# Inheritance from parents whilst on state welfare, is income affected?



## BrokeBroker (6 Dec 2022)

Basically I had to go on disability a number of years ago for an unforeseen condition.

I'm am forced to consider the possibility I may have to remain on disability indefinitely, though remain hopeful that won't be the case.

However my parents are older now and have began to discuss inherence.

I haven't been in a position to accumulate savings. I like week to week on Irish state disability allowance and avail of housing assistance payments.
So the state takes care of all my bills. Which is wonderful of course as I'm mostly incapacitated most/all of the time and have no means to provide for myself.

I understand that if I were to inherit a part of my parents property valued at over 50 thousand, it would impact my weekly allowance.
As the inherence increases, allowance decreases.

What this means is that I would basically have to slowly burn through any inheritance until my own personal net worth is low enough to receive state benefits again.

Is this correct?

My goal was, in the event of making a recovery (and progress has been made so I'm sincerely hoping that will continue and I will rejoin functioning society), that I would have enough to return to university and establish a career.

Or just have enough money to get myself off the ground from a place of having no savings or no assets or sense of personal financial security.

Is there any way to manage this situation? That if I inherit a property that I can actually use it further my life position, instead of it simply replacing state benefits I am currently receiving to survive?


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## ClubMan (6 Dec 2022)

Disability allowance is means tested, yes.





						Disability Allowance
					

A weekly payment to people that have an injury, illness or disability which is expected to last more than a year. Find out how to qualify and rates of payment.




					www.citizensinformation.ie


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## Brendan Burgess (6 Dec 2022)

Your home is excluded from the means test. 

So, if your parents left you a property in which you lived, your Disability Allowance or Invalidity Pension would not be affected.

Or if they left you money and you bought a house, they wouldn't be affected either. 

But if you have cash, it would be means tested.

Brendan


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## Brendan Burgess (6 Dec 2022)

This is how I think it works. But I am not sure of the intricacies. 



Say, they leave you €100,000

€50,000 = no reduction
€10,000 = €10 per week reduction
€10,000 = €20 per week reduction
€30,000 = €120 per week reduction
Total reduction: €150 per week

So, if you are getting the €208 per week before the means test, it will be reduced to €58 per week.

If you have €114,500 , the additional €14,500 will result in a further reduction of €58 per week, so you will get nothing.

Brendan


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## NoRegretsCoyote (6 Dec 2022)

If your parents bequeath you a house that won't impact your allowances but you may get a CAT bill if the house is worth over €335k that you probably won't have the cash to pay.


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## BrokeBroker (6 Dec 2022)

So I would have to liquidate the inheritance, live off that until it's down to nothing, then re-apply for disability, if I were to be disabled indefinitely?


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## Groucho (6 Dec 2022)

If they leave you €150,000 in cash you'll lose your full disability allowance, and your HAP will be affected too.

Whereas, ironically, if they bought a small apartment or house (or camper van or yacht!) for you to live in and left it to you, as well as leaving you €50,000 in cash, your means wouldn't be affected at all for the DA payment!


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## NoRegretsCoyote (6 Dec 2022)

BrokeBroker said:


> So I would have to liquidate the inheritance, live off that until it's down to nothing, then re-apply for disability, if I were to be disabled indefinitely?


In this circumstances it makes sense to put all of your wealth into the house you live in, even trading up if need be. You could also opt to buy a new car that would serve your needs for 10+ years.


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## Groucho (6 Dec 2022)

BrokeBroker said:


> So I would have to liquidate the inheritance, *live off that until it's down to nothing*, then re-apply for disability, if I were to be disabled indefinitely?



Live off it until it's down to €113,900, at which point your eligibility for DA will recommence - but only at the lowest level (currently €3 p/w).


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## BrokeBroker (6 Dec 2022)

NoRegretsCoyote said:


> In this circumstances it makes sense to *put all of your wealth into the house you live in*, even trading up if need be. You could also opt to buy a new car that would serve your needs for 10+ years.



Meaning, making upgrades until there's no appreciable means remaining to effect DA?

It seems my option is primarily, spend everything to the point it won't effect state payments.

I have two siblings. Perhaps if my parents willed everything to them, i.e. they kind of, "hold my share for me" so the inheritance is not in my name, that would preclude reduction/cessation of DA/HAP?

If the latter were the case, I'm sure there's some other issues there like the money would come under additional inheritance tax?


