Planning for incapacity
Incapacity may or may not be part of your aging journey. Still, it is wise to consider some of the difficult issues surrounding any inability to look after yourself. When you are incapacitated, your life is severely affected. You are not able to make or attend to the many decisions that impact your well-being. Those same decisions may also impact those who depend on you, such as your spouse or other family members. As a result, your financial and family affairs, and even your health, may suffer.
During your incapacity, what you need is a person to make decisions for you. Further, you also need that same person to act on your behalf and carry out the decisions they have made. In legal terms, you need a person to act as an agent1 for you during your incapacity. Here is a summary:
Agent for financial affairs
At law, you can appoint an agent to handle your financial affairs. You do this by setting out in a written document (a deed2) the person you want to be your agent. Such a deed allows you to appoint someone to manage your financial affairs on your behalf which can take effect even when you still have capacity and also when you lose capacity. In some provinces the legislation states that an agent loses the authority to act when a person becomes incapacitated unless there is specific wording that indicates that the authority continues even during incapacity. As such, it is very important that you consult with a lawyer to have the document drafted with accurate wording that ensures your agent can act, or continue to act, once you become incapacitated.
Agent for personal care
The idea of having an agent for personal care is a recent advance in our laws and culture. Many of us are now much more aware of our personal care and how it affects our quality of life. As a result, we want greater control over who makes those decisions when we cannot make them. This includes decisions about where you live, what activities you participate in and what medical treatment you receive, to name a few.
You can name a person within a deed to lawfully make personal care decisions for you. In addition, you can give that person direction in the deed on how to make those decisions for you. You may even state when you want to have medical care ended or withheld.
Retirement living considerations
As we grow older, we will likely be forced to examine our living situation and whether it is suitable or appropriate as our health and wellbeing needs change. Many of us put off thinking about this transition, preferring to stick with our current arrangements; but the reality is that advanced aging means we will all likely need extra help. The question is, what degree of help and how should we plan for this phase of our life. Facing these key questions will help each of us determine the most suitable accommodation for our own unique circumstances.
One approach is to think of the later years in terms of three key stages:
- From 65-75: Ideally, you are still active and healthy and enjoying retirement or semi-retirement.
- The late 70s and beyond: Many individuals may start to slow down and experience declining health.
- Additional care: The unfortunate reality for many of us is that we may eventually require more substantial nursing care provided by a long-term care facility.
What are some of the practical (financial and legal) arrangements you can put in place in advance and while you’re in the best position to make decisions? And if you’re an adult child, what can you do to help your parent or parents as they require increasing assistance?
One thing is clear, there is no single ‘best’ living arrangement for aging Canadians. The types of residential housing options cover the full spectrum of care. Beyond remaining at home as an active adult, perhaps with some additional help, these options include:
- Independent living
- Assisted living
- Long-term care (nursing home)
- Continuing care
- Home care
The key difference between independent living and other housing options is the level of assistance offered for daily living activities. If you require round-the-clock help with eating, dressing, and using the bathroom, or require regular medical assistance, other housing options such as assisted living facilities or long-term care (nursing homes) may be a better fit.
In Quebec, the mandate in case of incapacity only takes effect when the incapacity is declared. The mandatary must have the mandate homologated, that is, the court or a notary must confirm the incapacity with the help of a medical assessment. If you have also signed a general power of attorney, it ceases to be valid when you become incapacitated or after the court declares the incapacity. In Quebec, the mandate in case of incapacity should not be confused with the power of attorney. The power of attorney only concerns property, unlike the mandate which can also affect the protection of the person. The general power of attorney is a document by which you authorize a mandatary to perform certain administrative acts or others of greater importance. It can be notarized. The power of attorney will take effect upon your decision and you can terminate it at any time. It ceases to be valid when you become incapacitated or after recognition of the incapacity by the court. It is then that the mandate in case of incapacity takes effect.
Speak to your Advisor about putting the planning pieces in place to ensure your financial and personal care needs are covered as you wish.
For more insight, read this Financial Post article by Sarah Widmeyer, SVP, Head of Wealth Strategies at Richardson Wealth about why it’s vital to have open and honest conversations among family members.
1We are using the term agent as general term for the persons being appointed. Terminology varies among provinces.
2In Quebec, in the mandate in case of incapacity.
More estate planning considerations
Have you reviewed your estate plan recently to ensure it’s up to date and complete? We’ve outlined recommendations for a fulsome plan.