A new whitepaper highlights the collaborative approach required between the adviser, the accountant and the lawyer in constructing an effective aged care plan.
The research from advice firm Zest Financial Solutions noted that aged care planning can be a sensitive issue for a person and their advisory professionals to discuss, particularly for older adults.
It said aged care planning should ideally be happening in a client’s 50s or 60s before major capacity issues arise.
“Although some people may have the best intentions when a family member accompanies an elderly person to an appointment with a lawyer, the lawyer needs to determine who the client is and if there are any capacity issues,” the paper said.
“As one lawyer mentioned when surveyed, ‘the daughter becomes the ventriloquist and the mum becomes the doll’.
“For clients in this situation, who are older (in their early 70s), planning becomes an urgent situation of assessing the client’s current situation and the risks if a plan isn’t in place and something happens in the next five years.”
According to the white paper, factors that a lawyer will assess when reviewing an aged care agreement include:
“With the sensitivity that surrounds the recovery of unpaid aged care fees from a person who doesn’t have mental or physical capacity, many aged care providers require a form of security or personal guarantee for the resident’s obligation,” the paper said.
“This is where conflict transaction clauses in EPA documents become extremely important, further demonstrating the holistic and proactive approach that needs to be taken with estate planning.”
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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