Just to be clear, I'm not trying to score additional payments, I just want security for my future so I'll have the means to provide for myself day to day, whilst having the option to invest in some kind of a future such as education.


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## BrokeBroker (6 Dec 2022)

Groucho said:


> If they leave you €150,000 in cash you'll lose your full disability allowance, and your HAP will be affected too.
> 
> Whereas, ironically, if they bought a camper van costing €100,000 and left it to you, as well as leaving you €50,000 in cash, your means wouldn't be affected at all for the DA payment - and, unless a camper van is regarded as accommodation, - neither would your HAP!



As I understand, whether the inheritance was cash or non-liquid, the state regards it as the same.

So even if I were left an entire property worth 150 thousand, in the eyes of the state that's 150 thousand in cash = DA payment cessation.

And I would no longer be eligible for HAP payments having a property in my name.


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## NoRegretsCoyote (6 Dec 2022)

BrokeBroker said:


> I have two siblings. Perhaps if my parents willed everything to them, i.e. they kind of, "hold my share for me" so the inheritance is not in my name, that would preclude reduction/cessation of DA/HAP?


Don't go near this option. There are all sorts of tax and trust issues involved.



BrokeBroker said:


> So even if I were left an entire property worth 150 thousand, in the eyes of the state that's 150 thousand in cash = DA payment cessation.


Not at all. You can own and live in a palace and it is disregarded for DA purposes.  Financial and non-financial wealth are treated very differently for means testing purposes.



BrokeBroker said:


> And I would no longer be eligible for HAP payments having a property in my name.



Not necessarily. It would need to be in your sole name and suitable for habitation.


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## Brendan Burgess (6 Dec 2022)

BrokeBroker said:


> even if I were left an entire property worth 150 thousand, in the eyes of the state that's 150 thousand in cash



Just to be clear about this in case you are not so clear.

If your parents leave you a house and you live in it as your home, it is disregarded completely for means test purposes.

So if your parents have an investment property worth €150k and a home worth €300k, they should leave you the investment property and, if you live in it as your home, you will continue to get the full Disability Allowance.

If they leave you a property and you rent it out, then it will affect your means test.

Brendan


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## peggy14 (6 Dec 2022)

BrokeBroker said:


> Meaning, making upgrades until there's no appreciable means remaining to effect DA?
> 
> It seems my option is primarily, spend everything to the point it won't effect state payments.
> 
> ...


Your parents could set up a trust which would come into effect on their demise.
This will not affect your entitlements and your siblings could be the trustees. 
Its also very tax efficient where the individual is deemed to be 'unable to living financially dependently from their own income'.
Book of parental wishes can be included in the trust.  
Care needed as its not just DA that would be effected e.g. means for medical card far lower, travel pass, hardship scheme, fuel, rent allowances.
There are excellent free live webinars out there presented by very genuine individuals not sure if I can recommend one on this site ?  
They also offer one on one session for c 100e but one would prob get more in return as not everyone is aware of their full entitlements.


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## NoRegretsCoyote (6 Dec 2022)

Parents could also set up a "Section 72" life insurance policy. This would basically pay your inheritance tax bill for you. It's not cheap but might solve your problem.


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## Pinoy adventure (6 Dec 2022)

A trust fund would be ideal.


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## dubdub123 (6 Dec 2022)

This is a very interesting topic and Im looking at this from a parental viewpoint myself. I did have an initial consult on the area of creating my will with this in mind, and I need to pick this back up again as priority but "will trust" seems to be good option with the trust being set up after I pass away. I think called discretionary trust. I need to arrange executors, trustees also.

OP, i think its a very smart move to look into this now and prepare ahead. I would hope to leave my own son in a good position and not affecting his entitlements.

Would appreciate if you can post updates as you gather more info. Thank you


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## BrokeBroker (6 Dec 2022)

peggy14 said:


> Your parents could set up a trust which would come into effect on their demise.
> This will not affect your entitlements and your siblings could be the trustees.
> Its also very tax efficient where the individual is deemed to be 'unable to living financially dependently from their own income'.
> Book of parental wishes can be included in the trust.
> ...



A trust, I'm curious how that would manage something like a house/property?

It's far more probable that one of my siblings would end up living in my parents house, or that it would be sold.

I certainly wouldn't end up living there.

So one of the above being the case, how would a trust basically negotiate that such that it doesn't affect my current setup - which as above does include a travel pass, medical card, fuel/rent allowance, etc.

