Helping your beneficiaries plan for the future
With the public purse under increasing pressure Charities, particularly those campaigning for or supporting those with life limiting illnesses or disabilities, will be be expected to fill the void in state services. The current uncertainty will also doubtless add to the strain that beneficiaries and service users are under.
Providing education and support on a practical level for staff and service users will ease the burden on both your organisation and beneficiaries, and increase awareness of the issues.
Developing a five point plan
Caring for a person who has suffered a catastrophic injury, or has a learning or other disability, or who is suffering from a life limiting illness has a ripple effect throughout family and friends that reaches well beyond the immediate care and support needs. The legal and financial consequences also extend into wider issues, but much can be done to protect and preserve both income and assets. The trick is to put the tools in place to maximise the advantages now, and preserve them for the future.
First steps
The first crucial stage, of course, is immediate care and support for the individual and those close to them. Care and comfort are the most important factors; but they are often followed by the need for expert emotional support. This along with financial, legal and care funding advice are often put to the bottom of the pile and can generate more pressure in already difficult circumstances. There are a number of practical things that should be considered but support groups are vital as people are not alone. There are often many people in a similar position or who have experience that can support us in carers groups nationwide.
Practical matters
On a personal financial level, quite quickly applications will need to be made to ensure all State support is obtained, whether through direct NHS services, via means-tested benefits (such as Income Support) or non-means tested benefits (such as Disability Living Allowance). This advice is obtainable directly via government agencies, through charities and advice organisations (such as CAB), solicitors and Independent Financial Advisers (IFAs). This will help ease the financial burden and allow people to concentrate on care and support.
If there is medical or other insurance, this will also help alleviate the financial burden or interim payments if personal injury litigation is relevant. It is important to avoid prejudicing means tested benefits, for which the cut off is often £6,000, or for care costs where the ceiling is £23,250 down to £14,250.
Preserving the position and protecting finances
Where individuals do not have their own significant assets, to maintain benefits and state funded care a Trust may be appropriate to protect inheritances and other gifts. The use of trusts is advocated by a number charities, for example the Mencap Trust Company scheme, where a wrapper can be placed around assets that are to be given to an individual who may be in care paid for by the state, and / or in receipt of means tested benefits. This is often combined with the Wills of the family carers and it is important to have the right advice when putting these plans in place.
Families and friends forget to update their wills or make provision themselves, forgetting that capital given or left to people in receipt of state funded care or benefits could result in them losing that care or income. By providing a Trust, either now or by will, the money given can be held outside of assessment, preserving the financial position and enabling the capital to be used to enhance quality of life. Such expenditure could range from the purchase or adaptation of a property, holidays, high quality or specialist equipment, or simply supplementing normal day to day expenditure and enhanced care.
Trusts can also be used to pay third party top-ups if any residential or nursing care that’s required costs more than the contract rate paid by the local authority.
Managing finances
If a trust is used the need for an individual to manage significant assets is reduced, if necessary. In many instances, especially where it is life limiting illness or significant personal injury, the individual may need some support to manage their finances. If so there are two likely routes available, both stemming from the Mental Capacity Act 2005.
The first option, if an individual is able to do so, is to make a Lasting Power of Attorney (LPA). Such a document allows the individual to choose people to support and help in financial management, but allows the individual to impose terms and guidance on the attorneys. It is far less restrictive than a Court of Protection appointed Deputy, which is the second option for people who cannot make an LPA.
A Court appointed Deputy can be either a professional or a friend / family member. As the Deputy is Court appointed there is a far greater degree of supervision (and cost) associated with this every year. This involves rendering an annual account, paying a security premium and most of all ensuring that the terms of the order (which may be restrictive) are operated within.
With either an Attorney or Deputy, the 296 pages or so of the Code of Conduct provided by the Mental Capacity Act apply. These govern how to administer the powers given and support the five guiding principles of the Act. While this provides good guidance and protection it also demonstrates the value of setting up the appropriate mechanisms to make life simpler and protect the financial position.
In summary, it is essential that individuals take appropriate advice as soon as possible to ensure a five point plan is achieved: -
Providing education and support on a practical level for staff and service users will ease the burden on both your organisation and beneficiaries, and increase awareness of the issues.
