Wills and Trusts

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premierrouge

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I have a terminal health issue and I need to provide for my child (18) who has cognitive issues? I own my own home and have modest investments. I have no close or extended family.

Our home is older and needs regular upkeep.

How do I provide for my child.

Is a Trust appropriate?
 
A Trust would make a lot of sense.

I am sorry to hear that.

Could you set-out some detail regarding your assets and I’ll do my best to help you?

Take care.
 
Essentially, the adverse tax consequences of normally associated with a Trust can fall away where the beneficiary has cognitive issues.
 
Thank for your reply, I dont understand the tax implications?

The assets would include property with rental income , main residence and savings/investments.
 
Okay, so people often use a ‘discretionary trust’ to effectively ‘warehouse’ assets and not pass them to their kids. It’s like a halfway house where the assets are instead held/controlled by Trustees. You choose the Trustees and they have ‘discretion’ to pay money out in line with your wishes.

For children with no issues, once they hit 21 negative tax consequences kick-in within the trust; essentially a 6% “penalty” up-front based on the total value of the trust plus 1% annually. But that penalty shouldn’t apply in your case because of your child’s cognitive issues.

No inheritance tax applies on the passing of the assets into the trust. Then as value moves out to your child over time, the €335k Parent/Child tax-free threshold applies (assuming it’s still there) and monies used for maintenance in relation to medical care are completely exempted. Monies used for support/maintenance of minor children are fully exempted (with ‘minor’ meaning up to 25 if they’re still in education).

What is the total value of your assets? Would you have Trustees in mind? And do you have a solicitor?
 
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If your child has a means-tested allowance (eg, Disability Allowance) a discretionary trust should help him maintain it, ie, it would not be taken into account for his means. A direct inheritance would be counted.
 
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