The Importance of Planning Ahead
Difficult conversations
It may be becoming apparent to you that your relative is coping less well than they used to, either physically or mentally. You want to help, yet sometimes it is not always easy to broach the subject with them for fear of wounding their pride and damaging their self-esteem. Often they will feel deeply concerned about their own loss of independence, yet it is important to have these conversations. So how can you raise these difficult issues?
It is a good idea to start by discussing the issues with your siblings or other members of the family to ensure you agree on the main problems, before discussing it with your relative. This might be about health issues, continuing to live alone, or management of their general finances and paperwork. Find out what the options are and how they might work before launching into any discussion with your relative. It is also essential to think about your relative’s view as well as your own. If you think ahead about their possible objections, you can answer them calmly and knowledgeably. They may also have thought these issues through and have practical answers that you may not have thought of previously, so keep an open mind. Be prepared to revisit conversations several times and give your relative time to think on their own about your suggestions. If they feel under pressure, they are less likely to react positively. Most of us don’t like change and it needs to be managed gradually. Try to talk in a relaxed environment, ideally without the kids running in and out, and where it is private enough to have a sensible conversation, and be prepared to listen and accept your relative’s viewpoint.
Every situation varies. It can be that you are helping one relative to look after another older ailing relative, or that you have only one relative remaining. Whatever the case, you must consider certain issues, such as whether the person in question can manage certain day-to-day tasks. For example, can they still do the housework and their own cooking? Do they live alone and if so, can they cope? Are they carrying out caring duties for a partner and struggling? Can they manage the stairs? Do they appear nervous about living alone, or even as a couple, and can they still hear the door, the television and the phone? Do you think that they are feeling isolated or lonely, and are struggling to leave the house? Perhaps mobility is an issue, or their current home is simply too big to manage.
Based on these discussions, you can then address whether or not you should consider getting help. This might be help coming into their home and/or adapting their current home to assist them more easily. Maybe they should consider moving to a more manageable home in terms of size and/or location, or moving in with you, or with another relative. Alternatively, they can consider a number of alternative housing options, including sheltered accommodation, full residential care, or possibly a nursing home. Sometimes, your relative may not be well enough to participate in these conversations, but hopefully, they are, and if so, lay out all the pros and cons of each option, after having been through them yourself.
Should your relative live with you?
This is an option many people choose and often it works very well. Before making this decision, however, you need to assess this option carefully and consider a number of factors. Think about how it will affect your relationship with your partner and your family life with your children. Consider whether you have the time to take on this responsibility and all it entails, especially if your relative needs medical care and may need more in the future. Could you adapt your home if you needed to do so, both physically and financially?
You also need to ask your relative if they want to live with you, as they may be less keen on the idea than you are. In addition, they might be concerned about moving away from their friends and leaving behind local activities which they enjoy. It is not always easy to make new friendship groups when you are older.
If you decide that it is not the right thing to do to bring a relative to live with you, be honest with yourself about it and do not feel guilty. You have responsibilities to your partner and children, as well as to your relative, and you have to ensure that you do not fundamentally disturb those other relationships.
Helping your relative with their affairs
If your relative is increasingly finding it difficult to manage their own affairs, or has been ill, you may want to consider taking out Lasting Power of Attorney (LPA). Many people think this is a step only taken when someone is too ill to make their own decisions, but it is sensible to discuss taking this out on behalf of your relative before they become unable to cope. With soaring dementia rates (someone is diagnosed every three minutes in the UK), it is more important than ever for people to act while they are still mentally fit. It is highly recommended that people not only put their own power of attorney in place, but that they also support older relatives by helping them to get their affairs sorted out too.