Perhaps there's a _trust institution_ of sorts I could discuss this with? 

Having been mentioned twice, it seems to be a potentially viable possibility.


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## ClubMan (6 Dec 2022)

BrokeBroker said:


> So one of the above being the case, how would a trust basically negotiate that such that it doesn't affect my current setup - which as above does include a travel pass, medical card, fuel/rent allowance, etc.


Have you considered the possibility of receiving a generous inheritance and paying your own way for a bit?


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## BrokeBroker (6 Dec 2022)

NoRegretsCoyote said:


> Parents could also set up a "Section 72" life insurance policy. This would basically pay your inheritance tax bill for you. It's not cheap but might solve your problem.



I will look into this but, curious how it would effect means testing for disability allowance?

It pays off the inheritance tax.

How would I possibly be in a position to pay this off myself?

I live week to week on the DA income. 33% on a property? 

Would the state really expect me to acquire this money somehow?

How is that realistic?

Sell my share in the property and use it to pay the inheritance tax? 

Then still have the remaining liquid amount of the inheritance, have my weekly income reduced/cut-off until I burn through that and am back to square-one?


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## peggy14 (7 Dec 2022)

BrokeBroker said:


> A trust, I'm curious how that would manage something like a house/property?
> 
> It's far more probable that one of my siblings would end up living in my parents house, or that it would be sold.
> 
> ...


Property / Cash etc can all be left and managed by the Discretionary Trust.
Your parents choice of Trustees is very important as you will essentially be requesting funds from Trustees as you need it.
Your parents 'Book of Wishes' on how the Trust is managed would be helpful to the Trustees and you could talk to them about this.
A book of wishes could stipulate e.g. any amount should be spent on education and also may no funds gambling / drugs etc !! 
In the event that Trust is not needed it just does not come into play and your inheritance is given directly to you.
If you parents stipulate say sibling 1 is to inherit the house valued x and then cash in the equivalent for siblings 2 & 3 (1/3 each way).
Obviously sibling 1 may need to buy out a portion of Sibling 2 & 3 depending on the value of the property.
Your parents need to seek independent advises, as e.g. leaving you lifetime interest or something along those lines is an absolute NO.
'pay your own way' it is usually a sibling or indeed sibling spouses come up with that one so care re trustees is needed. 
The DA etc. are your 'entitlements' people who do not live or care for someone with either temporary or permanent disabilities do not understand. 
At present by daughter is on DA, she saves some in my name and this AC is stipulated to go directly to her trust (if trust needed).
My Pension Co are aware of this trust as are Life Insurance Companies.
The existence of the Trust has given both of us a huge piece of mind. 
Like you she is finally back in education (after 4 years at home) this setting would not have been available had she not been in receipt of DA. 
I work full time so that I can provide for her now and hopefully help her in purchase of suitable accommodation in due course.
Also paying CAT would only arise if inheritance is over the threshold so is not always a factor. 
I can recommend a business that advises on trusts, your parents still need a solicitor but they give really good information just send me a PM. 
It is run by Accountant (disability in family) a Carer and an individual living with a permanent disability so hugely knowledgeable and empathic.


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## Brendan Burgess (7 Dec 2022)

Unless you are talking about very large sums of money, I think you should avoid the hassles of a trust. 

The simpler solution seems to be to take a cash inheritance and then buy a house with it.

Brendan


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## BrokeBroker (7 Dec 2022)

Brendan Burgess said:


> Unless you are talking about very large sums of money, I think you should avoid the hassles of a trust.
> 
> The simpler solution seems to be to take a cash inheritance and then buy a house with it.
> 
> Brendan



How large would "very large" be?

I'd still be subject to 33% inheritance tax right?


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## Brendan Burgess (7 Dec 2022)

BrokeBroker said:


> I'd still be subject to 33% inheritance tax right?



You can inherit or receive a gift from your parents up to €335k tax-free.  So you could buy a house with that. 

If you inherit €435k, you will pay €33k tax, so you still get €402k net. 

Brendan


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## BrokeBroker (7 Dec 2022)

peggy14 said:


> Your parents need to seek independent advises, as e.g. leaving you lifetime interest or something along those lines is an absolute NO.
> 'pay your own way' it is usually a sibling or indeed sibling spouses come up with that one so care re trustees is needed.



I'm not clear on this.

"Pay your own way" meaning, you have a sizeable fund at your discretion now, use it to pay bills day to day like anyone else, temporarily ceasing DA income?

