Protecting Your Elderly Loved Ones

As Canada's population continues to age, there is an increasing chance that your parents or elderly loved ones may become frailer, suffer an illness, require medical attention, and fall prey to financial predators. Unfortunately, when it comes to protecting your loved one's interests, many people don't think about it until they need it. So, what can you do to protect your elderly loved ones?

Make a Will

One way in which you can best look after the elderly is first by making sure they have a will completed. It really is the first line of defense, by assuring that if anything should happen to them, their desires for what happens to their things are set in stone. A will determine where their money goes, who their estates go to, who their trustees are, all while determining what will happen with all your assets.

In Ontario, if a parent, for example, passed away without a will, there is an act called the Succession Law Reform Act, which sets out what happens to your assets and who receives those assets. But there is no guarantee that things will be distributed the way the parent had really desired, and this can cause issues and fights among families.

This is why it is highly recommended you have a will made, and if you had one made a decade or two ago, and you have grandchildren or new assets, it is smart to update your will. If you have no family or friends you wish to leave your money or assets to, a will allows you to choose charities, schools, churches or organizations.

If you wish to update a will, the Law Society in the province of Ontario amended the rules to permit you to sign these documents virtually, because of the pandemic. You can't execute them virtually in the form of a digital signature but your lawyer can witness you signing an original document.

Just remember this; you've worked hard your whole life, built wealth, purchased assets, with the intention of leaving something better for the next generation. You don't want someone else to have to figure out what to do with your things should you pass away, which is why you really should consider having a will drafted.

Should I Get a Store-Bought Will Kit or Meet with a Lawyer?

Some stores offer cheap will kits at a greatly discounted price. While they could be better than nothing, they don't adequately allow proper planning to take place, or structuring, nor do they take into account how to minimize taxation, minimize probate fees in the province, nor do they provide the proper and extensive legal advice and experience you would get with a lawyer.

We recommend that even when new couples get together as first-time homebuyers that they simply just do their will then and there, and should anything happen, they are protected, and you can change it as you get older.

What is Probate?

If you pass away and you have money sitting at a bank, the bank is typically going to require that your estate trustees go out and obtain what they call a Certificate of Appointment of Estate Trustee either with or without a will.

Probate is court certification of the documentation of the person that's being appointed that gives them the authority that everyone out there, including the financial institutions, can rely on, and then they can proceed to hand out the assets. That doesn't happen overnight and can be costly and time-consuming.

What is a Power of Attorney?

There are two separate types of power of attorney: power of attorney for property which basically deals with your banking and financials. This is a document that grants people that you designate in there the authority to deal with your assets, typically in the event of an incapacity or at other discretion as you may choose. It continues in the event of that incapacity.

The other one's a power of attorney for personal care. That's medical decisions. So in the province of Ontario, you can only designate somebody to make medical decisions on your behalf if you have lost capacity. So, if you still have the capacity you're going to have to make all your own medical decisions when you end up at a hospital. For example; you get in a car accident and you break your arm and you go to the hospital you're going to have to make your own medical decisions.

But if, for example, you get into a car accident, you get knocked into a coma, and unfortunately, your loved ones aren't maybe on the same bank accounts or they don't own all the assets that you own. Without a power of attorney for personal care, they would have no way of dealing with those assets other than to make a court application to be appointed as their guardian.

Power of attorney is a fairly simple document. A lawyer will put that in place naming loved ones that you want to have on there handling things in the event that you're not able to and then they can do so.

Parents can select their children without their knowledge to be their power of attorney, but we recommend they have a conversation with each other first.

Have Conversations Dedicated to These Topics

We recommend that families with elderly loved ones sit down and have family meetings about these sorts of estate planning things, or discuss business succession, or real estate properties that are perhaps are transferring to certain individuals. And discuss certain bank accounts or assets that they want to have transferred over. Having a good lawyer will allow you to set up a tax-effective plan for how you and your lawyer can do that.

You want to set it up such that the people you leave behind aren't all fighting. Because sadly what happens sometimes is that there is a poorly structured plan that causes disagreement and fierce debate and arguments. Then its results in a whole bunch of family members who don't ever want to see each other again because it's an emotional time for everybody and that's the last thing you want.

Predatory Salespeople

You really need to look out for predatory salespeople for your elderly loved ones. Too often we see the elderly being sold things they don't need, like water softeners or blue light filters, furnaces, or hot water tanks, all with liens on them. Instead of buying things they actually need, they are pressured and lied to and they are stuck with having things that are lease to own.

In real estate, we come often to view an estate to sell it after the passing of the owner. Then we notice the property has a bunch of liens on it. We're seeing this commonly with things like furnaces, or hot water tanks. The salespeople are more or less predators taking advantage of people that really should have had a power attorney in place.

The predatory salespeople would have gained, say, $150 a month on each item. Multiply this by several items, and your loved one could have been essentially robbed of tens or hundreds of thousands of dollars over a period of time.

Liens are a legal right against assets that are used as collateral to satisfy a debt. If they aren't paid for, the item can be seized back as well, meaning your loved one could have paid $20,000 for a $5,000 item over a period of time, and the item doesn't actually belong with the home until fully paid off.

Protecting From Predatory Salespeople

Begin a dialogue openly with your elderly loved ones and discuss potential issues and help them become more aware of the dangers. Teach them what red flags to watch out for, such as high-pressure sales tactics, unsolicited offers of help, or calls from strangers. You can also help them create a buddy system with a trusted friend or relative, so they have someone to check in with regularly and who can help keep an eye on them.

You can also help protect your loved ones by being vigilant yourself. Keep an eye out for any suspicious activity or people around them, and don't be afraid to question any offers that seem too good to be true. If you do suspect something is amiss, report it to authorities immediately.