My sister has agreed to sell us her share of the home
In addition, would the 250k gift not be at risk of claw back?Just a question on this. If the mum is paid for the house, would the state/fair deal not be able to claim 7.5 per cent per year of the estate until her death? And thus potentially reducing substantially the estate (500k or 250k)? I might not have understood fully.
But she is not changing her life to look after your Mum.
Not necessarily, but the funds generated by the house sale would be used and included in the calculation of how much she will have to contribute under fair deal. Hence, the more money you have in the bank, the smaller the amount the state contributes under Fair Deal and the more you have to payIf the mother sells the house now and has a wedge of money in the bank, would that preclude her from availing of the fair deal scheme in the future?
Double check, but I believe this is now capped at 3 years.house sale would be used and included in the calculation of how much she will have to contribute under fair deal
So in the above scenario, the notional 250,000 the mother would receive for the sale of the house to sister#1 may well be used in the future to offset the cost of nursing home care.Not necessarily, but the funds generated by the house sale would be used and included in the calculation of how much she will have to contribute under fair deal. Hence, the more money you have in the bank, the smaller the amount the state contributes under Fair Deal and the more you have to pay
she effectively inherits early while the other one could see "her potential" inheritance used for the care of the mum. I understand that one makes a life-changing decision at this point. I have no issue with the Fair Deal per se. I find that this situation could quickly become fairly difficult one way or the other.
Huh?I said the situation could become fairly difficult. There would probably not be more money in the estate if the mother recruited a carer. But there could be no "notions" or "perceptions". If as strangers we think about these issues, they could also come up in real life.
Do you not understand what I mean or do you just think it is irrelevant?Huh?
If the house was sold and the mother retained the cash then yes, it would be used to offset the nursing home costs under Fair Deal. If the money was transferred to the sisters, then Fair Deal can look back at asset transfers over the last 5 years and include those in the calculations, so even aside from the Tax implications, it could still come in under Fair Deal.So in the above scenario, the notional 250,000 the mother would receive for the sale of the house to sister#1 may well be used in the future to offset the cost of nursing home care.
This would substantially reduce the value of the eventual inheritance of sister#2. So why would sister#1 buy her out of an inheritance now that may not ultimately have much of a value?
Of course the mother could hand over the 250000 to sister#2 as soon as she received it herself but this would be taxed as a gift rather than as an inheritance.
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