As we get older, it’s important that we start to think about how to best manage our aged care finance matters. Things like paying for carers, maximising pension entitlements and affording a nursing home may need to be properly thought out.
Unfortunately, it is all too common to make mistakes and oversights that can cost you a lot of money (and lost time!) in the long-run. An aged care finance planner can help prevent you from making costly mistakes and ensure that you make the most of your monetary situation from the get-go.
Here are the 5 most common mistakes to avoid:
1. Selling the family home
Selling the family home might seem like a good idea, but it can actually be the biggest mistake that families make. While you may want to do so in order to pay for the accommodation bond, it can wreak havoc on the person’s ability to get a pension. This is because social security services consider funds in the bank account left over from selling the home to be an asset. This means the person’s pension may be lowered or even completely lost.
To avoid this, contact your social security service or aged care finance advisor for more information.
2. Not having a Will (or having an outdated one)
Before the person is ready to enter a nursing home it is crucial to have their Will put in place. Too often do families wait too late, or rely upon an outdated Will. This can cause a lot of distress to the family. It is important to assess the state of the Will and ensure that it is appropriately created or updated before the person enters a nursing home. An aged care finance advisor may be able to help further.
3. Not getting a power of attorney
It’s essential not to wait until it’s too late and ensure that you register a power of attorney (POA) for your relative before they enter a nursing home. If the relative loses their mental capacity (whether by Alzheimer’s, stroke or the like) and they don’t have a POA, the family could lose their ability to take care of their monetary affairs. This is a big error that can easily be avoided.
4. Not seeking aged care finance advice
Unless you have few or no assets, getting some wealth planning advice can be incredibly useful and can save you a lot of money and hassle. If you or the relative you are helping owns a property, has a pension or superannuation income, annuities, shares, investments, large amounts of cash or trusts, it is strongly encouraged to seek monetary advice. Entering a nursing home can affect things like tax and pensions, so it’s important to get proper advice.
5. Not negotiating
Many nursing homes can charge upwards of $500,000 for a bond. While this will be refunded after death, it is still an incredibly large aged care finance sum to pay. As a result of this large figure, you’ll be surprised at how willing facilities are to negotiate some of the fees with you. It is important to make the most of this opportunity by negotiating. A wealth advisor can help you determine which fees can be lowered or even waived entirely.
It is important to make the best out of your aged care finance situation. Seeking advice from a professional wealth planner can save you a lot of hassle and lost expenses down the track. Make sure to avoid these common mistakes by planning ahead and getting proper advice.