Importance of dementia planning for estate protection highlighted
Tessa Till, a partner at Pagan Osborne(pictured), believes the myriad of financial and legal issues associated with the condition are not being dealt with or planned for until it is too late and the issues faced by families are only set to escalate in the coming years.
The number of people in Scotland with dementia at present is estimated to be 86,000 and this figure is set to almost double in just over 20 years to 164,000 cases by 2036.
Ms Till said: “It is just as important to put plans in place for possible diagnosis of dementia and later life care, as it is to have a Will which deals with the succession of a person’s estate on death.
“While 20 years ago lawyers would have been advising clients to ensure they had made adequate plans for their estates once they had passed away, we are now advising people to build planning for care and dementia into their long-term legal and financial wishes.”
It is estimated that only half of the UK’s 850,000 dementia cases have been diagnosed and the condition is a priority for policy-makers at UK and Scottish government levels.
The UK government introduced a scheme in October to offer doctors in England and Wales bonuses for the diagnosis of dementia.
This was not well-received and will be dropped in April 2015.
In Scotland, the issue has been high on the agenda of the Scottish government supported by leading dementia charity Alzheimer Scotland.
In 2013 it guaranteed a year’s post-diagnostic support for everyone diagnosed with dementia.
Across Scotland, this support is provided directly by the NHS and also by Alzheimer Scotland’s Dementia Link Workers on behalf of the NHS.
Through this initiative there has been a gradual increase in awareness in the professional and financial community in Scotland on how to interact with people who have dementia and how to support them and their families.
Many professionals are now “Dementia Friends” and there has been a big push to educate, in particular, bank staff in how to communicate effectively with customers who have dementia.
Ms Till added: “The initiative by the Scottish government is encouraging, but more work still needs to be done to educate the professional community and the public.”
A Will must be made when someone is “of sound mind” – a dementia diagnosis could also cause issues in this area, with any changes to the Will for both Inheritance tax planning reasons and asset protection reasons being blocked by the loss of capacity.
Any changes to a Will can also be open to challenge by disappointed beneficiaries.
It is essential to have a power of attorney in place which appoints the right people to make decisions on behalf of someone at risk of dementia, which gives the attorneys wide powers to manage the person’s affairs and make the correct financial and social decisions for them.
Again, once a diagnosis has been made then it may be families need to seek a Guardianship order which is far more difficult to do.
Ms Till said: “Estate planning becomes more difficult once a dementia diagnosis is made - even if it is in the early stages and the person feels fully able to make their own decisions.
“While the provisions in law are rightly there to protect vulnerable people, it can cause issues for genuine cases of estate planning which is being done in the best interests of the person and their family.
“The sad reality is dementia is now a far more likely part of modern life. With people living longer, it will play an even more significant part in the make-up of society and it is something that people – from the individual to governments – are all having to respond to.
“Making provisions for a dementia diagnosis is now a vital part of estate planning. I would urge people to seriously consider this sooner rather than later, before it becomes an issue and far more difficult to contend with legally and financially.”