Wealth Connexion Explains the Importance of Planning Your Estate Before You Go into Aged Care.
The decision to enter aged care is often a sudden one, triggered by an injury or medical incident. As a result, the choices you make regarding aged care are made quickly, so having your estate in order beforehand is important. Before you consult aged care financial advisors about your estate, there are a few factors specific to this transition that you should understand.
Homeowner Status
A key step in planning for aged care is deciding whether to sell your home. If you sell your house, you’ll have more money upfront to pay for aged care and will have a higher asset limit on your pension. The obvious downside to this is that you will no longer be able to list your former home in your estate. If you keep your home, you will have a lower asset limit for the first two years after moving out, but your home will not count as an asset. After the first two years, however, your limit will increase, and your home will now count as an asset.
Protected Persons
If your home is inhabited by a protected person, your house will continue to be exempt from your pension’s asset limit.
Someone is considered a protected person if they are:
- A partner.
- A dependent child.
- A carer who has been living in the house for two years and is eligible for Centrelink benefits.
- A relative who has been living in the house for five years and is eligible for Centrelink benefits.
If you are unsure if a person who will be living in your home is a protected person, talk to aged care financial advisors, such as those at Wealth Connexion.
Power of Attorney
With over half of the people living in residential aged care having dementia, it’s a possibility that the reason you’ll move into aged care is because of this disease. Since you will not be able to make informed decisions about your estate if you develop dementia, giving someone power of attorney is a responsible choice. Consulting with aged care financial advisors will allow you to pick the best person for this role.
Superannuation Payments
A common mistake made when drafting a will is assuming that your super benefits are automatically included in your estate. Unlike your possessions, your super is owned by the trustee of your fund, and it is up to them to decide how your payment will be distributed after you pass away. To make sure your super benefits go to the people you want them to, talk to aged care financial advisors.
Centrelink or Veterans’ Affairs Payments
Moving to aged care can impact the amount of money you receive from Centrelink or Veterans’ Affairs. Depending on if your assets or income changes, your payments increase or decrease. Consulting aged care financial advisors can help you make the best decisions about your assets in relation to benefits.
Wealth Connexion’s team of Brisbane-based financial planners can help you with your estate planning and provide practical solutions to help you with your future wealth. Contact us at 07 3891 5666 or email us at admin@wealthconnexion.com.au.
