It isn’t easy to talk about financial matters with loved ones and when failing health becomes a factor too, the conversations can be tougher but even more vital.
If you are worried about a parent or relative’s health, there are things you can put in motion now to help ensure peace of mind and financial security.
Here are some things to consider:
- Speak to them and find out your relative’s current arrangements, their wishes for future care and the person they want to manage their finances
- Research can offer peace of mind so find out about any available benefits and read up on any specific health conditions
- Get organised and ensure a Power of Attorney and will is all up to date and easy to locate
- It’s never too early to get LPAs (Lasting Powers of Attorney) in place or wills drawn up, to protect yourself and your family against the unexpected too
- There are resources to help you: Age UK and Citizens Advice are all here for you
If you believe a parent or relative is becoming ill, it is perfectly natural to worry. You can help to ease your concern by taking proactive steps to ensure their financial planning is in place, up to date, and on track.
We have put together a list of things you can do now to plan for the future to ensure you and your family are financially secure.
Have a conversation
The first thing you should do is to have a conversation with your parent or relative. You should do this before they get ill as if they have suffered a serious illness they may have lost their capacity to act. There are arrangements and plans for the future to put in place. The sooner these are sorted the better.
There are some key questions you need to discuss with your parent or relative:
Do they have a valid will and Lasting Power of Attorney?
If so, ensure you know where the will is and have discussed your wishes with your family. If a Power of Attorney is in place have you discussed what you would like to happen should you become seriously incapacitated or gravely ill? You may find that you will need to make financial decisions on behalf of your parents.
Do they want a specific type of care?
The type of care that your loved one receives later in life clearly depends on the nature of their needs. Having a discussion early on in an illness can set everyone’s minds at ease.
If your loved one wants to stay in their own home for as long as they can, you will need to consider the cost of home care visits and the possibility of adaptations to their home which could be needed to ensure they can be looked after safely.
All types of care will each come with varying costs, so it is crucial that you plan based on their wishes, meaning you need to have those tough conversations now.
Have they specified who they want to look after their finances?
They may have a trusted adviser who they have worked with for many years, who personally understands their plans and goals, but if that’s not the case, it may well fall on your shoulders to look after their affairs.
To do this, you will need to have honest discussions with them now.
Research, research, research!
Whether it’s the technical side of the benefit applications or the latest scientific research into any given illness, you could be dealing with things you haven’t had to think about before. This is where your research comes in handy.
Are they entitled to any grants or benefit?
Your parent or relative must be of state retirement age and have a physical or mental disability/illness, or both, that is severe enough that they need help or supervision to care for themselves.
They must also have needed that help for at least 6 months (unless they’re terminally ill, in which case a claim can be made straight away).
The severity of the illness will dictate the type of care that they receive and it may be possible for you to collect a Carer’s Allowance.
This allowance is £67.25 per week in 2020/21, however, you can only claim it if you spend a minimum of 35 hours a week caring for them and earn £128 or less per week (after taxes, care costs while you’re at work and 50% of what you pay into your pension).
Carrying out research as early as you can will mean that you can apply for the relevant grants or benefits as soon as you or your parent become eligible and factor them into your planning and budgets.
Don’t be rushed into the wrong decision when it becomes critical
As well as being fully aware of the financial help available, understanding the cause of your parent or relative’s ill health will also aid you in planning for their financial future.
Researching a specific condition or illness will help you to gain a better understanding of the various outcomes and options for the future.
If you find that decreased mental capacity may become an issue, you will need to consider arranging a Power of Attorney. The discussions that you have now will become even more important.
When a physical disability is likely to get worse, the path from care at home to assisted living to full-time care may become clearer.
Knowing what the future could hold will provide you with more knowledge, which in turn will allow you to make a much more informed decision when the time comes.
Get organised – What financial planning can I do?
Make sure there is a Power of Attorney
Once you have had the tough conversations and carried out the necessary research, there are some concrete actions you can take.
Make sure that your loved one has put a Power of Attorney in place. EPAs (Enduring Power of Attorneys) were replaced on the 1st October 2007, however, any document signed before that date is still valid. EPAs were replaced by LPAs (Lasting Power of Attorneys) and these can be more flexible. An LPA is a legal document that allows your parent or relative to choose the person who will manage their affairs once they’re no longer able. There are two main types.
A Health and Welfare LPA accounts for things like medical treatment, daily routine and care decisions. A Property & Financial Affairs LPA allows a chosen attorney to make financial decisions, pay bills and collect any benefits on behalf of someone else.
These must be made whilst your loved one is of sound mind and can be registered whenever they are needed. Having an LPA in place can help speed up the process of gaining control of someone’s finances, as well as giving all parties concerned great peace of mind.
Remember that your surviving parent or your relative’s spouse will not have access to anything that is not jointly held and children won’t be able to access anything without a Financial Affairs LPA in place.
Ensure any wills are up to date
Making sure your parent or relative has an up-to-date will is very important. This will enable their estate to be distributed in line with their specified wishes. If it isn’t up to date, you may want to suggest that they do this as a matter of urgency.
Being intestate (Dying without a will) means that your family won’t have a say in what happens to their estate and therefore there is no guarantee that it will tally with their wishes.
Keep paperwork organised
Once you have made sure that there is a will and an LPA correctly in place, being organised means that you know where all the relevant paperwork is being kept. They should all be kept together, in a secure place to ensure that adviser, solicitor, and executor can find them easily when needed.
Remember that these organisational tips will benefit you too. Its good practice for everyone to have a will and LPAs in place to guard against the unexpected and the paperwork should be kept securely where others know to find it.
This article is for information purposes only and does not constitute as advice or recommendations. Please do not act based on anything you might read in this article. All content is based on our understanding of current legislation which is subject to change.