There are two types of Lasting Power of Attorney (POA): health and finance. The health power of attorney means you can make medical decisions on behalf of your relative, should they be unable to do so. The financial power of attorney means that you can manage their financial affairs on their behalf, should they need you to do so. Often this is a big decision for a relative, as they fear giving up their own rights and control of their affairs. It can also lead to sibling conflict. It is often a good idea to hold joint power of attorney with siblings, so that decisions have to be made together and to avoid arguments. Be sensitive and be sensible on this issue. It is a very delicate one and should only be agreed upon at the right time for all parties, especially your relative. Remember that the actual power of attorney can only be used at such a time when your relative becomes incapacitated, regardless of when you have arranged it. Incapacity is decided by a doctor, who provides a letter to the relevant solicitor, informing them of your relative’s incapacity and that they should put Lasting Power of Attorney into effect (see here and here for more on this).
Essential financial planning from 55 onwards
People are living longer, but unfortunately, many live for longer in ill health. Whereas a few years ago, someone might only need to be in a care home for a couple of years, now it can be a decade or longer. Whether you are lucky enough to live a long, healthy life, or you need care, getting older costs money so it is essential to think about finances as early as you can to ensure you have everything you need to live a comfortable life. A recent report revealed shockingly that 85 per cent of adults aged between 51 and 75 had done no financial planning for care in their old age.
Everyone beyond the age of 55 should begin to develop a financial checklist to see how healthy their finances are. After all, they might have to rely on them post–retirement for 30 years, or even longer. Everyone’s circumstances are different, both financially and in terms of health and wellbeing, so it is very important to put together a realistic financial plan, which sets out both income and outgoings, not just for now, but over the next few years and decades, so you can work out what you have to live on and what you can save for future care.
It is a good idea to work out current monthly expenditure from bank statements and credit card statements and think about how this might change when you are not working, e.g. will you travel more? You can work out monthly income sources from pensions, bank interest and savings etc. Check what benefits you are entitled to, now and in the future, such as free bus travel and subsidised rail fares. You might be eligible for pension credits, which can top up the basic state pension, and you or your relative might also be eligible for other benefits, such as winter fuel payment.
If you have not already done so, you should decide when you want to retire, but remember that the state pension is not available until you reach the set pension age, which is between 61 and 68, depending when you were born and your gender (you can find out your exact situation at www.gov.uk). Anyone can carry on working past state pension age. If you do intend to retire, you need to give HMRC some notice, ideally a few months before. You also need to decide whether you want to delay drawing the state pension. Six months to a year before you intend to retire, you should contact your current and past pension providers and find out what pension is owed and how it will be paid. At work, you can contact the company’s pension trustee to get this information. Regarding the state pension, the Pension Service should contact you four months before you retire, but you can call them instead on 0808 100 2658.
Main financial considerations when considering paying for care
It is a good idea to gather all financial information together. This could include bank statements, savings and investment statements, details of state pension and any benefits, such as attendance allowance (see here for more details). Check that all benefits are being claimed. Help with this can be found at Citizens Advice, or on the government’s website, www.gov.uk. Add up all the income and consider any expenses that will be ongoing. This should include all household and personal expenses. Look at the difference between income and expenditure and think about how this will change as your older relative ages. Consider what would happen if all care costs, either at home or in a care home, had to be paid for.
It is also essential to think about housing. Is it time to downsize to a smaller property and invest the excess in savings or care plans for the future? Does your relative want to consider moving to a property in a retirement community, which can meet their changing needs as they age? You might also consider the pros and cons of various types of savings for care, from deposit accounts to care fees annuities. You can read more on this in the section Financial Planning here.
Essential legal planning for older people
There are a number of key legal documents, which are essential for you and your relative to have in place. In fact, anyone with a partner, spouse or offspring should ensure they have done their legal planning and agreed the main legal issues.
If you do not have a legal will, you cannot control to whom you can leave your estate. The only certainty of dying intestate (without a will) is that the tax man will be the main beneficiary. Wills are simple to make. You can do it yourself via the internet, or using shop-bought packs. You can also use a solicitor, or take advantages of at home services. If you are worried that by raising the issue of a will your relative will think you are after their money, there is a simple reply to this: you do not need to know what is in the will, you just need to ensure they have made one, so that in the event of their death, their estate can be divided as they would wish it to be. Anyone and everyone should make a will once they are self-sufficient and have income and/or property, yet 30 per cent of over-50s in the UK have still not done so (see more here).