Have I interpreted this correctly?


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## jpd (7 Dec 2022)

Indeed


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## BrokeBroker (7 Dec 2022)

In relation to the idea of a "trust":

Full disclosure.

A 1 bed premises was purchased with the intention to bequeath it to myself in the event I don't find long term illness resolution.

That is to say, a family member took a precaution to ensure I don't become homeless.

Therefore, inheritance will comprise of that additionally.

Therefore that premises would likely (worst case scenario and I'm still on DA) become my primary residence.

As I understand, this alone would not effect DA income. Naturally I would no longer be availing of HAP in that instance. But additional assert inheritance such as a part of the original family home would be viewed by the state as cash-on-hand and would impact weekly payment and presumably other allowances as previous.

So the idea of of using that money to buy a house wouldn't really be all that possible, as I'd already have a residence.

Therefore, I need to look into this idea of a "trust" a little more? 

Sound about right?

Indicators as to where I should inquire?


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## Brendan Burgess (7 Dec 2022)

Sorry

It sounds as if you will be well off enough not to rely on the rest of us to pay your way? 

The social welfare system is supposed to be a safety net, not a prop. 

Brendan


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## NoRegretsCoyote (7 Dec 2022)

BrokeBroker said:


> So the idea of of using that money to buy a house wouldn't really be all that possible, as I'd already have a residence.


Then you don't need to worry about a trust at all.

Your parents would need to bequeath you the property. If its value is under €335k you won't have a CAT liability. You own the house and live in it.


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## ClubMan (7 Dec 2022)

Brendan Burgess said:


> Sorry
> 
> It sounds as if you will be well off enough not to rely on the rest of us to pay your way?
> 
> ...


The very point that I made here earlier.


ClubMan said:


> Have you considered the possibility of receiving a generous inheritance and paying your own way for a bit?


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## peggy14 (7 Dec 2022)

BrokeBroker said:


> In relation to the idea of a "trust":
> 
> Full disclosure.
> 
> ...


Google Financial Wellbeing.ie 
FW deal only with clients where there is a disability in a family (extended family).
FW understand the importance of and vital need for peace of mind for all family members.
FW also ensure that future financial planning will ensure and that entitlements are not lost.   
You are clearly doing your utmost to improve your position and from getting this matter resolved will assist you recovery.
If you lose DA and are still entitled to it you could very well end up costing the state for more than the measly DA.
There are people who take total advantage of DA and other state benefits but you are clearly you are not one of these people.
The state could easily reduce this burden on state financials by removing those false claimers (e.g. paying a pension to a man dead 40 years !!).
Also you mention a family member bequeathing a home... this may result in CAT but would not if went through The Trust route. 
And just to be clear a discretionary trust is not for tax avoidance a medical certification etc will be required if trust is enacted on a death. 
I know there was mention of easier routes but unfortunately when living with a disability the easy route is that what the state wants you to take and unfortunately can have serious long term negatives for you and your extended. 
Hopefully you may never need this Trust but its will bring you and your loving family peace of mind that it is there if needed. 
Its actually not that complex but FW provide fabs booklets for all, trustees, guardians etc but you may need to read them many times. 
All the best on your journey.


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## dubdub123 (7 Dec 2022)

peggy14 said:


> Google Financial Wellbeing.ie
> FW deal only with clients where there is a disability in a family (extended family).
> FW understand the importance of and vital need for peace of mind for all family members.
> FW also ensure that future financial planning will ensure and that entitlements are not lost.
> ...


You have provided extremely good advice. The ballpark is completely different when dealing with a disability. Its extremely difficult to be awarded DA and requires evidence of disability. I found it gruelling applying on behalf of my son. He has a lifelong neurological condition and he is always going to experience challenges and its doubtful that he will ever be in a position to be financially independent and support himself. I look at his younger sister and see all the options wide open to her partly because her skills suit the world better. 
Trusts are there for exactly these type of situations. Being in receipt of DA can allow access to services, free travel, medical card etc. However, its means tested and a vulnerable person dealing with the loss of parents may be suddenly thrown into a very stressful situation. Along with physical disabilities many may need access to mental health services. As they are pretty much non existent it is prudent to have a lump sum to pay privately. 
If you have any further info on this area of financial/,estate planning for these circumstances please share. There is a lack of readily available information.


