Why a transition to Aged Care should trigger an estate planning review

By Kristy Hatcher, Wills & Estates Litigation Lawyer, Owen Hodge Lawyers

Estate planning and navigating the transition to Aged Care are deeply intertwined in Australia. When supporting a parent or loved one to move into Aged Care it’s essential to also focus on estate planning to ensure their interests and wishes are protected.

Estate planning provides a framework for managing assets and making decisions about the future, which becomes even more critical when planning for the transition to Aged Care. It ensures your parent or loved one has the financial means and support to access the care they need while protecting their interests and those of their loved ones.

Here’s what to consider when it comes to estate planning if your parent or loved one is transitioning to Aged Care.

Financial and legal considerations
Aged Care can be expensive, involving accommodation payments, ongoing fees, and potentially medical expenses.

Typically, the first financial decision to be made will be whether or not to sell the family home or other assets. This will help cover the costs of Aged Care, but it will also impact estate planning. In this instance, the home and/or other key assets will no longer form part of the estate to be bestowed upon beneficiaries, which may or may not be in line with your loved ones wishes.

Because any financial decisions like selling the family home or other assets will impact estate planning and beneficiaries, it makes sense to review estate planning alongside the transition to Aged Care. Engaging experts like a financial adviser and estate planning solicitor will ensure your parent or loved one gets the best possible outcome.

Estate planning considerations
Estate planning helps ensure your parent or loved one’s assets are protected and distributed according to their wishes, even with the added financial pressures of Aged Care. It can also help prevent future disagreements among family members about care and/or finances.

There are several components to estate planning that should be revisited during a transition to Aged Care.

• Power of Attorney: As we age, our capacity to make decisions might decline. A Power of Attorney, established through estate planning, allows a trusted person to manage our finances and make decisions on our behalf if needed. When a parent or loved one is transitioning to Aged Care, this is a crucial step for a smooth transition. Ideally, this will be in place before a transition to Aged Care, but if not it should be a priority throughout the transition.
• Enduring Guardianship: If we lose capacity to make lifestyle decisions, an Enduring Guardianship can be appointed to make choices about our care and living arrangements. This is often addressed within an estate plan. If a parent or loved one needs to be moved to Aged Care, this will be required should you need to make this decision on their behalf.
• Wills and asset distribution: A Will outlines how our assets will be distributed after death. Planning for Aged Care allows your parent or loved one to consider how potential care costs and accommodation payments might affect their estate and ensure their wishes are still met.

Key takeaways
The transition to Aged Care usually occurs quickly, often following a medical issue or injury. As such, it’s critical to already have an estate plan in place that can be tweaked as needed once the transition commences.

It’s essential to integrate Aged Care considerations into an estate plan to ensure a smooth transition and safeguard your parent or loved one’s financial wellbeing and decision-making capacity as they age.

About Kristy Hatcher
Kristy Hatcher is an accomplished Estate Planning Solicitor with Owen Hodge Lawyers. With an impressive reputation that stems from her extensive experience, Kristy’s credentials include a Master of Laws specialising in Wills and Estates. Kristy uses her experience and specialty to achieve outstanding results for her clients.

www.owenhodge.com.au