Ensuring retirement doesn't cost the earth
Dreams of a relaxed retirement, following a lifetime of careful saving can be quickly shattered if assets have not been adequately protected against the possible need for full-time care during that retirement.
If someone requires care, but still owns assets in excess of levels set by their local authority, there may be no additional help with funding – meaning care costs can quickly start to escalate. The position may be worse still for a widow or widower, who is left owning considerable assets such as a house or financial holdings.
There are ways, of course, to plan for these outcomes and to ensure you are protected, should you need to go into care. Local authorities are, however sensitive to plans made only shortly before a person requires care. Planning for these eventualities has to be done in good time and whilst the people involved are in good health.
A good place to start is by setting up a Lasting Power of Attorney (LPA), as you may not be physically or mentally in a position to handle these matters. An LPA enables a trusted person – perhaps a family member, or trusted friend – to act on your behalf.
The appointed attorney can then take steps to protect your financial assets. Creating a Personal Welfare LPA can also be considered in case you lose capacity and need someone to ensure you receive the care you deserve. This person can talk to the local authority on your behalf and make sure that the right level of care is being provided for your needs, and can also intervene to make sure funding is correctly assessed.
Once you’ve established who will be able to act for you, you can then start to make provision for your financial affairs. It’s very important that this is something that is done while you are fit and healthy, rather than a reactive response to an illness or change in circumstances.
Property can obviously make up a large part of your personal finance assets, and it’s important to protect these for future family generations. One way to do this is to put your property into trust for your children or other dependents.
As the person establishing the trust, you state how the trust’s property and income should be used. Trustees of your choice (you will probably want to be a trustee yourself) can be appointed and must adhere to the instructions set out by you in the trust deed.
There are varying types of trusts that can protect property and financial assets for your beneficiaries, so it’s important to seek clear and practical advice about the most suitable one for your requirements.
Finally, it’s also important to consider other care options that might be appropriate for your future circumstances. It could be possible, for example, for you to receive care in your own home – again, this is something that your appointed attorney can take responsibility for, should your physical or mental capacity deteriorate.
You might feel that all of this is either a long way off, or something you’d prefer not to think about, but given the ageing population, it’s more important than ever that assets are protected well in advance and whilst you are able to do so.
Planning now could well be the key to a relaxed, fuss-free and enjoyable retirement.
Jeanette Berry, solicitor, Brabners Chaffe Street.