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## peggy14 (7 Dec 2022)

dubdub123 said:


> You have provided extremely good advice. The ballpark is completely different when dealing with a disability. Its extremely difficult to be awarded DA and requires evidence of disability. I found it gruelling applying on behalf of my son. He has a lifelong neurological condition and he is always going to experience challenges and its doubtful that he will ever be in a position to be financially independent and support himself. I look at his younger sister and see all the options wide open to her partly because her skills suit the world better.
> Trusts are there for exactly these type of situations. Being in receipt of DA can allow access to services, free travel, medical card etc. However, its means tested and a vulnerable person dealing with the loss of parents may be suddenly thrown into a very stressful situation. Along with physical disabilities many may need access to mental health services. As they are pretty much non existent it is prudent to have a lump sum to pay privately.
> If you have any further info on this area of financial/,estate planning for these circumstances please share. There is a lack of readily available information.


Dubdub totally agree with you.
One other nugget I got from FW was to put whole of life policy in place and use childs/young adult entitlements to pay for it.
I was surprised at my age I qualified for same. 
It is will pay out 100k if I die before 65 and 50k no matter when.... premiums over term and far less that either pay out.
I have this in place but young adult is not funding as I have both children with disabilities. 
The reason they suggested young person use entitlement to fund was because of issues with future e.g. son in law in your case. 
As they may lack understanding that your dd will probably have to care at some level and your son receives extra money etc...so sad but true.
Also if the opinions of individuals as evidenced on this thread were more supportive - employers would be more willing to support those with disabilities - its the employers would benefit as much as the potential employees, our children can so think outside the box !!


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## Early Riser (7 Dec 2022)

A discretionary trust is subject to taxation, with an exemption in the case of the beneficiary being permanently incapacitated. Reveneue define this quite severely:

_An incapacitated individual means an individual who is permanently and totally incapacitated, by reason of mental or physical infirmity, from being able to maintain himself or herself.
For the purposes of this provision, “maintain” can generally be regarded as supporting oneself by earning an income from working. In cases where an individual is not capable of earning a living from any kind of work, Revenue will regard such cases as satisfying the “totally incapacitated” requirement.
*The incapacity must also be permanent so that there must be no prospect of the individual recovering or of the condition improving to the extent that the individual would be able to maintain him or herself.*_

This may not be the case here:



BrokeBroker said:


> My goal was, in the event of making a recovery (and progress has been made so I'm sincerely hoping that will continue and I will rejoin functioning society), that I would have enough to return to university and establish a career.


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## BrokeBroker (7 Dec 2022)

ClubMan said:


> The very point that I made here earlier.



I'm aware of these types of sentiments.

I responded to your earlier comment but it was deleted.



peggy14 said:


> Google Financial Wellbeing.ie
> FW deal only with clients where there is a disability in a family (extended family).
> FW understand the importance of and vital need for peace of mind for all family members.
> FW also ensure that future financial planning will ensure and that entitlements are not lost.
> ...



Excellent information and understanding of my position.

I assume FW will have all the relevant information on establishing a trust.

This is the next component of organizing situational security I need to familiarize myself with.



dubdub123 said:


> You have provided extremely good advice. The ballpark is completely different when dealing with a disability. Its extremely difficult to be awarded DA and requires evidence of disability. I found it gruelling applying on behalf of my son. He has a lifelong neurological condition and he is always going to experience challenges and its doubtful that he will ever be in a position to be financially independent and support himself. I look at his younger sister and see all the options wide open to her partly because her skills suit the world better.
> Trusts are there for exactly these type of situations. Being in receipt of DA can allow access to services, free travel, medical card etc. However,* its means tested and a vulnerable person dealing with the loss of parents may be suddenly thrown into a very stressful situation*. Along with physical disabilities many may need access to mental health services. As they are pretty much non existent it is prudent to have a lump sum to pay privately.
> If you have any further info on this area of financial/,estate planning for these circumstances please share. There is a lack of readily available information.



Precisely.

Which is why I'm attempting to get the particulars of this situation organized ahead of time.

I moved apartments about 6 months ago and found it so stressful I developed tinnitus in my right ear..... from moving from one apartment to another.... in the same building!!

lol

When you're incapacitated, the most trivial tasks can seem monumental.

The thought of being thrown into a massive tax bill or losing weekly income is nothing short of daunting.



