Linda, a widow and mother of five children, began to experience common symptoms of Alzheimer’s disease. She was becoming increasingly forgetful, had difficulty communicating and exhibited frequent changes in mood and behaviour. Unfortunately Linda had become incapable of making her own financial and personal decisions.
Linda had established a Power of Attorney several years back and had named her youngest daughter, Michelle, as attorney for her property and financial affairs. This responsibility only added to the difficult and complex relationship that Michelle had with her four siblings, all of whom were also beneficiaries of Linda’s estate. While everyone agreed that Linda should be placed into a private nursing care home, there was disagreement as to how her long-term care should be financed. One of Michelle’s brothers strongly believed that Linda’s care should be financed from the sale of her $500,000 home. Michelle’s sister was reluctant to sell the home as she had hoped to inherit it in Linda’s Will and argued that Linda’s care should be financed with the income from her investment portfolio. Family arguments became quite heated and Michelle became increasingly overwhelmed about making the right decisions for her mother.
Michelle contacted an RBC Royal Trust Advisor to provide the analysis needed to help her make a decision, and to also serve as an unbiased third party in dealing with her family. A Royal Trust Advisor met with Michelle to discuss all the various services available. Michelle hired RBC Royal Trust to consolidate all of Linda’s assets into one account and prepare an income and expense statement. The analysis indicated that Linda faced a $40,000 per year cash flow shortfall. If the children did not make a decision about selling the home soon, her investment portfolio would likely be depleted within 5 to 10 years, assuming there would be no unexpected expenses or increases in her personal care costs. Based on the presentation to the family, Michelle and her siblings agreed that selling the home soon was the best option for financing their mother’s personal care.
Michelle was grateful to RBC Royal Trust for providing the necessary analysis to help them make the best decision for her mother and limit the family conflict.
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