May 7, 2021
Pattie Lovett-Reid: Protecting yourself financially from the risks of dementia
Chief Financial Commentator, CTV
Dementia is a challenging disease and has been further complicated by COVID-19. Seniors living in isolation missing out on the socialization and structure to their day has left many feeling anxious and alone.
Recent studies by the Government of Canada found that isolation significantly increased a person's risk of premature death from all causes, in fact it is a risk that rivals smoking, obesity and physical inactivity. Social isolation was associated with about a 50 per cent increase risk of dementia.
The numbers are staggering, according to Statistics Canada 747,000 Canadians are living with Alzheimer's or another form of dementia.
We may be living longer but not necessarily more productively.
For the most part no one likes to talk about dealing with dementia. However, I feel we should discuss setting yourself up for financial success should dementia strike.
Make a will: A will is the foundation of your estate plan. It will allow for your assets to be distributed according to your wishes. If you die without a will in place, you will have died intestate, and that is when the government will step in and distribute your assets according to provincial formula.
Powers of attorney: These are legal documents that allow a designated person to step in and handle your personal and financial affairs in the event you are unable or unwilling to do so. It does not replace your will and can be revoked, if you are capable, under Ontario law. However, a power of attorney can't change your will, not act in your best interest, make decisions after your death, or transfer the power of attorney to someone else.
Joint ownership: In the event something were to happen to one account holder, the other account holder would have access to the funds in a bank account, property or even investments.
Talk to your financial advisor: If you are seeing early signs of dementia or find responding to requests that are more complex or difficult to reason through talk to your advisor. The best time to put a plan in place and designate powers of attorney's is at least five years before you need to execute the plan you have put into place.
Christine Van Cauwenberghe, vice-president of tax and estate planning at IG Wealth Management told me via email, "you should ask your doctor if you now qualify for the Disability Tax Credit if you’re markedly restricted in one of the basic activities of daily living.”
Recently, the federal budget proposed the definition of a disability to include conditions related to mental abilities.
Van Cauwenberghe stated "conditions may progress slowly over a period of time, you may not even realize when you have a reached the point where you qualify, but should ask your doctor in case you are now eligible."
By developing your financial plan "B" today allows you to be in the driver’s seat creating your plan according to your wishes, in the event someone needs to step in and take control of your financial situation tomorrow.