Navigating aged care decisions can be a challenging and emotional process, particularly when it involves the family home. At ActOn Wealth, we understand the complexities surrounding aged care advice for homeowners. Below, we explore essential discussion points to consider when addressing these sensitive topics.
Key Questions to Address:
Is the Home Currently Vacant Practical Considerations: If the home is unoccupied, who will manage upkeep and maintenance? It is crucial to notify insurers of the vacancy to maintain home and contents coverage. Financial Implications: The home's status impacts social security entitlements and aged care fees. After two years of being vacant, the home becomes an assessable asset for social security purposes. Sale proceeds may impact cash flow, the means-tested fee MTF, and pension entitlements.
Renting the Home: Practical Considerations: Are renovations or maintenance required to make the home rentable Who will liaise with real estate agents Plan for periods of vacancy and estimate net rental income. Financial Implications: Rental income affects aged care fees and social security entitlements. Assess the tradeoffs between rental income and potential pension loss or fee increases.
Selling the Home: Practical Considerations: Are there repairs or maintenance tasks to address before listing the property Ensure a registered Enduring Power of Attorney EPOA is in place for third party decision making. Financial Implications: Evaluate capital gains tax CGT liability if the home was not always the principal residence. Consider how sale proceeds will be allocated to fund aged care costs or investments.
Supporting a Spouse or Family Member Remaining in the Home: Spouse Needs: Evaluate the spouse's health and mobility to determine if the home remains suitable long-term. Plan for future expenses such as home care services or modifications for safety. Condition of the Home: Can the spouse manage ongoing maintenance, or is external support needed? Consider applying for home care packages to facilitate independent living. Future Changes: Discuss contingency plans if the spouse requires residential aged care. Review social security impacts if the home is sold or rented to support care costs.
Tax and Estate Planning Implications: Tax Considerations: CGT applies if the home was not always the principal residence. Superannuation contributions from sale proceeds may refresh pension accounts but could trigger loss of grandfathering for social security deeming purposes. Estate Planning: Update wills to reflect changes in asset holdings and ensure superannuation beneficiary nominations are accurate. Consider the implications of intergenerational transfers or shared living arrangements on the estate.
How ActOn Wealth Can Help: Providing aged care advice requires a holistic approach that considers financial, emotional, and practical factors. At ActOn Wealth, we offer: Comprehensive Guidance: Tailored strategies to manage aged care costs and optimise entitlements. Collaboration: Coordination with legal and tax professionals to address complex issues. Empathy and Expertise: Support for families navigating the challenges of aged care decisions.
Contact ActOn Wealth today to ensure your loved ones receive the care they need while safeguarding their financial well-being.
