Expert Advice

Later Life Planning - Debunking the Myths

Very often people need help with planning for the future and they have lots of questions because of the things our old friend, ‘the man in the pub,’ has suggested to them. We talked to Damian Lines of Rubin Lewis Solicitors to give us some expert advice;  Let us look at some of the myths:

“Attorneys and Executors are the same thing”

An attorney, appointed under a Lasting Power of Attorney (or one of the old Enduring Powers of Attorney, has the power to manage your affairs during your lifetime and even at the stage where you lose the capacity to do so for yourself. However, the power of an attorney to act stops immediately on the death of the person who gave it.

An executor, named by a person’s Will, has the authority to deal with winding up their affairs after death. The roles are separate and just because you have one, does not mean that you do not need the other.

“I don’t need a Lasting Power of Attorney for property and finances – my children can just deal with things for me”

This is quite a common misconception. If you lose the mental capacity to deal with your own affairs, then no-one has any automatic power to do it for you. If there is no power of attorney, then the only option may be asking the Court of Protection for an order appointing someone to manage your affairs.  This can be long-winded and will result in the person appointed being responsible for annual accounts to be provided to the Office of the Public Guardian.

If a power of attorney is made, YOU get to choose who acts for you and whether there are any limits on what they can do. If not, then it is the judge at the Court of Protection.

“I don’t need a Lasting Power of Attorney for health and welfare – my family can make decisions”

It depends. Medical professionals have for decades considered the views of family members when making clinical decisions. However, there is not – and never has been – any absolute right for a family member to make decisions about healthcare or where someone lives. If there is a dispute in the family, who gets the final say?

With a Lasting Power of Attorney for health and welfare, you can choose who can make decisions for you – including decisions to stop any further medical treatment. This is a powerful document, and it is very sensible to get advice.

“I don’t want to pay care fees – can’t I just give my house to my children?”

Lawyer’s answer – it depends. There are several things to consider before giving away what is often your most valuable asset. What if your children die before you, or divorce, or get into serious debt? Your home could be at risk.

In addition, there are rules about deliberately depriving yourself of an asset to avoid care fees, although there are several reasons why you might want to give your property away. Again, the key is getting advice and understanding the consequences.

“I can do what I want with my property as long as I live seven years”

The ‘seven-year rule’ only applies to inheritance tax.  If your estate is below the inheritance tax threshold (£325,000 as at 2024-25) then you need not worry about it. There are extra allowances where you are married, or have been widowed, and in some circumstances where you have children – the rules are too complex to discuss here.

The local authority will need to show that a primary reason for giving away your property was to avoid care fees. However, the longer the time that passes between giving it away and needing care, the more difficult it will be for the local authority to argue that you did it deliberately. Again, the key is getting the right advice as soon as possible.

“I have a child with learning disabilities so I can’t leave anything to them because it will affect their benefits.”

I do a lot of work with Mencap, and for the last decade or so I have presented seminars for them on this very subject. With careful use of trusts (not the sort of thing advertised in the back of the national newspapers) you can ensure that any inheritance for your child, or other vulnerable beneficiary, is not only protected against means-testing for benefits, but also care fees. With careful planning the right sort of trust can be set up to manage any inheritance for their lifetime, all without the state getting access to any of it.

Damian Lines TEP is a solicitor and Managing Partner of Rubin Lewis O’Brien Solicitors, Cwmbran, specialising in Wills, Trusts, Estate Administration, and matters affecting the elder population.

“I believe strongly that the key to successful planning for later life, and for those we leave behind, starts with discussing matters in an open and constructive way. It is important to make sure that you are clear what you want to achieve, and we will work with you to find the best way to achieve your objectives.

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