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Planning for the costs of care for others / Long Term Care
The number of Long-Term Care enquiries has been climbing significantly over the last few years. As demographics change, we are all living longer and the strains/demands of modern-day life certainly seem to be taking their toll on the quality of life that many have in their later years. As clients become more reliant on care, they become vulnerable and this must be factored into all dealings whether with the client or an attorney. Because this is a complex (and usually emotive) subject, financial planners have to hold a specific qualification to be able to provide advice on this issue.
Power of Attorney
Many enquiries we receive come from those who have received Power of Attorney (or Office of Public Guardian Appointed Deputy) to care for someone's affairs, either financial or health related, at a time of need. There are two types of Lasting Power of Attorney, namely:
- Property and financial affairs
- Health and welfare
A good example of when advice is needed is when someone enters a care home because they are struggling to look after themselves through failing health. Of course there are other reasons to enter a care home, such as the social aspects of maintaining regular contact in a community. It is at this time that the issue of money and meeting the cost of care becomes very important.
Financial Assessment
Care costs can be substantial, however there are allowances which are not means tested. These allowances will not cover the cost of care and therefore a financial assessment must be made by a local authority. One’s income is taken into account and if this is still insufficient then one must consider the clients’ assets. Priority must be given to ensuring that care costs can be met, and all options can be considered. Financial planning is essential to provide the best outcome possible for the vulnerable client.
Many new Attorneys/Deputies and family members find the prospect of financial planning to meet care costs a daunting task, usually because of the capital involved and the high income that needs to be generated to meet on-going care costs. Good quality advice is important in this instance, to ensure that income, and any shortfalls, can be understood and balanced and that this advice should be reviewed regularly.
