Lack of aged care planning can lead to financial stress, broken families

It is a problem aged care and retirement living financial specialist Alexandra Plumb has seen all too often.

So, why do Australians keep putting this important issue on the back burner?

The Vincents associate director and financial advisor said nobody wanted to talk about aged care, and as a result, families were leaving an important discussion to the last possible moment.

"People are choosing to maybe bury their heads in the sand a little bit, thinking needing to access aged care will never happen to them," Ms Plumb said.

"Also, (other) people are thinking they've got plenty of time to worry about it."

But she said in her line of work she had seen it all too often - an elderly person will go into hospital and the family will be hit with the bombshell that Mum or Dad either won't be able to come home again, or will have to access home services to support their growing care needs.

"Suddenly it's a really big rush to find them appropriate accommodation or services.

"I think a lot of people underestimate the complexity of the system and how long it takes to get through."

Ms Plumb said a lot of people were not even sure how to get started when it came to navigating the complex system. This could place a large stress burden on families who were often tasked with making decisions on behalf of their loved ones, she said.

"We see a lot of family relationships disintegrate in these types of situations, where no planning has been done and things are left to the last minute.

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"Whenever money is involved arguments are likely to come out amongst the family."

As a result, clients and families often feel compelled to pick the first available care option, even though the first option is rarely the best in terms of meeting their needs.

It can also lead to vulnerable people being financially penalised, especially independent retirees who have to declare all their income and assets to Centrelink. Incorrect reporting can result in clients being overcharged with fees they can't afford, or being hit with sizable and unexpected back pay debts in the case of underreporting.

So what are Ms Plumb's key tips to avoiding these stresses and burdens? The first step is to start planning early.

"It doesn't matter if we've got someone who has just entered retirement, or someone who is well into retirement, any age is a good time to start planning for those frailty years."

Planning ahead can provide clarity by allowing people to make sure their finances are properly structured, make home modifications that may allow someone to live independently for longer, and put the right teams and support services in place.

Ms Plumb also advised seeking help from professionals to ensure all contingencies were covered for.

A financial advisor - particularly one who has expertise in aged care - can help ensure finances are structured properly in order to minimise stress and financial burden.

"The rules are so complex you want to be dealing with a professional who is across those rules. So many issues can be avoided."

Placement specialists can help find the best care options for the client, while estate planning specialists can ensure a person's will is fully up to date and an enduring power of attorney is in place.

Those who can't afford specialists may be able to find some help navigating the system through Centrelink and the My Aged Care website. Those seeking help with aged care planning can also visit the Senior and Aged Care Living Transition (SALT) directory online, which can connect them with a range of helpful professional services.