In this episode, Gail Hall looks at how we can all prepare for older age.
It can be a costly business getting old if you are in declining health. No government for the last decade has had the appetite for getting to grips with the mounting cost of social care, so the cost of paying for your care could be down to you. Gail discusses the options that are available to you, including the little-known ‘attendance allowance’ benefit.
There are lots of steps that you can take now to make things easier for you and your family. This is especially true if you are not married and you live with your partner. In some cases, your house may be sold to pay for your care fees, and your partner could end up homeless.
Transcript
Paul
I’m Paul Harvey and welcome to the Warners Solicitors series of podcasts. I’m delighted to introduce Gail Hall of Warners for this podcast, and we’re going to be discussing preparing for older age, so welcome, Gail could you tell us first of all what you do with Warners.
Gail
Thank you, Paul. I’m a partner in the private client team here at Warners, I specialise in helping people draft their Wills, Lasting Powers of Attorney, and I deal with the very sad occasions when family have lost loved ones. I help with probate, and I am also a deputy for some people who have lost mental capacity and do not have any family members who can help them manage their affairs.
Paul
When we’re talking about older age, we are living longer, aren’t we year on year? I mean, I believe that you know from information that more than half a million people are aged 19 or over in the UK. So what about kids that are born today? How long are they going to live?
Gail
Well, the office of National Statistics estimates that one in three babies born in Britain today will live to be over 100 and there are more than half a million people in this country who are aged 90 and over in the UK. I don’t know if you know anyone who has become a centenarian who might have received a birthday card from the Queen. In 2017 Her Majesty sent out more than 10,000 birthday cards and had to have a team of seven people helping her administer the service.
Paul
Right well, that says it all that sums it up very nicely. So, what has all this got to do with you or me?
Gail
You never know. You might be one of those centenarians, so I’m really encouraging you and anyone who’s listening to this podcast to be prepared that for extra time. It can be a very expensive business getting old if you are in declining health. No government for the last decade has had the appetite for getting to grips with the mounting cost of social care. I read or saw it on the news the other evening after the Queen’s speech that the Kings fund which is a charity that looks into funding of care and health and welfare that adult social care is costing the country £23.3 billion per annum. As was expected, nothing substantial was announced in the Queen’s speech to help people with social care for elderly people.
If you have savings or money in your bank account of more than £ £23,250 and/or own your own house, you should assume that you will have to fund your own care whether you stay in your own home or you go into residential care you are metaphorically on your own sunshine.
We have a lot of clients who come to see us and a lot of telephone calls asking about whether people are going to have to sell their house if they go into residential care to fund their care fees. There is a note of optimism, I guess, if your spouse is over 65 years of age and/or you have a child, either adult or young, who is disabled living in the property, it will not have to be sold, but you will still have to pay for your own care
There are various options open to you, so don’t panic. You could look at equity release or a deferred payment agreement through the local authority, or another family member could help, but none of these are particularly palatable. What you want to happen in an ideal world, and please do take specialist advice on this before you start to panic, is to ask your local authority to carry out a care needs assessment. It might take a few months to arrange but persevere with asking for help from your local council and then ask for a financial assessment.
Please don’t think you can give away your assets without again discussing this with a qualified solicitor or advisor, as there are serious pitfalls. If you do this, it can have drastic consequences, mostly centring around your finances and inheritance tax. Finally, on this point, if you are struggling with health and care needs, please think about applying for the only non-means-tested benefit available, called the attendance allowance, because you could be eligible for either a low or high rate of payment.
Paul
So, there’s a lot of preparation to be made for my old age. Gail, now what should I be preparing for in case things don’t work out for me health-wise?
Gail
Well, anybody at Warners, anyone in our team here, could help you, but first of all, come and see us and make sure that you have all your affairs, including legal matters, neat and tidy. An up to date Will and a Lasting Power of Attorney are key. I don’t have time to cover LPAs here, but please listen to my colleague David Cooper’s podcast on them.
If you know you have a big inheritance tax bill looming on your death please take advice as to how you could possibly mitigate it if that is what you want to do. Even if you think you don’t have anything and you do not need a Will if you were to die intestate, the people you want to inherit might not get a look in with what you do have with your estate passing to a strange family under what is called the rules of intestacy.
Wills are quite specialist, and you do really need to take some advice on that. Also, make sure that your Will actually says what you want it to say, and if possible, don’t let your family in for a nasty shock when you’ve died. What I’m really trying to get across here is that communication is the key. Firstly, come and talk to your solicitor. Secondly, talk to family members.
You should really review your Will every three to five years or sooner if your family circumstances change, i.e. if the three Ds, divorce debt, or death unexpectedly hits one of your beneficiaries.
If you’ve had a falling out with one of your children, sadly that does happen, and you are so mad with them that you want to remove them from your Will please go and talk to your solicitor before you do anything precipitous. They can set out the potential consequences such as claims being brought against your estate and equally terrible, family members falling out for generations.
You might even have life policies tucked away, don’t forget about them. You may have taken out a policy many many years before and very sensibly have it written into trust so it does not form part of your estate for inheritance tax, but then you forget to review the named beneficiaries of the policy. Circumstances might have changed, and the wrong person could be receiving a huge pay-out on your death. For instance, someone could change their Will to write out a child with whom they have recently had a disagreement, but they might have clean forgotten that years before they took out a life policy with that estranged child named as a beneficiary of the policy.
