Alzheimer’s and your finances

A Nielsen study commissioned by Scotiabank found half of Canadians have a will. This figure’s no surprise, as it’s held fairly steady for decades. The study did, however, uncover some surprising stats on powers of attorney for property: Only one-third have them, with 8% admitting they don’t even know what a power of attorney is.

If you haven’t appointed a power of attorney, you should be concerned. Canada’s population is aging and Alzheimer’s is on the rise. According to the Alzheimer’s Society of Canada, an estimated 747,000 Canadians have the disease or a related form of dementia. That number includes 14.9% of Canadians over 65. It’s important to plan for potential incapacity. This can help ensure that your assets are protected.

Recognizing the signs

Here’s a non-exhaustive list of common signs of diminished capacity when it comes to finances:

• appearing unable to process simple concepts and having memory loss;
• appearing unable to appreciate the consequences of decisions;
• refusing to follow appropriate investment advice;
• making decisions that are inconsistent with previously stated investment objectives;
• demonstrating some behaviour that’s out of character (e.g., a frugal person becomes a spendthrift);
• having difficulty understanding important aspects of accounts;
• forgetting about some recent instructions or completed transactions;
• appearing disoriented and/or having trouble communicating; or
• having failing health.

In the event you have advanced mental incapacity and there’s no appointed substitute decision maker, your advisor may need to contact the Public Guardian and Trustee (or provincial equivalent) for direction.

Advance planning

To avoid problems, consult your advisor and prepare a comprehensive estate plan. It isn’t enough to have an up-to-date will. An executor’s authority under a will begins at death, so there’s no authority to act in the event of incapacity. Important decisions about your investments may be delayed without a valid power of attorney appointing a substituted decision maker.

To avoid this, prepare powers of attorney (or other provincial equivalent) for both property and personal care. A continuing or enduring power of attorney for property gives you the opportunity to appoint the substitute decision maker (or makers) of your choice to manage your financial affairs in the event of incapacity.

Elaine Blades is director of Fiduciary Services, Scotia Private Client Group.