Are you prepared to live to 100? Wednesday, March 16, 2016
As one-in-three babies born today can expect to live to this milestone age, it seems this is something more of us need to start planning for. The number of centenarians is set to rise to almost 500,000 by 2050 according to the Office for National Statistics. Will you be one of them and, if so, have you made plans to look after your finances, your family and your health?
Here is a checklist of the five essential considerations for your later years:
Retirement finances
You could easily find yourself having 30 or 40 years of "old age" following retirement, so it is vital to plan how much income and capital you will need to fund your lifestyle and future plans. You may want to help family members who are struggling financially or put something aside for your grandchildren.
Using your inheritance tax allowances wisely is crucial. You have a yearly personal allowance for tax free gifts but some larger gifts will only be tax exempt if you survive for seven years. Take legal advice to make sure you have planned properly for retirement and your relatives do not face a heavy inheritance tax bill when you are gone.
Power of attorney
By making a lasting power of attorney you can appoint a loved one to make decisions for you if you became mentally incapable in the future.
A lasting power of attorney will cover health and welfare decisions such as where you live, who can visit you and what medical treatment you receive, as well as financial affairs such as selling your house, paying your bills and managing your bank account.
Without a lasting power of attorney in place, your family will have no option but to apply to the Court of Protection to decide who should make these important decisions for you. This procedure is lengthy and expensive, costing approximately £2,000 initially and the court may not appoint the person of your choice.
Paying for care
Although we are living longer, our bodies are still deteriorating physically and mentally, meaning that more of us will require professional care in our later years.
Your priority might be to protect your home from being used to pay your care fees so that you can pass it on to your children. If this is the case, you may wish to investigate the use of a trust in your will.
Alternatively, your main concern might be to ensure you can afford to live in the care home of your choice without being reliant on your children for financial help. Either way, you will need to plan your finances and make sure they are arranged in a tax efficient way.
End of life decisions
It can be important to let people know your wishes and feelings about issues such as hospital treatment, blood transfusions and the receipt or donation of organs and other tissue.
If you want to refuse certain kinds of medical treatment in the future, you can make a legally binding advance decision. This is a specific document, sometimes called a living will, or it may be set out in a lasting power of attorney.
You may also wish to specify where you would like to die; at home, in a hospice or in hospital. The only thing you cannot do legally is ask for your life to be ended.
Wills
The purpose of a will is to clarify your intentions to the people you leave behind. Without a will you could leave problems for your family to sort out after you die. People living longer are more likely to remarry with second or even third families to provide for, and disputes can arise in the absence of clear instructions.
There may be a charitable cause that is close to your heart, but will your family feel the same way if you leave it for them to decide?
Your will not only sets out your wishes for who will inherit your property and finances, but you can also specify your funeral arrangements, who will look after minor children, what will happen to pets and who will make sure all your wishes are carried out.
If you do not make a will, the intestacy rules will determine who receives your assets and, in some cases, everything could pass to the treasury. However, the intestacy rules do not cover guardians for children, funeral wishes or arrangements for pets and this is where disputes can arise.
Summary
It is important to plan ahead to make the financial, legal and practical consequences of old age, illness and death much easier for you and your family to deal with. Addressing these issues at an early stage will give you the peace of mind that you can enjoy your life, right up to your 100th birthday and beyond.
If you would like help with your future plans, please contact us for more information about lifetime gifts, advance decisions, lasting powers of attorney, wills and trusts.
London office or email [email protected],
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
