Every day the papers are littered with stories about dementia and the other consequences of an ageing population. Luckily, the statistics show that most of us will not suffer from dementia but this article looks at how you can plan for the future and protect your family.
Here are some of the issues you should consider:
Who should make financial and medical decisions if you cannot?
Probably the single most important thing that you can do to is to consider who you would want to assist with your finances, and perhaps health decisions as well, if you were unable to look after your own affairs. A Lasting Power of Attorney can give you the peace of mind of knowing you have appointed an Attorney or Attorneys who will be ready to step in if you do ever need help.
If someone has left it too late to make a Lasting Power of Attorney, there is an alternative whereby family or friends, for example, can apply to the Court of Protection. The Court can appoint a Deputy to assist with someone’s financial affairs and, more rarely, to make medical decisions. However, this can be an expensive and lengthy process and so it is preferable to make a Lasting Power of Attorney in advance.
How will you fund your care?
Care Home fees can also be a considerable concern to many clients. The general position is that Local Authority funding will only start to become available when your assets drop below £23,250. The Local Authority will start to contribute on a sliding scale until your capital drops below £14,250. Even then, you are likely to be required to contribute the bulk of your income.
In the case of couples, it may be worth reviewing your Wills to see whether you could safeguard some of your assets by leaving them in trust for the survivor rather than simply gifting everything to one another. This can potentially give the survivor more choice about their own care and make the funds work harder for them, as well as offering the potential to safeguard assets for the next generation.
Is your Will up to date?
It is always worth reviewing your Will regularly to make sure it still reflects your views and to consider whether it could be more efficient from a tax perspective. Family circumstances change and the Inheritance Tax position has also become more complex in recent years with the introduction of the new residential nil rate band.
Should you consider making gifts to save inheritance tax?
There are various exemptions allowing you to make gifts which could potentially save your estate inheritance tax at 40%. If your estate is worth more than £2 million making gifts can be even more important as gifting may increase the tax allowances available to your estate.
If you would like to discuss any of the issues raised above please do not hesitate to contact me or your usual contact at Wansbroughs on 01380 733300 or email us at firstname.lastname@example.org