# Executor Paying Nursing Home (Fair Deals Scheme)



## Conny888 (26 Sep 2016)

Hi,

I was made executor of my late mothers estate which has been valued at just over 380k. 310K for the house and 70k that she had in savings (residue). In her will she left the house to me while the residue of 70k was intestate.

The probate has been administered and there were no objections to the will, now I am in the process of paying out any debts and liabilities  owed along with equal shares to each of my siblings. My mom passed away in a nursing home where she was for 2 years. This was subsidized with a loan courtesy of the fair deal scheme.

I was under the firm impression that her nursing home bill would be paid out of the residue of the estate (70k) but my solicitor has informed me that the property is now my responsibility and cannot be paid out of the residue of the estate as this was not provided for in my mothers will.

I have applied for an exemption on Capital Acquistion Tax which will take 5 years..what happens if I delay paying the Nursing Home loan until then? But first and foremost why can't I pay it out out of the residue as it was her savings surely any debts and liabilities should come out of that first?

Any advice and information would be most appreciated.

Conny.


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## cremeegg (26 Sep 2016)

The fair deal is a loan secured against property. Effectively its like a mortgage, and the money is owed to Revenue.


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## Conny888 (26 Sep 2016)

Thanks cremeegg for your swift reply 

So does that means it can *only come out of the sale of the property*  not the residue? 

BTW - the Nursing Home bill came to just a little over 30 k - will there be significant interest on that each year it is not paid?


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## elcato (26 Sep 2016)

You have one year to pay off the loan otherwise they will add interest from the day iof your mother's death unfortunately. The loan was added as a charge or security to the property so yes it will come out of the sale when that happens but if you leave it a long time the interest will accrue.


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## Conny888 (26 Sep 2016)

elcato said:


> You have one year to pay off the loan otherwise they will add interest from the day iof your mother's death unfortunately. The loan was added as a charge or security to the property so yes it will come out of the sale when that happens but if you leave it a long time the interest will accrue.



Thank you elcato.

Would you have any idea how much I would have to pay with interest in say 5 years time? 

I have applied for CAT exemption will that be worth it if I end up paying interest on the loan anyway?


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## elcato (27 Sep 2016)

I looked into it and the only thing I got was that the interest is based on inflation and a % of it but no definitive figure. I was curious as we were looking like having to pay a penalty but due to change of circumstances it looks like we won't have to pay. I can let you know later if I hear but I don't get the impression that it is as punitive as revenue interest* even though it's them who administer the deal from here on.

*Disclaimer: Purely speculation on my part based on some research.


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## Conny888 (27 Sep 2016)

Thanks elcato for looking into this. I suppose the best thing to do is perhaps talk to an accountant. My main worry about this is that I do not want to end up paying triple the amount and that my CAT exemption would end up being meaningless.


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## elcato (27 Sep 2016)

Well my first port of call would be the HSE person who OK'd the fair deal scheme if I was you. It's only tow years so there's a good chance they still are working there.


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## Claire7771 (27 Sep 2016)

Ecato,

You read my mind. I got in touch with the HSE's fsir deal section and received a very detailed reply. Thanks again for all of your help, fantastic site.

I will contribute from my experience if a similar thread pops up in the future.


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## elcato (27 Sep 2016)

Any chance you could share the answer to your question here for future reference so ? What is the interest rate charged once the first year anniversary is up ?


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## Conny888 (27 Sep 2016)

elcato said:


> Any chance you could share the answer to your question here for future reference so ? What is the interest rate charged once the first year anniversary is up ?



This was my her answer elcato:

How much interest will he accrued on the loan each year its not paid?

*As advised there is a deferral in place in relation to these monies, so at present there is no interest accruing at this time. However should you need sell the property or should your circumstances have changed from when the deferral was first granted to you, you are obliged to notify this office of the change and we will then issue you with the revised and updated amount repayable to the Revenue Commissioners.*


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## elcato (29 Sep 2016)

OK thanks. We are talking about two different things so. I was not aware that your loan was deferred. I was referring to the actual amount outstanding to revenue for monies paid under the Part V loan. I'm guessing though that you requested a deferral on it and they accepted.


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