Is the cost of long term care influencing your inheritance planning?
Recent studies have shown that many people in the UK are being put off of inheritance planning by the fear of long term care fees.
According to a report by Investec Wealth and Investment, many over 65s are so concerned about having enough money to pay for their care fees that they are making no plans to pass their assets on to the next generation.
Sadly over 35% of over 65s think that they will not be in a position to leave anything to their children.
However this is due far more to the usual media churn of disinformation and sensationalist headlines that it is to reality.
Here’s why:The average couple leave behind £282,000 when they die, considerably more if they are property owners living in the South East.More than 1 in 6 of us will leave behind well over £325,000, which is the threshold when Inheritance Tax kicks in.
But thanks to the endless scare stories in the media many people believe that most of this money will be swallowed up on care fees, when in reality long-term care fees rarely exceed £70,000.
This is based on the average stay in a care home of two and a half years at a rate of £28,000 a year.
What this means is that many people end up avoiding inheritance planning because they, understandably, think that they are going to need all their money.
In reality all that happens is that when they die they leave behind a considerable pot of money from which the Chancellor then helps himself to 40%.
This is money that could have been passed down to their loved ones or chosen charities with a bit of forward planning.
The key message here is that avoiding inheritance planning or making decisions based on media headlines exposes you to unnecessary worry and risks passing on an increased tax liability to future generations.
The obvious solution is to seek professional expert advice and make sure that you take the appropriate steps in your Will to make sure that you are fully covered for any eventuality whilst doing everything you can to pass your wealth on to those whom you care about most.
Long term care fees and Inheritance Tax are both areas that can be planned for and minimised in a completely open, lawful and ethical way, simply by making sure that you use of all of the benefits that you are entitled to as a British Citizen.
To find out more, please do contact us and speak to a member of the team. We will be happy to help in any way we can.
Approaching retirement can be a slightly worrying prospect anyway, but making plans based on misinformation is a sure fire way to unnecessary stress and worry.
Good sensible advice and planning on the other hand is the simplest route to peace of mind and a happy retirement.