The second in the series about ageing without children deals with some of the financial aspects of ageing without children.
There has been a lot of news coverage over the last few years about the cost of care/nursing homes and the impact this has on any legacy. The following figures are a couple of years out of date, so the cost is even scarier than these figures suggest.
The average cost of care homes is approximately (@) £540 and with nursing about @ £750 per week; so basic care costs @ £28,000 whilst nursing costs @ £39,000 per year. At these rates it is not going to take very long for your money to be eaten up, especially as we live longer nowadays.
Again these are concerns for people with children as well as people who are not. If you read the first in this series, I mentioned Nicci’s grandmother. After Nicci’s mother died her step-father, Ron, became Grannie’s Power of Attorney. It was only after Ron’s death that Nicci became involved in her grandmother’s finances. What she discovered horrified her. The bank balance had dwindled from £150k when Nicci’s mum died in 1993 to less than £3k in 2000 all due to care costs. This was due to care costs and not criminal activity on Ron’s part.
“Have a well-thought financial plan that is not dependent upon correctly guessing what will happen in the future.” Barry Ritholtz
Who’s going to look after my finances when I’m no longer able to
Dementia can hit anyone at any time. Although people who are parents may be alright now at some point their children may have to look after the finances. However, the legalities must be put in place before the problems start and we never know when that is going to be. In addition, there is always the worry that the children may not be physical or emotionally able to take on the responsibilities involved. Closely followed by can that child be trusted with the money? Are they any good with theirs?
That’s the problem for parents and equally for us. We all need to do the same planning for our old age the difference is we know we have to.
Quick overview of LPAs/EPAs
The bottom line is that everyone, people with children or not, should have an Lasting Power of Attorney (LPA). There are some issues with this though even though you can have two different LPA’s one for Finance and Property and one for Health and Care. This is important as the Enduring Power of Attorney that preceded the LPA’s is now governed by the same laws.
- Changes in UK law mean that a person granted an LPA can no longer delegate any of their duties to experts. You used to be able to with the EPA. This means that someone who is not a financial expert cannot ask a financial expert to do the work for them. Better choose who you give your LPA to carefully!
- The flips side is that new LPAs can specify different people to be responsible for different aspect of care. Therefore, a child can be responsible for day to day care etc… with a solicitor or IFA responsible for the more complex financial issues.
- However, LPA’s cannot be amended as the laws change.
All of this means that if you had the EPA in place before the “no-delegation” law was introduced, and responsibilities now need to be split, a new LPA, or two, is required. This is fine when the person the EPA is designed to protect is still compos mentis enough to have the LPA(s) written. If this is not the case, then they are stuffed. The person named in the EPA is responsible for EVERYTHING and is breaking the law if they ask an expert to help them execute their duties. I know that people in vulnerable positions need to be protected: however, this is not working in the best interests of everyone involved. Click here to read more about LPA’s.
DISCLAIMER:
This information does not constitute financial advice. It is provided here for reference purposed only. The information was correct at the time of writing and is based on the current situation in the UK. You can find more information on the “End of Life Planning Sheet” created by ??? and shared on this website with her permission.
Parents can be ostriches
We know people with children who have not even written a Will. They hate the idea of thinking seriously about planning for their death. Their situation is complicated as there are four children from two different marriages. THEY NEED A WILL and yet they refuse to even talk about it. Their head is buried deep in the sand. “If I don’t think about it nothing bad will happen”.
In this respect people ageing without children actually have the advantage. We KNOW that we must consider the future. As we Create a New, Beautiful and Courageous Existence we have the opportunity to make our twilight years as beautiful, and stress free, as possible.
If we are lucky and done the planning well we may even have some money left at the end. In the next blog I’ll look at who, what or where to leave the money as we have no children to leave it to.
Practice makes perfect
It’s all well and good writing about things in theory: however, we need to start applying what we learn. Have you thought about what you want to happen to you in old age? Do you have an EPA/LPAs or equivalent?
Be kind to yourself …
In CANBACE friendship!
If anything I have written resonates I’d love to hear from you in the comments. I appreciate that this can be a difficult subject to speak openly about. If you don’t want me to publish your comment on the website, please let me know. I will keep your words private.
Leave a Reply