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  1. #4361
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    Quote Originally Posted by BlackPeter View Post
    And don't forget the hard working policemen, teachers, assistant doctors, retail staff, bus drivers, soldiers and factory workers. They all will be unhappy to see themselves now in the same pay bracket as untrained aged care staff. Expect over the next years a huge push in wages for basically everybody as well as in prices. They call this inflation. Thanks to the judge and the unions for starting the merry go round again ...! Everybody will benefit: higher prices for goods and services and higher interest rates leading to unaffordable mortgages and with that to dropping house prices. Looks like we solved all our problems!
    Good point. I am not surprised and not disappointed that we are getting to this point after many many years of pathetic wage increases in NZ despite a good steady economy. Our average salary of USD 38k in 2015, about 8-10% below the OECD average is unacceptable and time for NZ to lift our game. But of course this is not a discussion for this thread :-)

  2. #4362
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    Quote Originally Posted by kura View Post
    This is incorrect, as I know from personal experience that timing of trust formation is irrelevant when applying for a residential care subsidy.
    My mum set up a trust (for death duty purposes) back in the mid 1980's & transfered debt free rental properties into the trust.
    The last 2 years of her life were spent in residential care & she was required to pay most of her cost of care.
    The rule that caught her, was "deprivation of income" by transfering income earning assets into a trust, she had deprived herself of income, & this deprived income was taken into account when calculating the residential care subsidy.

    However if you look at the nest generation (ie Me & other kids) and assume the trust was never distributed, then I would qualify for the full subsidy, as I have never deprived myself of either income or assets, as I never put anything into the trust, and I am not in a sole trustee/beneficiary situation.

    Yes rules are complicated, & if you try to avoid the rules, your scheme will probably fail. There is going to be the rare exception to this general rule though.
    Disc: Spent time reading detailed regulations & cases that were heard by Social Security Appeals Authority on the subject.
    Good debate and not arguing with the veracity of what you've said but if we return to Mr and Mrs Joe average and use that as a case study. Lets suppose they transferred their family home and their $300K of savings into a family trust over a decade before Joe had to go into care. If they hadn't of done that Mrs Joe average would have seen their liquid assets depleted to about $120K (a $180,000 reduction over 3 years) as they're required to pay for Joe's full care costs at about $60K a year, soon to go up with increased labor costs ?
    This would undermine her security significantly in retirement as she might live another 10-20 years after Joe passes away, a long time with only $120K in liquid assets left, would you not agree ?

    On the other hand seeing as their trust is earning say an average of 5% on those $300K funds, ($15K a year less tax at 33% for a family trust = $10K per annum) they would be required to channel that $10K a year to pay for a small portion of the circa $60K a year care fees. When Joe passes away in 5 years Sally Average is left with $300K, (the invested funds are not touched just the net income from them), to have a somewhat secure retirement with.

    dobby41 - Debates about whether kids deserve inherited money...let's not go there...you won't get much argument from me, our two twenty somethings are both rat-bags. We try and love them anyway, sometimes that's easy and other times...
    Last edited by Beagle; 19-04-2017 at 11:07 AM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  3. #4363
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    Quote Originally Posted by couta1 View Post
    JT, you are going off largely hearsay rather than fact, bottom line is, why should a hard working nurse with a degree, having sacrificed plenty to gain their qualification receive basically the same pay as a caregiver? Like I said earlier this can of worms has just been opened. PS-Any increase to nurses will come directly off bottom line profits, whoever the company, some would struggle to pay it and survive. PPS-Whoops forgot to mention all the hard working activities staff(Especially those working in dementia units) some with diversional therapy qualifications, who will be staying on under $18 per hr.
    True i was off topic there but it was a first hand experience to ,me about some nurses, I'm sure there are many good ones too. Yes this is the beginning of inflation increasing but i know a hell off a lot of people have been just getting by and not getting ahead.

    Mark this day as the trigger for a big shift in our economy/country. Hope its for the better of all and things don't get out of hand interest wise or prop crash wise.

  4. #4364
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    Quote Originally Posted by Roger View Post
    Good debate and not arguing with the veracity of what you've said but if we return to Mr and Mrs Joe average and use that as a case study. Lets suppose they transferred their family home and their $300K of savings into a family trust over a decade before Joe had to go into care. If they hadn't of done that Mrs Joe average would have seen their liquid assets depleted to about $120K (a $180,000 reduction over 3 years) as they're required to pay for Joe's full care costs at about $60K a year, soon to go up with increased labor costs ?
    This would undermine her security significantly in retirement as she might live another 10-20 years after Joe passes away, a long time with only $120K in liquid assets left, would you not agree ?

