If you have older relatives – whether that’s parents, grandparents, or anyone else – then you might be seeing them struggle to organise their wealth.
Whether it’s in setting out their wishes in case they lose capacity and require care, or simply the everyday management of their money, there are some significant hurdles your relatives may be finding difficult to overcome.
Fortunately, there’s plenty of help you can provide to help them manage their finances and plan for care – and it may even give you pause for thought as to your own situation too.
So, discover three ways you can help your older relatives to manage their money and potential care needs.
1. Putting a Lasting Power of Attorney in place
Firstly, you could help your relative to put a Lasting Power of Attorney (LPA) in place.
An LPA is a legal document that allows them to appoint an individual or individuals (known as “attorneys”) to make decisions on their behalf should they lose mental capacity.
For financial matters, the LPA also lets the individual delegate management of money matters to their chosen attorney(s), even if they retain mental capacity.
There are two types of LPA:
1) Financial – This allows the attorney to manage various aspects of your relative’s wealth, including their bank accounts, bills, benefits or pensions, and property.
2) Health and wellbeing – This allows the attorney to make decisions that affect your relative’s health and wellbeing when they cannot. This might include their daily routine (washing, dressing etc.) medical care, moving them into a care home, or life-sustaining treatment.
Having an LPA ensures that there will be someone with your relative’s best interest at heart to make decisions about their money, health and wellbeing. So, you may want to encourage them to put both types in place to offer this protection.
You may also want to impress upon your relative the importance of putting an LPA in place before they need it.
It can sometimes be difficult to predict when someone might lose capacity. Whether it’s down to a single accident, or a prolonged condition such as dementia, your relative could lose their cognitive abilities almost overnight.
If this happens, it can be far more difficult to put an LPA in place. As a result, it’s crucial to consider this before it’s too late.
2. Exploring Advance Care Planning options
Beyond a health and wellbeing LPA, you may also want to consider other similar types of Advance Care Planning (ACP).
In a similar way to an LPA, ACP involves your relative making decisions over their health and wellbeing – particularly over long-term care – ahead of a time when they might not be able to make these choices for themselves.
Two documents your relatives may want to consider putting in place could be:
1) Advance Decision – Your relative can use this to pre-emptively refuse particular medical treatments that go against their personal wishes. This is legally binding and healthcare professionals have to follow it, regardless of what they would consider to be in the “best interest” of your relative.
2) Advance Statement – This allows your relative to lay out their preferences for “softer” decisions. This could include preferences for treatment or certain medications in care, or aspects of their daily routine that they would like to be upheld. An Advance Statement is not legally binding.
These can be difficult decisions to make, which is why it can be so valuable to support your relatives through this process. While it may be emotionally demanding, ACP can allow them to play an active part in their future, and simultaneously relieve you of the burden of having to make these decisions if they’re unable to do so for themselves.
3. Helping them navigate their money in the digital age
Another barrier your older relatives might face is the difficulty of managing money in the digital age.
While technological improvements and the advent of online banking have made checking on your money easier than ever, this may not be the case for older relatives.
According to Age UK figures published in the Guardian, 40% of over-75s don’t use the internet at all, and so struggle or are unable to access digital banking services.
Meanwhile, more than 5,000 bank and building society branches have closed since January 2015, the Evening Standard reports. For older relatives who might struggle with travel due to anxiety or mobility issues, it could be financially constraining for them if their local branch has closed and they’re no longer able to bank in person.
As a result, this may be an area where you can lend a hand. A financial LPA can be useful here, as you can assist with your relatives’ money as soon as it’s registered, even if they still have mental capacity – provided that you have their permission.
Alternatively, you could look at helping your relative to switch to a bank that’s more suitable for their needs. This could either be one that has a local branch nearby that they can go to themselves, or one with better standards of accessibility for vulnerable customers.
Finally, another option could be to help your relatives learn how to use telephone or online banking services. This could help them to retain their independence in managing their money, without having to rely on you entirely or switch to a different bank or building society.
Some financial providers actually offer free online courses to help empower less tech-savvy individuals to use their services.
Check with your older relatives’ bank to see whether they have services available to help them.
Financial planning can help you as a family
Carrying out financial planning as a family can be a useful exercise. By discussing your older relatives’ plans, you’ll fully be able to understand what they have in place already, and their wishes for their future should they ever require care.
Meanwhile, this might also extend to you, your own circumstances, and your children. Having seen how important it can be to plan for these eventualities, you may want to consider putting an LPA in place for yourself, or looking at ACP options ahead of time to play an active part in your future care needs.
Working with an adviser can be hugely beneficial if you’d like help organising your finances for the future. Please speak to your financial planner to find out more.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.