a substantial part of your own care. If you never saved a bean, the state will pick up the tab.

Probably, the most important aspect with the scheme is:

Transferred assets

The assessment will look at assets that you have transferred (for example any land, money or property you have given to another person) since applying for State support or in the 5 years before the application.

In other words, have the conversation with the family and transfer all assets today and hopefully you will be in a position in five years time that if your mother requires support, her assessment will show that she has minimal assets in her name.

The 'Gift Tax' method can be used to distribute to for example, grandchildren, on an annual basis. 10 grandchildren x $3000 annually over three years - $90,000.

Gifts you receive up to the value of €3,000 from any person in a calendar year are exempt from Capital Acquisitions Tax (CAT). This means that you may take a gift from several people:

• in the same calendar year
• and
• the first €3,000 from each disponer is exempt from CAT.  

Gifts of €3,000, as outlined above, are not taken into account in computing tax and are not included for aggregation purposes. 

This small gift exemption applies only to gifts and not to inheritances.

Get advice from an accountant and solicitor on the above.

She would rather give 10’s of thousands to the state than give it to her family now? Strange outlook.

As I said above, as far as I am aware, the 7.5% is assessed in terms of her estate. If she has an asset worth 100k today, the FD scheme will be taking 7.5% of that asset when she dies as a contribution towards for this year of care. If she lives 20 years and the asset inflates to 1m in that time, they will take the 7.5% of the 1 million for this year, not what it was worth 20 years back. They are basically taking a 7.5% share which they realise later. I am open to correction but that is my assumption!

'After 5 years have passed from transfer they are out of scope' @893bet

- I haven't read up on any of this FD, but had the impression that it was 10 years, when did the 5 years come in.

You're right, I've had a quick look at Karen Walsh's book - Farming & the Law, pg 76-78.

Its important to know all this information, particularly when it comes to transferring assets to the next generation. The less the person who needs the care has in their name the better. I know it's not a subject people like talking about but succession plans are vital.

I'm in a similar situation myself, have the farm in my name but not the full five years that required. So now am bound by debt and the farm is suffering as a result. If I was in the know about the scheme id gave sorted the transfer years earlier. Now it's going to cost me 10s of thousands.

There are stories like this all over the country, new perspective farmers need to be made more aware of these issues.

I cannot answer your question cause I don't know. Our close neighbour and friend (a batchelor farmer) was admitted to a nursing home last year. He had about €400k in savings with various banks, credit union, An Post bonds ect. His brother told us that he was not eligible for the FD scheme due to his cash savings let alone the value of his house, yard and land. At present his nursing home expenses are been deducted from his cash savings at over €1,200/week.

This is my only experience of the FD scheme and it opened my eyes on why pre planning is so important.

Those payments through the fair deal scheme won't go beyond the three year cap. The amount agreed will be part of a contract and will not change for those three years, barring the nursing home itself increasing their prices. Your mother will probably have to pay full whack (minus a possible nursing home loan) to cover three years.

As far as I'm aware, three years worth is all they can take, then the client will qualify for the cheap rate with will be pretty much covered by pension. The reason it's three years is because that is the average length of stay.

Id still echo what all are telling you here though, talk to a solicitor, I believe Teagasc have a person dedicated to these kind of enquiries as well. Professional legal advice is vital here, Afterall it's a lot of money.

https://fairdealadvice.ie/

Is advice but you will have to pay for a consultation.

This would be better if the person was well enough, plus tax relief

https://www.alhomecare.ie/prices?gad_source=1&gclid=CjwKCAjwydSzBhBOEiwAj0XN4BlX8A5mT2Qf01RDyb6N2AejnF2C-HwRVrmx77LdJC0af0v6EBnLPRoCDTMQAvD_BwE

in effect it would be treated same as a gift, plan ahead or get fucked, but to do that there needs to be trust between parent and child ( or what ever relationship between the parties).

Biggest problem now is the so called marriages and the childs partner, Your 'gift' could end up with someone you've nothing to do with.

You'd wonder do young people know anything about commitment.

Because It's easier for the state to deal with no fault divorces, and less court time wasted.

In fairness if there is a breakdown in a marriage the most important thing is the children are catered for, not that part of the land is not sold. I have never come across a situation where a working farm (or business) was badly damaged by a family law court order. Yes, 20/30 acres had to go at times where the spouse needed help to put a roof over her head, but equally she may have contributed 10+ years to raising children and lost out on earnings during that time.

too many young lads still stay living at home with mammy for fear of the land being taken, and it’s mostly sh1te from the older generation.

I say this as a managing partner of a law firm/farmer/married person.

Ps, legal fees aren’t a patch on what you say unless things go mental altogether.

€20k buys you a tractor gearbox these days.

There is very much an endpoint in family law proceedings. You can’t really keep fighting, and the legal aid board don’t tend to go all in for incessant appeals.

Being the devil's advocate,

Your aunt has paid significant tax and excise duties on her drink and cigs.

The problem was people were put in care homes years ago after giving significant wealth to younger generations or neighbours, these care homes were put in place for people with no means originally.

Then some twit sued because monies were taken from pensions without proper paper work being done.

So the pendulum has swung more in the other direction and in fairness why should society pay for looking after a person with significant wealth. If I had an aunt with autism, I wouldn't begrudge her care, some people with drink problems can't shake the disease and it's hard fault them for it.