Top Ten Tips: Planning for twilight years

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WHEN we think about financially preparing for the future, it’s usually investing for retirement that we have in mind.

There are other vital pieces in the puzzle, however, such as deciding who to leave in charge of your finances on your behalf when you’re no longer capable of managing them, or researching care options.

Alan Innes, partner at Pagan Osborne, offers his top ten tips on organising your personal affairs for whatever the future holds.

Financial power of attorney (POA)

A POA is a legal document that allows someone (an individual or an entity) to conduct business on someone else’s behalf. Having the conversation with family and friends about what should happen to any money, assets or bank accounts isn’t easy, but it’s a good first step in establishing a financial POA.

This is a necessary preparation to make in case anything happens that leaves you in too poor a physical or mental state to deal with your own financial affairs. This might include day-to-day matters such as paying bills, checking and signing documents or form filling.

Welfare power of attorney

Organising a welfare POA will, in the event of reduced mental capacity, ensure that a friend or family member who knows your wishes makes the decisions around issues such as living arrangements or future courses of medical treatment.


It may be worth considering downsizing your home in order to ensure the most is being made from any savings and assets following retirement or inability to work due to illness. For example, think about how necessary it is to continue living and maintaining the family home. However, this can be difficult in the current market, while for smaller properties it may not be viable.

Get what you’re entitled to

The latest figures from the Department of Work and Pensions (DWP) show that more than £16 billion of state benefits went unclaimed in 2009-10. Finding out about eligibility for any financial assistance, such as tax credits, can result in an important additional income. The benefits calculator at can help you track down anything you’re entitled to but not claiming.

Look at trusts

A trust is a way of managing assets for people. There are several types of trusts and they are all taxed differently.

You can set up a trust for a number of reasons, including passing on assets after death, when someone is too young to handle their own affairs or when someone can’t handle their affairs because they’re incapacitated. For that reason they can be very adaptable, for example, to help pay a grandchild’s school fees.

6Tax Planning

Tax planning can be used to help better protect what you have. There are various ways to reduce the value of an estate for IHT purposes.

The first step, if possible, is to ensure that a gifting regime is put in place to make use of the small and annual gifting exemptions. It’s a common misconception that IHT is only taxable on assets held at death – this is not the case as it also impacts on gifts made to individuals and transfers into most trusts during a person’s lifetime.

Financing care at home

Creating a plan to be able to afford the cost of living at home, as well as any extra care assistance required, can be aided with the use of self-directed payments.

This allows you to receive a direct payment (in lieu of a service) which can be spent as you choose, rather than accept the care or service organised by your local authority. The right to claim a direct payment is enshrined in law, through the Social Care (Self-directed Support) (Scotland) Act 2013.

Moving to a care home

Visiting care homes is a great way to see for yourself how they work and you can even put your name on the waiting lists.

When looking at how you will afford the price of a care home, your doctor can arrange for assessments which can result in a referral to social services. If you’re eligible, they provide free personal or nursing care which covers the costs to a certain level.

Ensure your will is up to date

A will is a vital piece of paperwork that will ensure a person’s hard earned wealth and anything of personal importance will be passed on to the people of their choice. Failure to make one could mean that your wishes are not carried out after death.

Advanced medical directives

Commonly known as “living wills”, these have become more popular in recent times as people choose to take control of their medical treatment rather than leaving it to family and medical staff to make important, and sometimes, difficult decisions.

A living will enables you to set out personal medical treatment choices in advance and is often known as an Advance Directive.