Dementia Tax

The election campaign has made the public more aware of this terrible unfairness, and the realisation that families up and down the country are being forced to sell their homes and part with a lifetime of savings to pay for essential care.

The public outcry, demonstrated at the ballot box, highlighted the strength of feeling and it is likely that over time more sensible and fair policies will be adopted. The problem however exists now, yet there are simple steps that every family should consider, to protect protect themselves and their lifetime savings.

First and foremost making a Will, while you still have full mental capacity is fundamental to expressing your wishes and making sure they are carried out. Secondly, granting power of attorney which gives someone you trust the power to act on your behalf in the event your mental capacity is diminished can save valuable time and a lot of anxiety and stress.

In terms of managing care needs, it is important for the family to discuss and plan ahead for such eventualities. It is equally important to look at lifestyle choices and take steps to mitigate as far as possible the on set of Dementia. The book "How not to die" published in 2016 by Dr Michael Gregor and Gene Stone is well worth a read.

In terms of providing resource to meet care costs, the family has choices, to meet the cost from their own resources, this might involve trusts but often all that is required is a review of current assets and investments. There are inheritance tax free income funds offering attractive secure yields, which could help preserve family capital through the provision of a much higher level of income than from a bank deposit account. Also it may be possible to insure the risk, the insurance market is developing policies that will insure against the cost of care for the elderly. Another possibility is the equity release scheme plans, that use your home as collateral to free up a capital sum now. However these type of arrangements need careful scrutiny and may work well while interest rates remain low but can very quickly diminish the residual value of your home that passes to your family on your death, this type of option should really be one of last resort.

The point is that until legislation catches up with the problems our ageing society is creating it is up to individual families to protect themselves. The best way to do this is to confront the potential problem before it becomes a reality. There are simple basic steps you can take now to help manage the situation, our professional team can help you understand those choices and make the right decisions for you and your family.

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