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  • Transfer to a Trust when retire

    A friend of mine is about to retire, they own their home in their own name

    Should they transfer their house into a trust?

  • #2
    Retiring rarely has any impact at all on this decision. If there was a good argument to transfer it before, there probably still is; if there was no reason to do so, there probably still isn't.

    What benefit do they hope to gain from having a trust, and why is this suddenly relevant in retirement?
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    • #3
      Well if they need to go retirement village it costs quite a bit of cash. If they have assets under own name they maybe forced to sell. Not to sure how that works, was hoping someone could help here

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      • #4
        If the idea is to sequester assets so as to ensure the Rest Home care subsidy, it's far too late to even think about it.

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        • #5
          Originally posted by Perry View Post
          If the idea is to sequester assets so as to ensure the Rest Home care subsidy, it's far too late to even think about it.
          What if they live another 20-30 years?

          I read somewhere that you can transfer it to a trust or to family but only a certain amount per year is moved over to the trust protection wise

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          • #6
            I read that a Trust can be set up anytime and the gifting should be done sooner rather than later - leading up to the 5 years before an assets test you're allowed to gift $6K per year and $27,000 every year prior to that. So the later you leave setting up the trust the less years you have to fully gift your assets before the asset test if a residential care subsidy is required. (I.e you end up in a rest home etc).

            cheers,


            Donna
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            • #7
              The removal of gift duty prompted a flurry on what-ifs. Last I knew, there was no certainty (among lawyers and accountants) about how far back a gummint agency could delve, when considering eligibility for the Rest Home care subsidy together with any financial transaction that was described as something like: intentional impoverishment.

              Prior to the abolition of Gift Duty, it had been accepted that gifts older than seven years were not counted. No one seems to know how far back is counted, now. Especially in relation to the size of each annual act of impoverishment.

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              • #8
                They go back 10 years regarding rest home subsidies automatically. And they tend to be right prats about it all, in my experience.
                Last edited by Perry; 02-09-2016, 07:02 PM. Reason: Moderation

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                • #9
                  Originally posted by Bobsyouruncle View Post
                  They go back 10 years regarding rest home subsidies automatically. And they tend to be right prats about it all, in my experience.
                  As they should be, frankly. Why should someone get a subsidy from the taxpayer when they have the means to pay themselves?
                  AAT Accounting Services - Property Specialist - [email protected]
                  Fixed price fees and quick knowledgeable service for property investors & traders!

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                  • #10
                    Originally posted by investorak View Post
                    Well if they need to go retirement village it costs quite a bit of cash. If they have assets under own name they maybe forced to sell. Not to sure how that works, was hoping someone could help here
                    Just on the 'forced to sell' bit...

                    If the asset is a family home, they are not forced to sell; the government will provide an interest free loan against the house, that must be repaid when it is eventually sold, or six months after the death of the retiree.

                    Other assets, why shouldn't they have to sell?
                    AAT Accounting Services - Property Specialist - [email protected]
                    Fixed price fees and quick knowledgeable service for property investors & traders!

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                    • #11
                      Originally posted by Anthonyacat View Post
                      Just on the 'forced to sell' bit...

                      If the asset is a family home, they are not forced to sell; the government will provide an interest free loan against the house, that must be repaid when it is eventually sold, or six months after the death of the retiree.

                      Other assets, why shouldn't they have to sell?
                      I tend to agree with this.
                      It is interesting how some people bemoan the govt and all it does but seem to want them to pay for their care when they are old even though they are well off.

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                      • #12
                        Originally posted by Bobsyouruncle View Post
                        And they tend to be right prats about it all, in my experience.
                        I like them being prats when it is about my tax money!

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                        • #13
                          Originally posted by Bobsyouruncle View Post
                          And they tend to be right prats about it all, in my experience.
                          Originally posted by Wayne View Post
                          I like them being prats when it is about my tax money!
                          Unfortunately, Wayne, WINZ is often selective and also very dilatory in such matters.

                          I was accused of marrying my sister and failing to declare property related to a matrimonial settlement. It took a year to extract a retraction and apology for that libel. When I asked why they didn't check with the Registrar General's register of Births, Deaths & Marriages, WINZ said they were too busy for that. I asked how it was that they weren't too busy to query the LINZ database and get a whole lot of things wrong, but couldn't spare the time to get things right. No response to that.

                          One functionary asked me on the phone what such-and-such a building was on my PPOR property. I asked a question and the answer revealed that the said factotum was spying-in-the-sky using google satellite view on her computer, while we were talking on the phone!

                          Too busy to what?


                          EDIT

                          Interestingly related tale in other news, this morning.
                          Last edited by Perry; 02-09-2016, 10:18 AM.

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                          • #14
                            They [WINZ] are incredibly unreasonable. It's not about doing the right thing it's just about avoiding liability if they can. They operate like Sherlock Holmes assuming everybody has hidden everything from them and generally make life hell at a time you often have an injured parent or similar.
                            Last edited by Perry; 02-09-2016, 07:01 PM. Reason: Moderation

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                            • #15
                              Originally posted by Bobsyouruncle View Post
                              I am sure I said pricks not prats
                              Nope - still there as prats.

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