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World Alzheimer's Month - How Does Alzheimer's Affect You?
September marks the beginning of World Alzheimer’s Month, which seeks to raise awareness and highlight issues faced by people affected by dementia. In our latest blog we consider how dementia may affect you and what you can do, and should not do, when planning for the future.
What is Alzheimer’s disease and dementia?
Alzheimer’s disease is the most common type of dementia. Dementia is the term given for a number of related symptoms associated with an ongoing decline of brain functioning, which may include problems with memory, language, understanding, judgment, mood and a host of others.
It is estimated that in the UK, 1 in 14 people over 65 have dementia [1] and this this increases to 1 in 6 over the age of 80. [2] Of the people born this year, it is estimated that 1 in 3 people will develop dementia in their lifetime. [3]
Often in the later stages of dementia it may not be possible to continue living at home and a move to a care or nursing home may be necessary. In 2013, of those people living in care homes 70% had a diagnosis of dementia.
What is the cost of dementia?
Unfortunately, the cost of care and nursing homes can often mean your lifetime savings are used up, leaving very little left for your loved ones. Whilst you have assets of more than £23,250 you must pay for 100% of your care. If your assets fall below this sum but are above £14,250 the local authority will contribute towards the cost of your care. Once your savings fall below £14,250 the local authority will pay for all of your care. Certain assets may be disregarded by the local authority.
The average amount self-funders pay for a nursing home in the area of Hampshire County Council is £1,147 per week, or £59,632 per year. In the area of Windsor & Maidenhead Royal Borough Council the average cost is £1,471 per week, or £76,493 per year. [4]
A person receiving a diagnosis of Alzheimer’s disease typically has a lifespan of 8 to 10 years so, using the above figures, the cost of their care will be least £611,944. Some people will live 15 or 20 years which could mean the total cost of their care will be £1,147,395 and above. If a person has more serious nursing requirements, the costs of their care is likely to be significantly higher.
What can you do now to plan for the future?
Make Lasting Powers of Attorney
A Lasting Power of Attorney gives authority to someone else to make decisions on your behalf if you lack the necessary mental capacity in the future.
If you lose capacity to manage your finances and have not made a Lasting Power of Attorney, potentially any assets or property that you own in your own name or jointly with anyone else (even a spouse or civil partner) could be frozen. To deal with your assets, an application to the court will be needed for a Deputyship Order. It often takes around 6 months to obtain a Deputyship Order, which is a costly and paper heavy exercise. Once a Deputyship Order is granted, it is likely that the Deputy will need to submit a return to the court every year stating what you own, your outgoings and your income and a fee may be payable to the court to review the return.
As a result, it is preferable to make Lasting Powers of Attorney now while you have capacity, which will considerably ease the burden on your loved ones. It will also allow you to say who should make decisions for you, when and how.
Review your will
The traditional approach to writing a will is to leave all of your assets to your surviving spouse or partner. This would mean that, after the first of you to die, a substantial part of your estate could be used to pay for your spouse’s or partner’s care fees.
It is possible to structure your will in such a way that your spouse or partner can still benefit from your assets, but they are unlikely to be taken into account for care fees. This could enable your spouse or partner to stay in their care or nursing home of choice for longer and make it more likely that your other loved ones will receive more from your estate than might otherwise have been the case.
What should you not do when planning for the future?
You should not give away assets with the sole or significant intention of reducing the amount you contribute towards the cost of your care. This is known as “deliberate deprivation of assets”.
If you are found to have intentionally deprived yourself of assets, the local authority may treat you as still owning the asset or recover their charges from the person you gave your asset to. There is no limit on the time the local authority can look back to see when you gave the asset away.
Even if you never need care, if you give away an asset to another person, you lose control of that asset. Although you may trust that person now, what if that person loses capacity, divorces, dies or your relationship with them goes downhill? In any of the above cases, you may have lost an asset which you need later.
When should I make a Lasting Power of Attorney or review my will?
You can only make a Lasting Power of Attorney or a will whilst you have capacity to do so. If you do not have capacity, an application to the court will be necessary, which is a long and expensive exercise.
Unless you have a crystal ball and can see into the future, you should take steps now whilst you have capacity to do so. Please get in touch with one of our teams in Winchester, Alresford, Sunningdale or London. Alternatively you can contact us by telephone on 01962 841041 or email info@taylorfordyce.co.uk.
Useful links
https://www.alzheimersresearchuk.org/
https://www.nhs.uk/conditions/dementia/
[1] Prince, M et al (2014) Dementia UK: Update Second Edition report produced by King’s College London and the London School of Economics for the Alzheimer’s Society
[2] Prince, M et al (2014) Dementia UK: Update Second Edition report produced by King’s College London and the London School of Economics for the Alzheimer’s Society
[3] Lewis, F: Estimation of future cases of dementia from those born in 2015 (July 2015); Consultation report for Alzheimer’s Research UK