Early Riser said:


> A discretionary trust is subject to taxation, with an exemption in the case of the beneficiary being permanently incapacitated. Reveneue define this quite severely:
> 
> _An incapacitated individual means an individual who is permanently and totally incapacitated, by reason of mental or physical infirmity, from being able to maintain himself or herself.
> For the purposes of this provision, “maintain” can generally be regarded as supporting oneself by earning an income from working. In cases where an individual is not capable of earning a living from any kind of work, Revenue will regard such cases as satisfying the “totally incapacitated” requirement.
> ...



Every day starts with the thought and hope I'm a little closer to it not being the case.

But in a sense it's like saying I hope we're a little closer to curing Multiple-Sclerosis (not my condition); optimistic but so far all attempts result in a management strategy, not a cure.


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## Early Riser (7 Dec 2022)

BrokeBroker said:


> But in a sense it's like saying I hope we're a little closer to curing Multiple-Sclerosis (not my condition); optimistic but so far all attempts result in a management strategy, not a cure.


 Best of luck with it. But just be aware that the tax exemption for the discretionary trust is not straightforward. The relevant chapter from the Revenue manual is here: https://www.revenue.ie/en/tax-profe...ains-tax-corporation-tax/part-07/07-01-20.pdf


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## DannyBoyD (7 Dec 2022)

Brendan Burgess said:


> Sorry
> 
> It sounds as if you will be well off enough not to rely on the rest of us to pay your way?
> 
> ...


We none of us here have sufficient facts or context or background on the OPs situation to make that judgement.

OP is looking for legitimate information.


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## ClubMan (7 Dec 2022)

peggy14 said:


> contact financial wellbeing its free and just c100e for a one on one.


Per hour?





						Remuneration - children with special needs - Financial Wellbeing
					






					www.financialwellbeing.ie


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## dubdub123 (8 Dec 2022)

Early Riser said:


> Best of luck with it. But just be aware that the tax exemption for the discretionary trust is not straightforward. The relevant chapter from the Revenue manual is here: https://www.revenue.ie/en/tax-profe...ains-tax-corporation-tax/part-07/07-01-20.pdf



So if i were to make a will specifying that I wish to have a discretionary trust set up for my son, following my death, do you know when the medical sign off/evidence must be provided? 
Is it when Im writing my will or (with a bit of luck) years later when there is an attempt to setup a trust.

I find the order and related costs for this whole process confusing. At thd time that the will is being written, it seems that the trust is not setup, however costs are high for this type of will. 

I would be very interested in any further information on the process and criteria.


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## dubdub123 (8 Dec 2022)

ClubMan said:


> Per hour?
> 
> 
> 
> ...



I actually attended one of their free webinars and that was very informative regarding 
- disability allowance
- household benefits scheme
- car tax refunds (very specific criteria)
- special needs bank accounts

They also did cover the area of wills and necessity to have this in place, but I wasnt clear on what service they actually offer on this.
There were some financial products highlighted, but I didnt focus too heavily on that and i dont know how they stack up on the market. These seem to be commission based, but looks like they are also getting commission from consultation fees but I stand to be corrected on this! Ive never purchased or tried to purchase policies through them. 

At the webinar I attended, they were taking consultations at a reduced rate. I didnt sign up for that but I think there was a once off payment, however it does look like there is a separate pricing model.


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## peggy14 (8 Dec 2022)

ClubMan said:


> Per hour?
> 
> 
> 
> ...


FB charge a once of fee for an full hour consultation - mine at was 100/150.
They made me aware of Household benefits package for my DD so this more than covered the cost with one months payment. 
I have received further advises from them at no cost. 
As an intermediary they are also obliged to quote the fees they get for other products.  For me they get commission on a Whole of Life Policy.  
I get a free monthly newsletter with contributions from all with team at FB. 
I get free access to booklets re setting up a trust, booklet for Guardians & Trustees and so much more e.g. how budgets effects me.


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## peggy14 (8 Dec 2022)

dubdub123 said:


> I actually attended one of their free webinars and that was very informative regarding
> - disability allowance
> - household benefits scheme
> - car tax refunds (very specific criteria)
> ...



