We look at some of the risks that families face today when NOT having adequate Estate Planning provision.
In April 2009, 86 year-olds, great-grandmother, Betty Figg, was snatched from her home by social workers and police officers armed with a battering ram, against the wishes of her daughter. Betty was suffering from dementia; social services did not agree that it was in Betty’s best interests to be cared for by her daughter, at home, in a specially converted room. You may recall that the media quickly spread pictures and video footage of Betty being taken from the house in her wheelchair with a towel thrown over her head.
Incidents like this can be prevented by creating a health and welfare lasting power of attorney (LPA) and giving it to a family member. Social services are then prevented from making care decisions.
Without an LPA social services can make decisions on behalf of a vulnerable person, if they think they lack mental capacity and believe it is in their best interests. They do not have to follow the wishes of the family and cannot be held liable for their decisions.
Research from NFU Mutual has found that the average cost of a place in a nursing home is £3,000 a month, while residential care costs £2,000 a month. The government has calculated that the average cost of care has risen to £50,000, while one in five people who go into care will end up paying more than £100,000.
The NFU Mutual’s research found that pensioners have sold more than one million homes in order to meet the cost of care, and another two million pensioners have decimated their savings.
And the issue is incredibly widespread, since 1999 one in ten adults has had a parent go into care, 28% of them have had to sell the family home as a result, and 77% said the fees had used up most of their parents’ wealth.
The full cost of care has to be met if the person requiring care has assets of over £23,000. Hope was in sight after the Government promised a fairer capped system would be in place by April 2016. However, we now have to wait until at least the end of this parliament (Thursday 7th May 2020!) after the Government announced it would delay a planned £72,000 lifetime cap, to the dismay of many and their families.
“Putting off the Will-making process is a risky strategy which means that parents are ultimately playing Russian roulette with their child’s future.” warns John Muldoon, partner at Hatfield Daniels LLP. “By postponing the process, they are unwittingly putting their children at risk of court-battles, family disputes and potentially even foster care.”
“If both parents were to die, and no official guardians had been appointed, the children could end up in foster care while the court appoints a guardian of its choosing. In addition, if a parent re-marries without a Will in place, the children are only entitled to an inheritance if their parent’s estate is worth more than £250,000, or if the parent’s spouse has also passed away.”
Another consideration, which is widely forgotten, is the provision of cash gifts to a guardian(s) conditional upon the acceptance of the appointment as a simple thank you.
This then enables the guardian(s) to improve their home to accommodate the children, additionally you could set up a trust fund for the benefit of your kids to provide them with funds which is available to them at certain stages of their lives such as university fees, deposit for their first home, or even money for their own children in the years to come.
“Provision for your children and their guardians is a serious business but actually a simple process to formulate that does not need to cost the earth.” says John Muldoon. “So please contact us, we can discuss your options and advise you on the best way to plan your future”
Colin & Sylvia Jones, Telford
Peter Hill, Solihull
Grant Foden, Telford
J Powell, Shawbirch
Mr & Mrs Shepherd, Telford
Richard Brown, Wolverhampton
Mary & Rob, Telford
Deborah Marks, Telford
P Martin, Cannock
Lucy T, Telford
Ian & Sue Carvell, Telford