We live with more complex blended families nowadays, so please take advice as to whom you should be remembered in your Will. For instance, should you leave money to step-grandchildren when you are leaving money to your own grandchildren if you are just as close to the steps as to the blood grandchildren?
Paul
So as we are coming out of COVID and coming out of the pandemic, does this change any of the dynamics that you’ve just been talking about?
Gail
Yes, it can make things very difficult in that people haven’t had a chance to review their Wills. The best thing to do is to telephone us and make an appointment. We have been doing Zoom calls and remote meetings, and people can come into the office now to see us as long as they have an appointment.
Also, you need to think about whether you’re cohabiting with somebody and you haven’t got around to getting married. For instance, a lot of people have found that they say well, yes, we’ve been meaning to get married, but they never got around to it. We’ve had this just recently where someone has passed away without being married and without perhaps making adequate provision for their partner. It might be that some people actually make the conscious decision not to get married if they both have adult children and grandchildren, and they say it would all be too difficult. Under those circumstances, you need to think very carefully about what happens to the survivor on the first death if the survivor does not have any legal interest in the property you’ve been sharing. If you are leaving everything, including your property, to your children or grandchildren, you could leave your bereaved partner potentially homeless. Just a note of caution here, you do have to be careful about inheritance tax consequences if you leave them what is called a ‘life interest’ in your property, so please, again, take proper legal advice. If you have a complex family situation, don’t rely on a DIY Will, in such circumstances and don’t just leave a little note saying that you want your children to be nice to your partner if you die first. Please also think if you would want to ensure that your partner can stay in your house if you were to go into residential care. Maybe the house has to be sold to pay for your care fees, but have a conversation with them about what you want and what is financially feasible.
Paul
We are neatly moving on to how to make provision for my partner as I’m a lot older than them they must have a roof over their head. What should I do?
Gail
You should really speak to them about what they would want. You need to make an appointment to speak to a solicitor and explain what you want to happen. Say you would want your partner to have a roof over their head for the rest of their life you do not want them to be turned out by your children, but ultimately you want the value of your property to pass to your children from your first marriage. The solicitor can make some suggestions. The most usual one would be to say that you have a new Will drawn up, and you leave what is called a ‘life interest trust’ to the survivor, which would enable them to stay in the house and then if the house is sold an alternative residence can be bought for them, so that’s not a problem.
Paul
As I mentioned before about coming out COVID, you will still deal with people remotely. A mix of virtual meetings as well as real meetings with clients can both ways of dealing with people be as effective as each other?
In the absence of meeting someone face to face, a virtual meeting is alright. I think, funnily enough, it is far better to be able to meet people face to face and to sit in the same room even if it has to be two metres or more apart from them. I think for initial meetings, Zoom and Teams can be quite useful, but I think at some point if instructions are complex, it’s very, very helpful to meet face to face nothing can substitute meeting face to face.
I guess that’s got a lot to do with trust and assurance and reassurance hasn’t it in terms of how you can make people feel at ease discussing very emotional important items?
Gail
Ohh yes, and if you have husband and wife sitting in front of you, it’s much easier to pick up on differences of opinion. Not all couples agree with how they want their estates dealt with, and it’s very easy for a solicitor to pick up any awkwardness, difficulties or disagreements that might be underlying under the surface. Hopefully, it will be much easier to help them and come up with alternatives by the end of the meeting. Hopefully, they will realise that we can help them and that there are solutions to issues. We see a lot of people who get very, very worried about this kind of thing coming to see a solicitor, but you know we’re not frightening, and we do have options and solutions for difficult situations.
Paul
I can imagine that clients will feel much more at ease once they made that approach face to face with you in the office, and it’s probably much more satisfying for the client to achieve that?
Gail
Yes, for all the wonders of modern technology, people do still like that personal touch.
Paul
Gail, can I just pick you up again on this aspect of extra time and how you can almost make this comparison between extra time in a football match in extra time in terms of living longer and the implications of that?
Gail
Absolutely, so extra time in a football match where there’s everything to play for, and there’s a premium on fitness and being able to stay the course. Many of us nowadays are lucky enough to be living longer, and we have that extra time in our lives, but living longer is not necessarily a blessing unless it is living better for longer. I would like to think that we can help you prepare for being alive for very much longer.
Some people who we do see old and young alike are literally worrying themselves sick about having to make a Will or a Power of Attorney or they might be worried about adult children going through difficulties themselves such as divorce and wondering what might happen to their children’s future inheritance. Once they have plucked up the courage to come and see us, they often feel so much better. If you are one of those people, or even if you are an organised type and not fearful of the extra time that might or might not be ahead of you, our whole team will do our very best to help and reassure you as far as we can.
Paul
A nice reassuring message there, Gail so if people want to make contact with you and want more information, how can they do that?
Gail
They are welcome to telephone me on my direct line, 01732 375384 or if they like to use email it’s [email protected] but if I’m not available any of our team here would be delighted to help.
Paul
Thank you, Gail Hall, Partner in the private client team at Warners. Don’t forget to check out the other podcasts in this series with Warners Solicitors, which you can find on the Warners website.