How does estate planning assist with Aged Care?

Nov 17, 2021

Alteris Financial Group advisors first met Joan* and John*, at the beginning of last year. They were a lovely couple living in a quiet, leafy Sydney suburb but struggling to look after themselves in the family home. Joan was 82 and, although in good physical health, she was struggling with advanced dementia. John had been caring for them both but, at 84 and battling stage-four cancer, it was becoming too much for him to continue. Although mentally alert, John’s medical situation only gave him a limited life expectancy.

With the support of their family and assisted by their Alteris advisor, Joan and John made the decision to sell their home and move into aged care. Using the funds from the sale of the home, they paid their respective Refundable Accommodation Deposits (RAD) to the aged care facility.

When making the decision to enter Aged Care, Joan, John and their children decided to engage the services of an Alteris Financial Group advisor to help with asset management, identify the estate planning considerations and help navigate the complicated aged care process. When assessing Joan and John’s situation, it was important to not only look at the immediate needs of the couple, but also at the longer-term repercussions which would come into play when John passed away, given his health status.

As is common with couples, their existing wills left all financial assets to the surviving spouse before then passing to the couple’s three children. Joan, as the benefactor of John’s will, would inherit all assets which would result in an increase in her means-tested care fee as well as impact on her ability to retain the age pension.

Joan and John’s Alteris advisor considered a range of scenarios, keeping in mind the optimal outcomes desired by the family. John was assessed as having mental capacity to alter his will and so a new will was drawn up that incorporated a portion of John’s assets being divided equally between the three children. This met a number of goals including allowing Joan to retain her age pension as well as benefitting their children with an earlier-than-expected inheritance.

Sadly, John passed away late last year but had the comfort of knowing that Joan would be well looked after, and their children would be assisted in their future financial goals. Joan continues to be supported by her family and is happy in her room within the memory-support section of her Aged Care home.

 *Names changed to respect the privacy of our clients.

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