Life expectancy is on a steep upwards curve. Despite advances in medicine meaning we are living longer and healthier lives, our health is not something we can always control. In the UK, 850,000 people are currently living with dementia and is projected to rise to 1.6 million by 20401. It’s unlikely that there are many reading this who haven’t been affected by dementia in some way.
According to the Alzheimer’s Society, it is estimated 1 in 14 people over the age of 65 are affected by dementia, and the likelihood of developing the illness increases with age.
Dementia is caused by disease of the brain and symptoms include, memory loss or difficulty with thinking, problem solving or language. A diagnosis is obviously devastating for a family emotionally, but the financial impact shouldn’t be underestimated either. For the family, dealing with these situations can be stressful and the biggest support to people with dementia comes from help with basic daily needs such as washing, dressing and eating, rather than medical treatment available under the NHS. They become progressively dependent on what can be expensive personal and social care, with the cost being calculated by the Alzheimer’s Society at £100,000.
You might be surprised to know that as social care is means tested, anyone with assets (including a home) of more than £23,250 is often responsible for meeting these costs themselves. As a result, care needs and costs are spiralling, stretching the resources and finances of families and local authorities alike. Paying for residential care in care homes is expensive. Research from Age UK from 2016/17, estimated the average cost of residential care in London to be £741 per week2. Organising care support in your home might be a cheaper alternative, if appropriate.
It is important people plan not only what should happen in the event of their death but also what should happen in the event they were to lose mental capacity and were no longer able to make key decisions for themselves. A Lasting Power of Attorney enables you to appoint someone you trust (a spouse, partner, family member or close friend), so they can take control of your finances on your behalf, in the event you were to lose mental capacity. If no power of attorney is in place, a spouse, partner or family member will have to apply to the Court of Protection to become a deputy.
This can be a long and costly process. There are two types of Lasting Power of Attorney, one covering health and welfare and the other covering property and financial affairs. You have the option of applying for one or both depending on your needs.
It is also important to have a will in place and to be kept up to date to reflect any changing circumstances. If no will is in place, the estate will be shared out according to the rules of intestacy, which may not follow your wishes.
You could consider organising a file with the key details of your financial affairs, key contacts and other information that could help someone help you. Please make sure your family or attorney knows where to find it.
Holden & Partners are experienced in advising and helping families through difficult times and putting a plan in place to manage their financial affairs. We work with legal specialists who handle wills and lasting power of attorney to help make things a bit easier. Working this way ensures you financial affairs are looked after, and you are prepared for whatever the future brings.
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