Morris encourages advisers to consider how best to also give consideration to family members who may potentially become full-time carers of their client.
He says: “If a family member becomes the client's full-time carer, that person can claim the carer's allowance of £67.60 a week. However, if they have a power of attorney or there is a trust arrangement in place for the client, the attorney or trustee are in control of the client's spending needs.
"As long as they adhere to their duties as an attorney or trustee, this can help the carer cover their costs associated with providing care.”
Charitable giving
When it comes to philanthropy, Hanifan says: "An option is ringfencing gifts, particularly inter vivos using a trust vehicle.
“A trust will allow the philanthropist to have greater control over the distribution of the assets – either personally during their lifetime or by appointing the trustees and setting out clearly the trust’s objectives.
"A will trust needs to be reviewed regularly or the assets intended for the trust may be used or dissipated during the philanthropist’s lifetime.”
And charitable giving can work for all parties, as Mason explains: "Charitable bequests can help lower the inheritance tax rate applied to the excess.
"However, leaving a percentage of assets on death to charity can also cause unintended consequences if the fulfilment of the bequest requires the sale of assets to realise the full benefit of their request.
"This could mean, for example, property being sold against the wishes of the wider family or disputes over the value of personal items. This is why we generally advise clients to be specific with charitable bequests, for instance by leaving a specific financial sum or particular items like artwork or jewellery to charity.
“If a client does wish to leave a percentage of assets, then it should be easily defined – for example, 10 per cent of the value of their estate, excluding personal chattels.”
ADL's Uz-Zaman says that the best way to manage living and giving in later life is to take a multi-generational approach.
“Parents should start thinking about taking out pensions for their children as well as setting up trusts via their wills to give their children access to funds without it ever adding to their personal estate.
"Those trust funds, and to a lesser extent a pension, are likely to be far better protected, thus providing crucial liquidity for adult children when they need it.”
On the giving side, Uz-Zaman recommends that parents gift savings to a gift trust, appointing professional trustees alongside themselves to ensure the funds are used for those philanthropic purposes.
"They should also ensure that the gift is a chargeable lifetime transfer, to avoid tax on larger charitable gifts," he adds.
