Estate planning can be an uncomfortable process as it forces us to think and prepare for our eventual deaths.  This leads us to consider how we are going to provide for our families once we die.  Making a valid Will is the best way of ensuring that your wishes are carried out after your death and allows you to make whatever provisions you feel are appropriate in respect of the distribution of your assets.

It can however be tempting to ‘wrap up’ matters relating to property before your death. This can be a positive action in many cases. However, there are circumstances where a person has deprived themselves of a valuable asset when it comes to financing their own care and welfare as they get older.  The following shows where this might happen:

Transfer or sale of property during your lifetime

This can be an attractive option and common examples include:

  • Parents transfer land to a son or daughter, often to build a new home.
  • One or both parents move in to the family home of their son/daughter as this can provide a practical solution as they advance in years. They may then transfer/sell their own property.

A potential pitfall arises where there is no agreement regarding the maintenance and care for that person or a right of residence.  Disagreements may later surface in this respect and the parent may have already transferred/sold their assets leaving themselves without any means of financing their care in the future.

Fair Deal Scheme

  • Under this Scheme you will be required to contribute 80% of your assessable income and 7.5% of the value of any assets per annum towards the cost of your care in an approved nursing home.
  • Assets include land and property. There is an option of obtaining a Nursing Home Loan whereby payment of the 7.5% contribution is deferred.
  • Income is broadly defined under the Scheme.
  • The HSE also has authority to consider disposals of assets in the 5 years prior to making an application for the Scheme.
  • If you make an application under the Scheme within 5 years of the date of the transfer of the lands this will be deemed an asset and will be considered when calculating your contribution to the cost of your nursing home care under the initial financial assessment aspect of the Scheme.

It is important to consider all options before making such decisions.