Mine was a one to one consultation (also at reduced rate think c 100/150).
It was so worth it for me..I had all my specific details prepared so advise was very specific.
You get access to their files for free following one on one which has super information / guidelines.
I attended a Free Teams meeting recently for those who had undertaken one to one and who may need extra advise to help them along the 'trust' process - super meeting - no financial gain to FW as they do not recommend Solrs to complete the trust and no products on offer for sale. 
They recommend you plan for 5 years and then review, as life with disability can change so much within 5 yrs, and its hard to look any further.
I have spoken to FW many times and there has been no further charges they encourage contact so that information can be shared.
It does take time to understand the Trust mechanisms for your own personal situation,  my time is precious to me but well spent on this matter.
Disability needs to be proven when Trust actually put in place which is DOD - but tax exemptions will defo apply and my trustees will ensure this.  
I did purchase a Whole of Life Policy from FW and they are paid a commission on this - I am very happy with the product.
Main cost Too rust will be my solicitor but I don't mind paying the extra to have a Will in place that secures by daughters x2 future.
I won't comment any further as my posts on this thread are being deleted as they are deemed to be offensive.


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## Early Riser (8 Dec 2022)

dubdub123 said:


> So if i were to make a will specifying that I wish to have a discretionary trust set up for my son, following my death, do you know when the medical sign off/evidence must be provided?


 
Sorry, I can't advise on this. I understand that the medical evidence is submitted whenever the Trust is set up. (This is for the tax exemption - that may not be the only reason someone considers setting up a trust, eg, a son/daughter with alcoholism/drug addiction). 

I would imagine some conditions are more straighforward to verify, eg, when there is a pervasive developmemtal disorder throughout the childhood years. I understand from other posts that your son has been diagnosed with Asperger/Autism. Have you spoken with any of the Autism organisations who may be able to offer some guidance? I know Inclusion Ireland have been making members aware of Trusts for years. Possibly they may have some pointers? (https://inclusionireland.ie/information-for-family-members/)


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## dubdub123 (8 Dec 2022)

Early Riser said:


> Sorry, I can't advise on this. I understand that the medical evidence is submitted whenever the Trust is set up. (This is for the tax exemption - that may not be the only reason someone considers setting up a trust, eg, a son/daughter with alcoholism/drug addiction).
> 
> I would imagine some conditions are more straighforward to verify, eg, when there is a pervasive developmemtal disorder throughout the childhood years. I understand from other posts that your son has been diagnosed with Asperger/Autism. Have you spoken with any of the Autism organisations who may be able to offer some guidance? I know Inclusion Ireland have been making members aware of Trusts for years. Possibly they may have some pointers? (https://inclusionireland.ie/information-for-family-members/)



Thank you, I havent been in contact with them so I will check them out as well. Appreciate the pointer.  Its all relatively new regarding official diagnosis. I did initially start to look at updating my will, but had to just step away ftom it, and im going to focus on it again soon, so any information is helpful. I'll check out their site and recommendations. Thanks


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## BrokeBroker (9 Dec 2022)

Early Riser said:


> Best of luck with it. But just be aware that the tax exemption for the discretionary trust is not straightforward. The relevant chapter from the Revenue manual is here: https://www.revenue.ie/en/tax-profe...ains-tax-corporation-tax/part-07/07-01-20.pdf



Does the tax exemption come into effect only for inheritance greater than what the other poster mentioned, something like 330 thousand?

Only above which does CAT apply?

i.e. if inheritance was lower than this, one wouldn't go looking for a tax exemption; it wouldn't be a consideration.

The primary reason _*by far *_for wanting to establish a trust would be to avoid having benefits discontinued by way of means testing.


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## AAAContributor (9 Dec 2022)

I think we probably need to be clear here on what the 'exemption from tax' is that we are talking about - as there are a lot of them!

The proposal under consideration, if I have it right, is for the OP's parents (the settlors) to establish a will trust whereby a discretionary trust (DT) would be established on the last of their deaths for the OP (beneficiary) into which assets are 'settled'.

The taxes that are potentially involved here are:

1. Stamp duty,
2. Discretionary Trust Tax (DTT),
3. Income tax on income earned by the trust and capital gains tax (CGT) on trust gains,
4. Surcharge on undistributed income, and
5. Capital acquisitions tax (CAT) on distributions out of the trust.

1. No stamp duty charge arises on the transfer of assets into the trust (on death) or on appointments of assets from the trust to the beneficiary.

2. The charge to DTT kicks in if the settlor is dead and the there are no beneficiaries under the age of 21. It looks like that will be the case here. Revenue recognise that there may be a genuine need to provide a DT as a measure of a financial protection for a vulnerable beneficiary such as an incapacitated adult and there is an exemption from DTT where a trust is for this purpose. It would have to be verified if the OP meets this hurdle. This is not an automatic exemption - it is necessary to make an application to Revenue when the trust is established providing them with a medical certificate from a doctor confirming the beneficiary meets the conditions for the relief to apply. Exemption has to be claimed on Form IT4 and agreed by Revenue. https://www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part05.pdf

3. A protective trust (like what is being proposed here) is subject to income tax (and CGT too, though I'd have to double check this).

