This morning I spoke to a clued-up lady called Barbara about her relationship with money. She summed it up as a “cautious” one, where understanding the risks and trusting the right professionals is absolutely essential. As a result, Barbara is quite a confident investor. But there is one area just outside her comfort zone that worries her: how will she manage her money if old age slows down her mental faculties?
If age-related illnesses like dementia creep onto the scene, once-simple tasks can become alien and remembering deadlines can be almost impossible. Thankfully, technology can take on some of the responsibility.
But what about the tasks that can’t be automated? Tasks that require actual humans to make considered decisions. Who should you turn to for help?
When it comes to your investments – and any other money tasks that aren’t as cut-and-dry as buying milk and eggs – you can’t rely on routines and gadgets. Instead, you need a person you can trust to make the right decisions for you. There are a number of options:
Lasting power of attorney (LPA) is a long-term arrangement that lets a person of your choice make decisions you’re unable to. You can choose a carer or family member, or someone else with more appropriate skills for the tasks you need them for.
You can give them general powers, so they can make decisions on most things. Or you can give them specific powers, so they can only make decisions about your property, investments, or whatever else you think they’ll be useful for. If it’s just your money you want them to influence – i.e. not health decisions – then a ‘property and affairs LPA’ is ideal.
Independent financial advisers (IFAs) can also be key players in your old-age team. And if you’re not already best friends with an investment whizz who you could give power of attorney to, it’s wise to let a pro take care of it. Ideally someone who understands you and your lifestyle as well as the numbers. Here’s some guidance on how to choose an adviser that’s right for you.
Living Trusts are another legal arrangement you might consider to protect your money from greedy so-and-sos. They work by letting you place assets of your choice into a protected account, which is managed by a ‘trustee’ you appoint – usually a professional – and sets out who will inherit the assets when you die. Trusts can be quite complicated and expensive to set up and you’ll need a solicitor, so they aren’t for everyone. But it’s handy to know you have options.
This has only been a brief intro to getting help in your later years. We’ve opened the door a crack to show you there’s hope, but there’s a whole lot more to consider when you step over the threshold. Here are a few great guides to fill in the gaps:
Alzheimer’s Society – Living with dementia and managing your money
Money Advice Service – Handing over control of your finances in old age
Age UK – Money and legal advice
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