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Estate planning needs aged care consideration
3/10/2017

Estate planning needs aged care consideration

03 Oct 2017 - By Darin Tyson-Chan (http://www.financialobserver.com.au/articles/estate-planning-needs-aged-care-consideration)

 

A review of an existing will should be performed when a person’s spouse is admitted to an aged care facility to avoid unsatisfactory outcomes upon death, the partner of a law firm has said. 

CRH Law partner Brian Herd explained this process should be carried out because in most wills an individual leaves the majority of their possessions to their spouse upon death. 

An issue then potentially arises if the beneficiary is placed in aged care and the maker of the will is the first one to pass away, he said. 

“Consequence? The entire estate of the couple is now owned just by the person in the nursing home,” Herd told attendees at the recent Australian Investors Association Conference held on the Gold Coast. 

“Consequence? Up go the surviving spouse’s aged care fees. So when you think about a simple will this is where aged care starts to drive a wedge into our will-making.” 

Herd was quick to point out there was nothing wrong with the practice of leaving all of one’s worldly possessions to their spouse but the action should be performed with a certain level of awareness. 

“It makes sense doesn’t it, to give everything to each other. That’s what people do. But along come later life events to drive a wedge into that aspiration such as that example I just gave,” he said. 

“Why would you want to do that? Because you love your spouse and that’s what love translates to when it comes to the transfer of wealth. You give it to them. 

“But once that spouse went into aged care if I was the person left at home I’d be reviewing my will just on the chance I died before they did.” 

Herd added this type of situation could potentially have greater consequences for the family unit as any surviving children would be unlikely to welcome a subsequent rise in the aged care fees being charged. 

For advisers wanting to find out more about the aged care space and recent changes to the sector, Financialobserver will be hosting its annual Aged Care Summit in Melbourne on 19 October and Sydney on 20 October. Visit www.financialobserver.com.au/events to register.

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