3 important ways that working with a financial planner can help when caring for a loved one

When a loved one is no longer able to manage their own affairs, it can often put you in a very difficult situation. Not only is this a deeply emotionally distressing time, but you may also have to take on greater financial responsibilities. If you’re in this situation, it can be easy to feel overwhelmed. When you have so many things to think about, it can sometimes be hard to see the bigger picture. Providing care for a loved one can be a big responsibility, but if you want some support in dealing with the more complicated financial matters, you could benefit from seeking professional advice. Here are three ways that working with a planner can help.

1. They can help you to break out of the short-term mindset

As you may know, caring for a loved one can be very rewarding, though it can equally be very challenging and often involves a high degree of stress. This can take a toll on your mental health and potentially lead to emotional burnout. When you have so many responsibilities to take care of, it can be easy to feel overwhelmed and, when this happens, you may find that it’s difficult to make important decisions. One of the main problems that you may run into is that when you’re in this mindset, you may tend to focus on the short term at the expense of the long term. However, while this is understandable, it can be detrimental to your wellbeing. For example, it can be difficult to look after your own long-term financial situation if you can only think about the present. If you don’t have time to think about your savings and investments, you may find it difficult to reach your goals in later life. When you work with a planner, they can help you to see the bigger picture and manage your wealth with the long term in mind. This can help you to gain a greater sense of confidence that you’re on track to meet your goals, giving you one less thing to worry about.

2. They can enable you to make properly informed decisions

Having a Lasting Power of Attorney (LPA) in place can be essential for when a loved one is no longer able to manage their own affairs. However, if you’re their attorney, this can leave you with a wide range of responsibilities that you may not feel ready for. For example, if they want you to manage their financial affairs then you may have a variety of important duties. These could range from making mortgage repayments on your loved ones’ behalf to managing their investments and assets. As you might imagine, it can be easy to feel out of your depth if you’ve not had much experience in these areas. This is especially the case when it comes to investing, as making a mistake can have serious consequences. If you’re in that position and don’t feel capable, it can cause you a considerable amount of stress. Furthermore, as an attorney you also have to show that you are:

• Keeping your loved ones’ finances completely separate from your own
• Not profiting from acting as their attorney
• Keeping detailed records of your financial decisions and your rationale.

This is why it’s important to keep meticulous records about your actions, which can be a daunting prospect. Thankfully, this is where seeking professional advice can help. Working with a financial planner can help you to make properly informed decisions when handling financial responsibilities. This can help to give you a greater sense of confidence in your decisions and reduce some of the stress that you may feel. They can also help you to ensure that all of your decisions are properly documented, so you can rest assured that there won’t be any potential legal issues.

3. They can help you to plan for future care costs

While you probably want to give your loved ones the most support you can, there may come a time when they need professional care. This can be potentially very expensive, so it’s important to have some money set aside for this possibility. Typically, the cost depends on two factors: the type of care they need and where in the country they live. According to figures from the non-profit organisation Paying for Care, the average cost of staying at a residential care home in 2020 was £34,994 a year. However, this rose to £48,720 for people who needed nursing care too. Your location will also have an impact on how much you may have to pay, as some regions are more expensive than others. This is where the cost of care calculator from Paying for Care can help. For example, let’s assume that your loved ones need residential care and have enough wealth that they aren’t eligible for council support. Here in Salisbury, in the southwest, this would cost £38,116 a year on average. However, in the southeast, this support could cost a person in the same situation £43,264 a year. As you might imagine, the costs of care can quickly add up. This is where working with a financial planner can help, as they can help you to set aside enough wealth to cover the potential expense. This can help to give you greater peace of mind, knowing that even if the possibility ever arose, you would be able to absorb the cost and ensure that your loved ones get the support they need.

Get in touch

If you’re providing care for a family member and want to reduce the financial stress that you’re under, we can help. Email us at office@verve-financial.com or call 0330 320 5048.