Speaking up, overcoming stigmas and having the right plans in place—key difference-makers in preparing for potential age-related health concerns.
Aging can be a difficult topic to talk about—period. While it’s a natural part of life and it’s a process that we all go through as human beings, the thought of physical or cognitive decline can be hard to accept, and not knowing if or when something may happen can leave many feeling uncomfortable. When this is the case, putting plans in place to account for potential age-related health concerns is something many individuals put off or avoid.
With Canadians generally living longer and with more and more Baby Boomers shifting into their retirement years, senior and later life health realities are something that an increasing number of families are facing. However, many families are trying to navigate these often difficult and emotional situations without any guidance on what their loved ones want, without knowledge of their intentions or without plans that outline financial or care decisions.
With this in mind, the importance of planning for potential health issues as much in advance as possible can’t be understated—for the protection and assurance it can provide when it comes to personal finances, and for the peace of mind it offers individuals and loved ones.
According to the Alzheimer Society of Canada, almost 40 percent of those over age 65 experience some form of memory loss. While some forms are considered part of the normal aging process, there are increasing cases of Alzheimer’s disease and other forms of dementia among Canadian seniors, and those numbers are only expected to grow over the next decade.1 And when it comes to all types of disabilities—physical and cognitive—seniors are almost twice as likely than working-age (25 to 64) Canadians to have at least one condition that limits their everyday activities.2
“There definitely seems to be an increasing awareness these days around senior health concerns and the potential for a situation of disability or incapacity to occur, but there’s still a gap in how that translates into proactive planning among many Canadians,” explains Leanne Kaufman, Head of RBC Royal Trust. “Individuals are gaining a better understanding of the issues and the possibility of something happening, but many don’t understand the implications of not having the right—or any—plans in place and the heartache that can come along with that.”
While this aspect of estate planning is one that many individuals recognize they need to do, there’s a common mindset that it’s something that can be pushed off as a decision for down the road. The shortfall, however, as Kaufman notes, is that “if something unexpected happens or, as some individuals start to experience age-related health issues, if there’s a situation of incapacity, whether temporary or permanent, there is no one who has the legal authority to step into your shoes and act on your behalf unless you have a Power of Attorney. It can be a very simple document, but it saves so much stress and time.”
A Power of Attorney (or Protection Mandate in Quebec) is a document(s) that legally authorizes another party to act on your behalf, and there are two basic types: a Power of Attorney for Property and a Power of Attorney for Personal Care. Depending on the province or territory where you live, these may be one document or separate documents that outline the authority of an individual or individuals (generally referred to as the “attorney” or “mandatary” in Quebec) to make personal care and/or financial and property decisions on your behalf.
A standard Power of Attorney for Property enables another party to legally make decisions about your finances and property (e.g. banking, paying bills, managing investments). A Power of Attorney for Personal Care authorizes a party to make decisions about your personal care (healthcare, medical treatment or housing).
Note: Given provincial and territorial differences in how these documents are created and signed, it’s imperative you consult with a qualified legal advisor to ensure accuracy in the wording and the signing of the documents.
For more information on Powers of Attorney and choosing someone to act, please read the Spring 2018 Perspectives article, “The power of choice” or have a look at the Power of Attorney videos and other helpful resources from RBC Royal Trust.
According to recent statistics, there are approximately 1.1 million Canadians who are affected either directly or indirectly by dementia, and one in five Canadians has experienced caring for someone living with a form of dementia.3 A related report also found that among caregivers, 87 percent wish that more people understood the realities of caring for someone with dementia, two-thirds find caregiving to be isolating and many have difficulty accessing appropriate supports and services.4 In other words, caring for a loved one can take a significant toll, emotionally and financially.
“When individuals don’t have plans in place or haven’t had those important conversations with loved ones—or both—it adds another layer of stress that may often become overwhelming for loved ones, especially if the care and financial decisions fall to one family member,” Kaufman explains. “It’s also important to consider how challenging it might be for someone who’s trying to manage the financial responsibilities for a loved one while at the same time spending a great deal of time at the hospital or a care facility.”
Depending on your circumstances, family dynamics may also be a significant factor in how a situation of disability or incapacity may be handled and navigated. As such, careful thought needs to be given to your own family, potential complexities and options or approaches to senior care and estate planning to help alleviate stress and decrease the likelihood of conflict.
Surveys indicate that more than half of Canadians are concerned about being affected by Alzheimer’s disease or dementia, and the greatest concern for many is being a burden on others.5 Added to these concerns, 46 percent say they would feel uncomfortable disclosing their dementia even to family members.6 When these types of concerns or stigmas of dementia run deep, this may function as a major roadblock to estate and incapacity planning and to having those crucial conversations with family members. To help overcome these barriers, it’s important to look at how the right planning can actually alleviate some of those worries and concerns.
“What people need to realize is that if you don’t have a Power of Attorney, if you haven’t given careful consideration to who would be the best choice to act, if you haven’t communicated your wishes and preferences to loved ones, that’s where the burden comes in,” Kaufman emphasizes. “If a situation of incapacity arises and any of these aspects are missing, family members then have to potentially navigate the court system and make decisions without information or direction as to your financial situation and what you may have wanted from a care standpoint. So it’s actually a lack of planning and leaving loved ones in the dark that really leaves the burden to the people surrounding the incapable person.”
If you’re someone who’s currently facing emotional roadblocks to planning or if you’re perhaps assuming this type of planning is something you’ll take care of down the road, a good starting point may be to simply walk through a “what-if” scenario and consider the impacts personally, financially and within your family—and this is something that can be done individually, with your spouse or another loved one or with an estate planning specialist or a qualified legal advisor. Some may also find it helpful to carry out research on the types of supports, resources and care options that are available.
