Should I gift money to our children now?

  • Should I gift money to our children now?
    Independent.t. E.
    We are retired and fortunate to be on certain pension benefits, but we also have about 500 000 euros in savings. We have two adult children in their late 20’s early 30’s, single with a young family, and another plans to start at some point.
    https://www.independent.ie/business/personal-finance/should-i-gift-money-to-our-children-now-37185518.html
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We are retired and fortunate to be on certain pension benefits, but we also have about 500 000 euros in savings. We have two adult children in their late 20’s early 30’s, single with a young family, and another plans to start at some point.

We have always had such a low-level of anxiety about nursing home fees for when the time will inevitably come. Recently I was talking with a person of familiarity with dementia, who died after 10 years in a nursing home. The family was clearly struggling with the burden of €60 000 per year private nursing home fees. We need to think about to give our children their inheritance now, not later, in order that our children might have more options or just more control over financial issues vis-a-vis a fair deal that will inevitably come with it? I hope you can help.

Frank, County Offaly

You are in a good position, both of you have long term clarity about where your income because of certain pension benefits. However, if one or both of you will end up needed full-time nursing home care, you probably won’t be eligible for home care scheme (fair deal scheme), which means test, and Your half-a-million euros in savings can be devoured. In these circumstances, you would be left not so much to pass on to their children.

As you suggest, the donation of money to their children now makes sense. For one thing, it seems that your children can do with financial assistance to build their houses – but there is another good reason.

While there is no certainty that either of you will end up in permanent care, there is certainty on taxes.

As it stands, your savings and the value of your property and pensions to be divided between two children about death, most likely, will amount to more than €310,000 for the child, which means that they will be responsible for 33pc tax on anything beyond that.

So, start to give them your property now. Provided that children have not received any substantial gifts from you, they can get up to £ 310,000 in total without any tax obligation to you or them.

If you plan it well when you pass away, your estate will be reduced to such an extent that they do not have to pay tax acquisition of fixed assets (cat) on his inheritance because he will be under €310,000 each.

In this case, even if you do need constant care, you can apply to the scheme a fair deal, because your assets are less likely to have a right to it. Your children still receive their non-taxable property.

The support scheme the nursing home for five years to look back that means that it will take any assets that you had in the five years prior to applying for the scheme.

This should give extra incentive for you to start to pass on their wealth to their children as soon as possible.

Hold the shares or sell?

In 2007, I inherited shares when my mother died. I continue to receive dividend checks, but Lodge them trouble – and I have no idea what stock I have at this stage. I used to have an Anglo shares, now everything sucks and I’m not sure if I should keep the stock in the long term. Plus, I’m thinking about changing the vehicle, or repairs in the house. What do you recommend?

The Name In English, County Dublin

The first thing I would say that is a good problem to have. For many people who own shares in a company (known as single-asset) rather than in diversified investment funds, posting of dividend cheques is a rare inconvenience. You know that all too well, but that’s what surprises me about this issue – losing money in Anglo shares, you can make the same mistakes again.

There is another inconvenience, which you have noticed about the recognition of the revenue growth in CG1 to return, assuming it is more than €1,270.

I’m not against promotions where the likelihood of failures in governance and management practices that one company at the expense of the shares of several other companies in different countries and different sectors, in other words, as part of a globally diversified investment strategy. Somehow, I don’t think that’s the case here.

Nor do I have the impression that you are relying on the income to achieve your life goals, and I’m glad to hear that.

It will be a white-knuckle ride to look at the volatility of the company’s shares in the markets today, knowing that your future depends on them increasing in price to any date in the future, you should sell them.

As far as I see, here you have one option: to sell the stock. If they produce dividends, they must command a reasonable price.

You didn’t buy them, so You don’t care what makes the return. Use the money to buy a new car or to renovate the house.

To use the losses to offset any future capital gains on investments that is subject to CGT on exit. Note: don’t buy more individual shares. To declare losses in the CG1 form of income – no time limit.

To overpay on a tracker?

We are on a tracker mortgage and able to pay, as the experts seem to constantly advised in order to reduce the term of the loan and the final amount we pay as interest. It’s very attractive, but our friend recently asked why we should bother considering the fact that trackers are such cheap money at the moment and that we should use our overpayment amounts to something, huh? We are now interested in it. Does he have a point?

Donald, County Wicklow

It is true that the so-called tracker mortgage, which reflects the European Central Bank’s interest rate plus a small margin, it is a cheap form of credit. Your friend has a point in this matter. But the danger in taking advice from friends and even professionals, when it is not given to individual order, is that the General opinion might be wrong for you.

I wanted to ask you what your goals are (I’ll bet your friend didn’t ask you about it).

You want your mortgage paid off before retirement, for example? If retirement is in the near future, it is a good argument to overpay.

But how are you set for retirement? Your pension will support you? You box things like life insurance? You have children who want to go to College? If so, investing in College Fund it may be better to use the money.

This gives you the opportunity to outline a detailed plan for the long term, but You are not going to be able to do this by listening to everyone. It’s time to change the way you get financial advice.

The only way to break through the noise to get a individual recommendation from someone who takes an umbrella view of the whole of your life, not just the mortgage.

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