A Lasting Power of Attorney (LPA) allows you to take decisions on your loved one’s behalf if they no longer have the mental capacity to do so. Many people have heard of a Lasting Power of Attorney (previously known as an Enduring Power of Attorney), but wrongly believe it is something to be considered only when mental incapacity sets in. If your relative suffers an accident or illness, you have no automatic right to act on their behalf. Without an existing LPA in place, you will be required to apply to the Court of Protection to be appointed as their deputy – a long, complex, costly and intrusive process. A relative cannot simply add their spouse or children to their bank accounts, as banks are instructed by the British Bankers’ Association (BBA) to freeze both solely and jointly held accounts when one account holder loses mental capacity. If anything happens to your relative and a decision needs to be made about life-sustaining treatment, you can only do so if you have an LPA.
There are two types of LPA: property and financial, which deals with assets and financial affairs and health and welfare, which deals with medical and care issues. Your relative should grant both. It costs nothing to draw up a Lasting Power of Attorney, unless you want a solicitor’s help to guide you through the correct process, which can be easier and more helpful than drafting it alone. It does, however, cost money to register an LPA. The forms you need are available to download from www.gov.uk.
An Advance Decision is a statement explaining what medical treatment the individual would not wish to have in the future, should that individual ‘lack capacity’, as defined by the Mental Capacity Act 2005. This statement does not have to be written down, although most are recorded as a written document as this is less likely to be challenged and will be valid in court if a dispute gets that far. Ideally, everyone should make an Advance Decision. This is because all of us are at risk of suddenly losing our capacity to make medical decisions for ourselves, if, for example, we become unconscious due to a car accident, a fall, or a stroke. Advance Decisions offer the opportunity to say what you do and do not want if that were to happen and take a great deal of pressure off your loved ones. Disputes about what is in an incapacitated person’s best interests are often the subject of protracted court proceedings and so having an Advance Decision would avoid this problem. Read more detail here.
Essential care planning for older people
The first step is to think what your ideal care scenario would be and then talk to a specialist independent ‘later life’ financial advisor (not just a standard financial advisor). They will assess each individual situation thoroughly and advise on all conceivable options, including whether any state funding is available. Specialist later life financial planners will be authorised and regulated by the Financial Conduct Authority, and will also have obtained a dedicated long-term care qualification. They will be Disclosure and Barring Service checked too to provide added reassurance that they are cleared to provide guidance to vulnerable people. The Society of Later Life Advisers (SOLLA) is a good place to look for further information: www.societyoflaterlifeadvisers.co.uk.
Care fees have to be paid by the individual if their combined assets in terms of capital and property total more than £23,250, which is not very much at all. Hence, most people will have to fund all or part of their care and, therefore, it is essential to plan your relative’s finances accordingly. There are certain allowances, however, which can be claimed based on a care assessment, such as attendance allowance, which is available to anyone over 65 who needs assistance with essential daily tasks for longer than six months. There are some scenarios where the NHS may be responsible for funding. If full-time care is required and a person’s primary need is a health need, all their care fees could be paid by the NHS through NHS Continuing Health Care, although this is difficult to obtain.
Emergency contacts
It is a good idea to keep a list of the essential contacts relating to your relative in case of emergency. You can use the following chart as a guide to fill in and keep all the numbers you might need. You can also leave your relative with a copy by the phone. If your relative is comfortable using a mobile phone, you can also add an in case of emergency contact number. Keep it simple such as a name, i.e. Emergency or SOS.
Emergency telephone numbers for carers to complete and keep
You can also create a shorter version for your relative to keep in their purse or wallet when they are out and about, in case of problems.
Emergency card for your relative to carry