At a high level, this type of exploratory exercise may be effective in helping you define your wishes and intentions and what matters most to you. For some, it may also function as a strong driver for conversations with loved ones, which ultimately may help boost your peace of mind, knowing your loved ones won’t be left with any unnecessary burdens or unanswered questions during what can be a very emotionally charged and stressful time, especially if these family members are acting as caregivers.
Another important consideration is the potential benefits third-party options may offer when it comes to your Power of Attorney (for finances). Whether acting as attorney to manage the assets or giving assistance to someone who’s been named as attorney, qualified and experienced experts such as those within RBC Royal Trust provide a customized approach and can step in to take on as little or as many of the administrative duties as needed.
And as for timing, Kaufman reinforces an important message: “When talking about planning for potential incapacity, a question I get asked often is: ‘When’s the best time to make these plans?’ My answer is always ‘Yesterday,’ regardless of your age. Incapacity can happen at any age, not just in your senior years, so it’s never too early to start the conversations and to start the planning. Then, as life events occur, go back and revisit and talk about it again.”
Learn more about RBC Royal Trust.
This list is not exhaustive and is for information purposes only. To ensure that your individual circumstances have been properly accounted for and that action is taken based on the latest information available, it’s crucial you consult with your qualified legal advisor.
Note: For these scenarios, it’s crucial to consult with your qualified legal advisor to ensure a clear understanding of what each attorney can do on your behalf alone, what actions must be taken jointly and how to deal with conflicting instructions.
* In Saskatchewan, there is also the option to appoint attorneys “successively”.
To learn more about the range of responsibilities that an attorney may have to take on, please consult the RBC Royal Trust “Attorney for property duties checklist”.
This list is not exhaustive and provides only general guidelines on giving thought to this area of estate planning and discussing it with family members. To ensure that your individual circumstances have been properly accounted for and that plans accurately reflect your wishes and intentions, it’s crucial you consult with your qualified legal advisor.
Some individuals may find it helpful to view this area of planning not only as a documentation of choices and intentions, but more broadly as a process that includes reflection, choices and conversations. In considering the following questions and points, keep in mind the importance of answering them for yourself, as well as the importance of making the people around you aware of your choices and why you’ve made them. Your appointed attorney should also be kept up to date on your choices and preferences, and needs to know the location of your Power of Attorney document(s), other important documents and the contact information of individuals such as your accountant, lawyer, investment professional, banker and physician.
Consider putting together an inventory document that provides a comprehensive overview of your financial picture. RBC Wealth Management (RBC WM) offers The Family Inventory as a useful guidebook for this purpose.
For more information on eldercare and planning financially for it, please read “Is age but a number?” from the Spring 2018 edition of Perspectives.
This document has been prepared for use by the RBC Wealth Management member companies, RBC Dominion Securities Inc.*, RBC Phillips, Hager & North Investment Counsel Inc., RBC Global Asset Management Inc., Royal Trust Corporation of Canada and The Royal Trust Company (collectively, the “Companies”) and their affiliate, Royal Mutual Funds Inc. (RMFI). *Member – Canada Investor Protection Fund. Each of the Companies, RMFI and Royal Bank of Canada are separate corporate entities which are affiliates. “RBC advisor” refers to Private Bankers who are employees of Royal Bank of Canada and licenced representatives of RMFI, Investment Counsellors who are employees of RBC Phillips, Hager & North Investment Counsel Inc. and the private client division of RBC Global Asset Management Inc., Senior Trust Advisors and Trust Officers who are employees of The Royal Trust Company or Royal Trust Corporation of Canada, or Investment Advisors who are employees of RBC Dominion Securities Inc. In Quebec, financial planning services are provided by RMFI which is licenced as a financial services firm in that province. In the rest of Canada, financial planning services are available through RMFI, Royal Trust Corporation of Canada, The Royal Trust Company, or RBC Dominion Securities Inc. Estate and trust services are provided by Royal Trust Corporation of Canada and The Royal Trust Company. If specific products or services are not offered by one of the Companies, clients may request a referral to another RBC partner. The strategies, advice and technical content in this publication are provided for the general guidance and benefit of our clients, based on information believed to be accurate and complete, but neither the Companies, RMFI, nor Royal Bank of Canada, nor any of its affiliates nor any other person can guarantee accuracy or completeness. This publication is not intended as nor does it constitute tax or legal advice. Readers should consult a qualified legal, tax or other professional advisor when planning to implement a strategy. This will ensure that their individual circumstances have been considered properly and that action is taken on the latest available information. Interest rates, market conditions, tax rules, and other investment factors are subject to change. This information is not investment advice and should only be used in conjunction with a discussion with your RBC advisor. None of the Companies, RMFI, Royal Bank of Canada nor any of its affiliates nor any other person accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. In certain branch locations, one or more of the Companies may carry on business from premises shared with other Royal Bank of Canada affiliates. Notwithstanding this fact, each of the Companies is a separate business and personal information and confidential information relating to client accounts can only be disclosed to other RBC affiliates if required to service your needs, by law or with your consent. Under the RBC Code of Conduct, RBC Privacy Principles and RBC Conflict of Interest Policy confidential information may not be shared between RBC affiliates without a valid reason.
® / TM Trademark(s) of Royal Bank of Canada. RBC Wealth Management is a registered trademark of Royal Bank of Canada. Used under licence. © 2023 Royal Bank of Canada. All rights reserved. Printed in Canada
We want to talk about your financial future.