Protection, wills and power of attorney are some of the financial planning tools carers should think about, according to Quilter.
The financial planning firm has released its top tips for the main types of carer to mark Carer’s Week (10-16 June).
For carers looking after a parent, it is imperative that a parent sets up their power of attorney (PoA) as early as possible to give them control over who becomes their main carer in the event they can no longer look after themselves.
“Failing to set up a PoA can add an extra layer of difficulty to the caring process as if you don’t the Court of Protection will have to appoint a deputy on the person’s behalf who may not necessarily have been their first choice when they had the capacity to make the decision,” said Quilter’s tax and financial planning expert, Rachael Griffin.
While a deputy and PoA essentially have the same job with same duties, a deputy will be heavily scrutinised and supervised by the Office of the Public Guardian (OPG) for the duration they care for someone.
It is also important to ensure that a will is in place for a parent before their health starts to deteriorate so it is less likely to be challenged in court.
“Similarly, just the process of writing a will can be a useful process for analysing a person’s estate and working out whether there are any inheritance tax mitigating steps that could be taking to reduce someone’s liabilities,” said Griffin.
For carers looking after a spouse, they should consider taking out a protection policy. Griffin said this is particularly important for full-time carers who might have left the workplace to take on caring duties but in doing so also left behind any employee benefits.
“If someone is caring for their husband or wife and then falls ill it can leave the pair in a very difficult position having to not only cope with the lack of earnings but also the need to pay for additional care,” she warned.
A will is also important for carers looking after a spouse, particularly if they are suffering from declining mental or physical health. Those looking after a child that requires special care might want to consider trusts and lifetime gifting.