A lifelong support agreement or a support until death agreement

The main difference between these two agreements is the moment of transfer of assets, so carefully read the rights and obligations you might have as a maintenance provider or receiver before concluding an agreement

A lifelong support agreement and a support until death agreement are strictly formal agreements for pecuniary interest which are binding for both of the parties and regulated by the Civil Obligations Act.

You can conclude one of these as a maintenance provider or receiver. If you are concluding the agreement as the maintenance provider, you are undertaking to provide maintenance to the maintenance recipient (the other party or some third party) until their death. 

If you are concluding the agreement as the maintenance recipient, you represent that you are giving all or part of your assets to the maintenance provider.  

The main difference between these two agreements is the moment of transfer of assets:

• With lifelong support agreements—assets are transferred at the moment of the recipient’s death
• With support until death agreements—assets are transferred immediately after the agreement conclusion. 

A special regulation (Social Welfare Act) prohibits persons providing social welfare, persons employed in the field of social welfare and a certain number of their relatives to conclude lifelong support agreements and support until death agreements with beneficiaries to whom they are providing social welfare services if such agreements include the real estate of such beneficiaries of social welfare services. Such agreements with beneficiaries of social welfare services may not be concluded by:
 

• A legal or natural person providing social welfare
• A marital or non-marital spouse, civil partner, or informal partner or a lineal or collateral relative up to the second degree of kinship of a natural person providing social welfare
• A natural person employed in the field of social welfare
• A marital or non-marital spouse, civil partner, or informal partner or a lineal or collateral relative up to the second degree of kinship of a natural person employed in the field of social welfare.

Agreements concluded contrary to the statutory prohibition are null and void.

Concluding an agreement

The rights and obligations from the agreement are agreed independently with the other party, depend on the needs and capabilities of the parties and vary from case to case, but most commonly pertain to meeting the essentials for living such as providing or ensuring housing, assistance with personal hygiene, providing clothes and footwear, providing food and drinks, providing a certain amount of money in regular intervals, organising the burial of the maintenance recipient, etc.

By precisely regulating the scope and manner of provision of maintenance, you minimize the chance of a misunderstanding and potential requests for termination of the agreement due to default.  

The agreement must be:

• Made in writing
• Certified by a judge of the competent court or certified (solemnized) by a notary public or drawn up in the form of a notarial act.

At the moment of certification or drawing up of the agreement, an authorised person has to read the agreement to both parties and warn them of its consequences.
 

A lifelong support agreement

If you are concluding a lifelong support agreement as a maintenance provider, you are authorised to request the following under the agreement:

• An annotation in the land register—if the subject-matter of the agreement is real estate
• An annotation or other appropriate entry of the agreement in a public register—if the subject-matter of the agreement is moveable property or some right for which a public record is kept, such as motor vehicles.

The maintenance provider is not liable for the debts of the maintenance recipient after the receiver’s death. However, the agreement may stipulate that the maintenance provider is liable for the debts of the maintenance recipient towards individual creditors existing at the moment of entering into the contract.

A lifelong support agreement may be terminated:

• By mutual consent, after its performance has begun.
• Unilaterally:
  • If the maintenance provider and recipient agree to living together under the agreement and their relations deteriorate to such an extent that their living together becomes unbearable
  • If the other party is in default.
• Due to the changed circumstances after the agreement conclusion—if, after concluding the agreement, extraordinary circumstances arise that could not have been foreseen at the time of the agreement conclusion, making it excessively onerous for one party to perform or if under such circumstances a party would suffer an excessive loss as a result of the performance (for example, sudden deteriorated financial standing of the maintenance provider which makes it impossible to provide maintenance to the recipient).

If, after concluding the lifelong support agreement, extraordinary circumstances arise that could not have been foreseen at the time of the agreement conclusion, making it excessively onerous for one party to perform or if under such circumstances a party would suffer an excessive loss as a result of the performance, this party may also request variation of the agreement.

Should the maintenance provider die before the maintenance recipient, and the provider’s marital spouse and descendants invited to inherit the agreement:

• Agree to this—they assume the provider’s rights and obligations under the agreement
• Do not agree to this—the agreement is terminated, and they may not request compensation for the previously provided maintenance
• Are not able to assume the obligations under the agreement—the agreement is terminated, and they may require compensation for the maintenance provided to the maintenance recipient by the maintenance provider.

The court will determine the amount of compensation at its own discretion, taking into account the financial situation of the maintenance recipient and of persons authorised to extend the lifelong support agreement.

A support until death agreement

If you are a maintenance recipient under a support until death agreement, whereby the right of ownership of real estate is transferred, you can make provisions for the case that your maintenance provider stops meeting their obligation and disposes of your property to a third party by reserving the real encumbrance right before transferring the ownership of real estate to the maintenance provider.

By reserving the real encumbrance right, you will be authorised to request maintenance from any person who is or will become the owner of the real estate the ownership of which you transferred to be provided maintenance. In such case, you are authorised to request maintenance from third parties who acquire the ownership of the real estate, as well as from any subsequent person who acquires it (the current owner of the real estate is encumbered).
 
The provisions on the termination of a lifelong support agreement (please see “A lifelong support agreement”) apply as appropriate to the termination of a support until death agreement.

Should the maintenance provider die before the maintenance recipient and the provider’s heirs:

• Agree to this—they assume the provider’s rights and obligations under the agreement
• Do not agree to this—the agreement is terminated, they must return what the maintenance provider received as a fee (if they are unable to do so, they have to reimburse the maintenance recipient for the value of the acquired assets) and are not entitled to compensation for the maintenance provided.
• Are not able to assume the obligations under the agreement—the agreement is terminated, and they have the right to demand compensation for the maintenance provided by the maintenance provider to the recipient, but they are obligated to return to the maintenance recipient what the provider of support acquired under the support until death agreement.

The court will determine the amount of compensation at its own discretion, considering the financial situation of the maintenance recipient and of persons authorised to extend the support until death agreement and the rights enjoyed by the maintenance recipient under the real encumbrance.