Developing a five point plan
Caring for a person who has suffered a catastrophic injury, or has a learning or other disability, or who is suffering from a life limiting illness has a ripple effect throughout family and friends that reaches well beyond the immediate care and support needs. The legal and financial consequences also extend into wider issues, but much can be done to protect and preserve both income and assets. The trick is to put the tools in place to maximise the advantages now, and preserve them for the future.
First steps
The first crucial stage, of course, is immediate care and support for the individual and those close to them. Care and comfort are the most important factors; but they are often followed by the need for expert emotional support. This along with financial, legal and care funding advice are often put to the bottom of the pile and can generate more pressure in already difficult circumstances. There are a number of practical things that should be considered but support groups are vital as people are not alone. There are often many people in a similar position or who have experience that can support us in carers groups nationwide.
Practical matters
On a personal financial level, quite quickly applications will need to be made to ensure all State support is obtained, whether through direct NHS services, via means-tested benefits (such as Income Support) or non-means tested benefits (such as Disability Living Allowance). This advice is obtainable directly via government agencies, through charities and advice organisations (such as CAB), solicitors and Independent Financial Advisers (IFAs). This will help ease the financial burden and allow people to concentrate on care and support.
If there is medical or other insurance, this will also help alleviate the financial burden or interim payments if personal injury litigation is relevant. It is important to avoid prejudicing means tested benefits, for which the cut off is often £6,000, or for care costs where the ceiling is £23,250 down to £14,250.
Preserving the position and protecting finances
Where individuals do not have their own significant assets, to maintain benefits and state funded care a Trust may be appropriate to protect inheritances and other gifts. The use of trusts is advocated by a number charities, for example the Mencap Trust Company scheme, where a wrapper can be placed around assets that are to be given to an individual who may be in care paid for by the state, and / or in receipt of means tested benefits. This is often combined with the Wills of the family carers and it is important to have the right advice when putting these plans in place.
Families and friends forget to update their wills or make provision themselves, forgetting that capital given or left to people in receipt of state funded care or benefits could result in them losing that care or income. By providing a Trust, either now or by will, the money given can be held outside of assessment, preserving the financial position and enabling the capital to be used to enhance quality of life. Such expenditure could range from the purchase or adaptation of a property, holidays, high quality or specialist equipment, or simply supplementing normal day to day expenditure and enhanced care.
Trusts can also be used to pay third party top-ups if any residential or nursing care that’s required costs more than the contract rate paid by the local authority.
Managing finances
If a trust is used the need for an individual to manage significant assets is reduced, if necessary. In many instances, especially where it is life limiting illness or significant personal injury, the individual may need some support to manage their finances. If so there are two likely routes available, both stemming from the Mental Capacity Act 2005.
The first option, if an individual is able to do so, is to make a Lasting Power of Attorney (LPA). Such a document allows the individual to choose people to support and help in financial management, but allows the individual to impose terms and guidance on the attorneys. It is far less restrictive than a Court of Protection appointed Deputy, which is the second option for people who cannot make an LPA.
A Court appointed Deputy can be either a professional or a friend / family member. As the Deputy is Court appointed there is a far greater degree of supervision (and cost) associated with this every year. This involves rendering an annual account, paying a security premium and most of all ensuring that the terms of the order (which may be restrictive) are operated within.
With either an Attorney or Deputy, the 296 pages or so of the Code of Conduct provided by the Mental Capacity Act apply. These govern how to administer the powers given and support the five guiding principles of the Act. While this provides good guidance and protection it also demonstrates the value of setting up the appropriate mechanisms to make life simpler and protect the financial position.
In summary, it is essential that individuals take appropriate advice as soon as possible to ensure a five point plan is achieved: -
- That any needs are assessed by the NHS and Local Authority to provide appropriate support under their statutory duties;
- That all income is secured (benefits, sick pay etc.);
- That all Personal Injury compensation is protected (PI Trust or Court of Protection), ideally well within twelve months of the first payment;
- That family members ensure they protect any monies being given with a suitable Trust or similar arrangement;
- Most importantly, that comfort, independence and recovery are maximised, and funds are used to enhance this and quality of life.