The sad decision children may have to face
TRICIA PHILLIPS considers what happens when our parents’ health starts to decline
IT’S ONE of the most difficult times in family life – when grown-up children see their parents’ health declining. As well as the heartache it can bring, there’s also the agony of switching roles, as children need to become, in effect, their mum and dad’s guardians.
This is never an easy subject to broach – but sadly the bullet has to be bitten, especially nowadays, as dementia cases rise affecting the ability of old people to carry on managing on their finances. Around 850,000 people have dementia in the UK, one in six of the over 80s, and this is expected to hit 1.6million by 2040.
So it’s best to be ready to manage your parents finances in later life. We’ve teamed up with Carolyn Matravers to help you. Carolyn is a chartered financial planner and Society of Later Life Advisers accredited adviser at financial experts Old Mill.
Her six-step plan – GETSET – is just what you need after gently persuading your parents that it’s always best to be prepared.
GETTING THEIR DUCKS IN A ROW
ASK them exactly what assets they have and where. This will include bank accounts, investments, savings and pensions as well as material assets such as jewellery or collections.
If your mum and dad own property then it’s helpful to have all the information relating to that in one place, along with utilities information, and things like the TV licence and insurance documents. Having this information readily accessible will make it easier if you need to step in and support.
ESTATE PLANNING
HAVING a Lasting Power of Attorney (LPA) for both property and financial affairs, and also health and welfare, is vital. An LPA allows someone, while they still have full mental capacity, to nominate a trusted friend or relative to make decisions on their behalf in cases of lost capacity.
LPAs give people peace of mind that they will not have to make complex choices about their financial and health needs if mental capacity is lost. Or if they simply decide they no longer wish to make judgment calls themselves – but have them made by someone they trust.
If your parents do decide to make you an attorney, make sure you understand what your responsibilities will be, and that the documentation is set up correctly with a solicitor.
You can register an LPA with the Office of the Public Guardian for £82 per document required – one for property and financial affairs and another for health and welfare – is vital (visit gov.uk/power-ofattorney). Or you can use a lawyer which will cost more.
Ensure your parents have an up-to-date will, and check the executors are alive, willing to act and understand their responsibilities.
TITLE AND TIMELINE
MAKE sure you know where the title deeds of any property your parents own are held. This is key if an asset (property or land) needs to be sold quickly in a crisis.
There could be financial gifts your parents have made over the years – some possibly forgotten. Working through a timeline and documenting what gifts were made to whom, and when, will help when it comes to managing tax aspects of your parents’ estate.
SIMPLIFYING THEIR ASSETS
WHEN you have a clear understanding of all your parents’ assets it’s worth considering whether they could reduce the number of bank and savings accounts they have – while being mindful of the protection levels (£85,000 per person, per bank, up to
It’s important to prepare for all eventualities and make sure your wishes
are clearly explained £170,000 for joint accounts) offered through the Financial Services Compensation Scheme. Check investments are held in easily accessible and understandable formats and in line with your parents’ attitude towards risk. As parents age it becomes more important investments are adaptable to suit changing needs, such as funding care.
ESTABLISHING A RELATIONSHIP WITH A TRUSTED ADVISER
YOUR parents may already have an accountant or solicitor – and having a SOLLA accredited (Society of Later Life Advisers) financial planner who can co-ordinate matters could be really helpful, especially when managing things with the wider family.
TALKING
EVEN if you have never discussed your parents’ financial matters as a family – or if you feel uncomfortable talking to them about a declining health – plucking up the courage to have these conversations now will make it easier in the longer term. Make sure you know their wishes should the need for care arise.
■ Do they want to be looked after in their home or would they be happy to move into a supported environment?
What do they want to happen to the house if they can no longer live at home?
And, however difficult it may be, find out what your parents’ wishes are about their funerals. A SunLife Cost of Dying report shows only 1% of people organising a loved one’s funeral knew all their wishes. And 19% didn’t know any at all. So make sure you talk about it before it is too late.