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

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.

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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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.

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

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

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How large would "very large" be?

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

BrokeBroker said:

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

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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

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.

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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?

Indeed

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?

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

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.

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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.

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

Brendan

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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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BrokeBroker said:

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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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.

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 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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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.

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.

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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 !!

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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ClubMan said:

The very point that I made here earlier.

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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.
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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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.

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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.
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:

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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.

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.

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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

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

Brendan

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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.

peggy14 said:

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

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Per hour?

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

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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.

ClubMan said:

Per hour?

Remuneration - Children with special needs - Financial Wellbeing

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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.