4. Any income not distributed out of the trust is subject to a surcharge even if it is a protective trust.

5. Assets distributed from the trust are in scope for CAT. If the total amount distributed is less than the Group A threshold of €335,000, then there is no CAT. Also, if you are permanently incapacitated because of physical or mental infirmity, distributions exclusively for the purposes of discharging 'qualifying' expenses are exempt from CAT. Qualifying expenses are expenses for medical care, including the cost of maintenance associated with medical care.

It is difficult at this remove to advise as the level of assets, the extent of your incapacity and what you intend to do on the death of your parents is unclear. For instance, the plan is to inherit the one-bed property that is ear-marked for you and a share of the family home which will most likely be sold. What is the status of the one-bed property now? Is it rented out? When you inherit the property on death will you come off HAP and move in to the property? Your principal residence is outside the scope of means testing if I understand correctly. How much extra do you intend to inherit from the sale of the family home?


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## dubdub123 (9 Dec 2022)

This is excellent information.
In relation to point 2, its difficult to know if a person will meet the criteria set by revenue. It seems very specific. 
If they dont agree to exemption, might it still make sense to setup trust? The person would still have same difficulties regarding being financially independent. 
Should a will take into account the tax exemption, or no need and just set up trust and pay the associated taxes.


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## AAAContributor (9 Dec 2022)

I'd be careful of a single-minded focus on a trust here.

The OP wants to utilise assets that are potentially coming their way to get back on their feet without jeopardising their DA.

A much wider look at what the inheritance involves is key here. For instance - what level of estate and assets are we talking about? What about the 3 beneficiaries of this estate (OP + 2 siblings) - what is the proposed split here? Are the OP's siblings in a position in life to take a lesser share etc.?

Say for instance the estate comprises the one-bed property and the family home that the OP has already mentioned. The 1-bed is worth €250k and the family home €500k. The plan is that the OP gets the one-bed and a 1/3rd share of the proceeds from the sale of the family home. That's an overall inheritance of €417k or 55% of the estate.

If that is the plan, would there be a case to instead leave the family home to the OP and then the 1-bed to the 2 siblings? The inheritance of €500k would not be hugely more than what the OP would be currently getting. This could allow the OP a larger residence and the ability to utilise rent-a-room relief for some extra income and not have it affect their social welfare payment: https://www.thejournal.ie/social-welfare-rules-5768336-May2022/

In this instance they would have a CAT bill of €55k on the inheritance of the house ((€500k - €335k) x 33%). However, a trust could be used here for the family home to allow the OP time to claim Dwelling House Relief and pay no CAT (they would have to live in it for 3 yrs as a condition of the relief, amongst other conditions). Best case is that they meet the hurdle to pay no DTT. Worst case they don't and have to pay the initial charge of 3% DTT in year 1 (it's actually 6% but half is refunded if the assets are appointed out of the trust within 5yrs) and an annual charge of 1% DTT in years 2 & 3 for a total tax bill of €25k. Alternatively, the OP could move back home now and get the clock started on meeting the condition for dwelling house relief and not have to use a trust at all, but this may not be a runner.

OP - I'd advise you to clarify with your parents and siblings what the estate will be and what the proposed split is and only then start looking at the next steps.


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## Brendan Burgess (10 Dec 2022)

Folks

Let's be absolutely clear.  We have Posting Guidelines on askaboutmoney.

We have deleted posts which were in breach of them. 

1) Use of bad language - we have zero tolerance - so don't waste your time posting long posts containing bad language. 
2) Personal attacks on other posters. 
3) No discussion of moderators' decisions 

No posts are deleted for the opinions expressed in them. 

I don't want to close this thread but if posters continue to breach the guidelines and then complain about their posts being deleted, I will close the thread.

Brendan


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## Ryan (26 Dec 2022)

If you have been in Disbikity long term I suggeat you look into Invalidity because it’s not means tested.

On the issue in question, I am aware of a couple who had a dependant adult child and both died without making a will. The family agreed that the sum of their estate would be used to purchase their daughter a suitable hone so as she could continue to live independentl. Social welfare asked lots of  questions and did threthen to cut her off but it got sorted


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