Why it’s vital to talk to your parents before it’s too late
Every three minutes, someone in the UK develops dementia, so it makes sense to prepare in case you need to manage the finances of a loved one
Many of us understandably avoid difficult conversations about what to do when our parents become elderly and potentially no longer able to make sound decisions about finances or health care – but that can lead to a host of challenges. The truth is, the sooner you start planning for the future, the easier it will be for everyone concerned.
EastEnders star Barbara Windsor, 82 – who was diagnosed with Alzheimer’s disease in 2014 – and her husband Scott Mitchell, 57, recently raised this issue when they called on the government to put more funding into dementia care, and warned that families faced crippling care costs of around £100,000.
As one in six people over the age of 80 suffer with dementia, it makes sense to plan ahead. Here’s everything you need to know…
HOW TO PROTECT YOUR FAMILY FINANCIALLY
It may feel upsetting to discuss your parents getting old and needing your help, but a little forethought can save a lot of trouble. “We should all look to put a Lasting Power of Attorney in place when we write our will,” says Zoe Bailey, Director of Financial Planning at Tilney, a financial planning firm. In fact, only 1 per cent of the population has an LPA – a legal document where someone nominates a trusted friend or relative to look after their affairs if they lose their mental capacity.
KNOW THAT A JOINT ACCOUNT WON’T DO
You may think that having a joint account with your parent would be easier and do the same as an LPA – but it doesn’t. That’s because as soon as one half of a couple has diminished capacity, the bank can shut down accounts and freeze assets.
START TALKING EARLY
“It isn’t just for elderly people – anyone, regardless of age, could lose capacity if they were involved in an accident or develop an illness,” says Zoe. “Without an LPA, dealing with their finances and property can prove very difficult. The document protects a loved one’s best interests while also helping manage their assets. Consider an LPA while your parents have the mental capacity to decide what they want it to cover.”
James Antoniou, Head of Wills at Co-op Legal Services, advises explaining the benefits to your parents. He says, “The ultimate decision to put an LPA in place is up to the parent.”
SORT THE PAPERWORK
“You can do it yourself by downloading the documents from the Gov.uk website, or instruct a professional”, says James. “It can be complicated, so a professional LPA service offers the peace of mind that it is being prepared correctly and creates a record that the donor (the person asking to appoint someone to look
after their affairs) has taken independent advice.”
REGISTER IT
Once complete, register your LPA with the Office of the Public Guardian (OPG), or the Office of Care and Protection in Ireland. It should take 8-10 weeks to be validated. “Get certified copies of the original form so that your solicitor can use it for proof when needed,” says Zoe. If you do it yourself, it costs £82 in England and Wales, and £77 in Scotland. If you want to have someone else do it for you, get a quote. “The cost of a professional service varies from a few hundred pounds to over £1,000”, says James.
WHAT TO DO IF IT’S ALREADY TOO LATE
“If your loved one is unable to look after their affairs and did not set up an LPA in advance, carers need to apply to the Court of Protection for a Deputyship Order”, says James. “Unfortunately, it can take several months and there is no guarantee that you will be appointed.” Zoe recommends getting legal and financial advice and explains that “if nobody has been chosen to speak on their behalf, an independent mental capacity advocate (IMCA) will be chosen by NHS workers to protect their rights. This person might not be someone who your parents would have chosen themselves, but they will be responsible for acting in their best interests.”
GET HELP FUNDING THEIR CARE
As highlighted recently by Barbara Windsor, many people affected by dementia face catastrophic costs. “If you have an LPA, then you’ll be able to sell the home on behalf of your parents, provided there are no restrictions,” says Zoe. But if they aren’t a homeowner, there are lots of options. Zoe adds, “In some cases, the NHS may fully fund care. If they don’t qualify for NHS support, the local authority may fund their care, but the level of financial support offered is determined by your parents’ financial assets; if it is over £23,250, then they will not be eligible for support.”
James adds, “It’s not the legal responsibility of the children to pay for the cost of their parents’ care. There is also plenty of advice on Gov.uk/ power-of-attorney and Age UK support families facing these difficult circumstances.”