    On the other hand seeing as their trust is earning say an average of 5% on those $300K funds, ($15K a year less tax at 33% for a family trust = $10K per annum) they would be required to channel that $10K a year to pay for a small portion of the circa $60K a year care fees. When Joe passes away in 5 years Sally Average is left with $300K, (the invested funds are not touched just the net income from them), to have a somewhat secure retirement with.

    dobby41 - Debates about whether kids deserve inherited money...let's not go there...you won't get much argument from me, our two twenty somethings are both rat-bags. We try and love them anyway, sometimes that's easy and other times...
    While I can agree with the general principles, you have overlooked one thing about Mr & Mrs Average.
    They are two individual persons who will each own 50% of all assets. A matrimonial property settlement can be easily used to bring a equal distribution of assets into legal effect.
    So the $300k of joint funds, should be looked at $150K belonging to Mr Average, & $150K belonging to Mrs Average Then take away the $120K limit & Mr Average should only have to pay $30K towards the cost of his care, not a big impact on the family finances, given that he may remain in care for 10...20 years.

  5. #4365
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    Quote Originally Posted by kura View Post
    While I can agree with the general principles, you have overlooked one thing about Mr & Mrs Average.
    They are two individual persons who will each own 50% of all assets. A matrimonial property settlement can be easily used to bring a equal distribution of assets into legal effect.
    So the $300k of joint funds, should be looked at $150K belonging to Mr Average, & $150K belonging to Mrs Average Then take away the $120K limit & Mr Average should only have to pay $30K towards the cost of his care, not a big impact on the family finances, given that he may remain in care for 10...20 years.
    Fair comment but quite a different result if they had say $600K in assets other than their family home. I think what this good debate underscores is the importance for most Mr and Mrs Joe average to get good tax and legal advice well before they retire.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  6. #4366
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    Quote Originally Posted by Roger View Post
    No argument whatsoever from me on that one. But what about Joe and Sally average with say $300K in investments and a modest family home. Should their kids have a substantial chunk of their inheritance obliterated when Joe goes into a dementia ward for five years ?
    Maybe the asset and income thresh-hold limits should be raised for everyone and not just for those who have paid accountants and lawyers to establish discretionary trusts. Should there be a government hand-out so that beneficiaries can receive inherited wealth? If you have ever settled assets in a discretionary trust from which you have ever derived benefit - the current value of those assets should be included in a means assessment.

  7. #4367
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    Quote Originally Posted by Roger View Post
    Fair comment but quite a different result if they had say $600K in assets other than their family home. I think what this good debate underscores is the importance for most Mr and Mrs Joe average to get good tax and legal advice well before they retire.
    Yes, Agree !

    One final thing I will mention, is that while the rules about rest home care, make it useless to attempt to use a trust to bypass government policy, there was one benefit that my mum got from setting up her trust.
    Prior to going into care, my mum suffered a stroke & lived at home for some 20 years prior to going into a rest home. (wheelchair bound) Because she was at home & had a Community Services Card she was eligible for fully funded carers to come in each day ( 2hrs in morning & 1 hr in evening, seven days a week, plus a 2hr shopping trip once a week )
    Compare this to a friends mum (who never set up a trust) who is in a similar physical state, and earns too much to get a Community Services Card, she must pay the full commercial rate for a similar degree of in home care.

    Just to change subject, I really appreciated the work these caregivers did, & was appalled to learn that their pay was so low, yep they deserve their increase

  8. #4368
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    Quote Originally Posted by kura View Post
    ....
    Prior to going into care, my mum suffered a stroke & lived at home for some 20 years prior to going into a rest home. (wheelchair bound) Because she was at home & had a Community Services Card she was eligible for fully funded carers to come in each day ( 2hrs in morning & 1 hr in evening, seven days a week, plus a 2hr shopping trip once a week )
    Compare this to a friends mum (who never set up a trust) who is in a similar physical state, and earns too much to get a Community Services Card, she must pay the full commercial rate for a similar degree of in home care....
    So your Mum had access to her assets in the trust, yet could claim poverty to get tax payer provided government and Health Board funding?

  9. #4369
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    I seriously doubt there is much point setting up a trust to try to get the Govt to pay for rest home care etc. We set up a trust a few years ago to manage assets after one or both of us died and the legal advice was pretty clear that it would not have any effect on those types of things. I think you guys are dreaming!

  10. #4370
    ShareTrader Legend Beagle's Avatar
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    Default Lets move any further discussion on Trusts to this Estate planning section

    I think we're well off on a tangent here and a lot of this Trust stuff has nothing to do with SUM so while I respectfully disagree with you Biscuit perhaps we should move any further discussion on this area to this estate planning area set up for this purpose. http://www.sharetrader.co.nz/showthr...state-planning.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

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