Dementia—What legal and financial planning should I consider?
First thing to say is I’m not qualified as a financial planner, but I know the sort of things that they might say to you if they were asked. And you should ask them!
In the UK where most of the care provided by the NHS is free (teeth, specs, and parking at the hospital come to mind, along with prescription charges) you may be surprised to know that a lot of the care that people with dementia receive is means tested. There are many accountants and lawyers who can give advice about putting your family wealth into a trust so that the tax man can’t get hold of it, but these are things to think about long before dementia strikes. If you are seen as getting rid of money so you don’t have to pay for your own care, it’s likely that you’ll be held responsible, or the person you gave the money will be held responsible for your care costs. You see, dementia mainly happens when people are old, and if you try to conceal your wealth at a time close to diagnosis, the authorities take a dim view of that. They get the money in the end.
The theory is that you must pay for your own care, which still comes as a surprise to many families who assumed that they would inherit the wealth that their parents had amassed in their lifetime. Newspaper headlines talk about people having to “lose their home” to pay for a care home. Rather than them losing their home, you could say that they are swapping their home. The house/home they bought is sold to pay for the house/home that they are now living in. In fact, the people who are “losing” is anyone who thought they’d inherit the property. Being in a care home sounds expensive, but considering that the resident is getting full board, all laundry done including clothes, and 24-hour help, it’s not a surprising amount to have to pay. Many of the benefits that are available for older people being cared for at home which are not means tested never get claimed. Any carer organisation or organisation for older people can help you find out what there is, or look for an online benefits calculator. Google is your friend.
“Deciding what you can legally do with your money is important, but you also want to think about what you want to have done for you, yourself. If you live to be over 90 you have about a 50% chance of having dementia and in that case, there may be decisions in your life that you no longer have the capacity to make. ”
Apart from money, and talking to a wealth adviser, accountant, or financial planner, you might want to consider talking to a solicitor, especially one who is qualified to advise older people. Their speciality includes estate planning. Deciding what you can legally do with your money is important, but you also want to think about what you want to have done for you, yourself. If you live to be over 90 you have about a 50% chance of having dementia and in that case, there may be decisions in your life that you no longer have the capacity to make. Granting power of attorney to someone, either for your welfare decisions or your finance decisions, or both is a great way of making sure that your wishes are respected as much as possible. Of course, the attorneys have to work within the law, so requesting euthanasia is not allowed. You would be surprised at the number of people who say to me that if they had dementia they’d want to be shot. At the very least you can make sure via your attorney that you are not kept alive with a poor quality of life, with medical interventions that you would have refused if you had the capacity to express an opinion. Solicitors are not just about wills and what happens to your things after death. They can help you construct documents that lay out your wishes for yourself. Make sure your family or friends have some idea of what your wishes would be. We don’t talk about this enough.
So the three hints
Think about how all the care you might need is to be paid for, and if you want, advise anyone with “expectations” that this might eat into their inheritance
Talk to professional advisers about the financial and welfare decisions that might be needed, and how to manage that with a power of attorney
Have a great time and don’t worry about a thing, but keep an eye out for anyone else in your life (parent, old friend, brother or sister) who might rely on you later, and make sure that they don’t end up causing you unnecessary grief because they failed to plan for themselves and the burden fell on you.
