What if Dad dies leaving everything to Mom, but Mom has dementia?

What if one parent passes away, leaving the remaining parent as both the executor and the beneficiary? What if that remaining parent has dementia? Does that throw a wrench into the works? Can the remaining parent still inherit the estate?

A parent with dementia doesn't change the dynamics of an estate nearly as much as is commonly thought. I've often come across a puzzling belief that people with dementia can't inherit, but this is completely wrong. In some cases, as in the reader who wrote to me below, there is an assumption that the presence of dementia is going to change everything. This must create immense anxiety and confusion for the family. I'm glad he wrote to me to express his worries and to get clarification.

"My father recently passed away, leaving mom as his Executor. He had been ill and in hospital for a few months; during that time mom moved out of their house and into a senior's residence with dementia care. Her eldest son has the POA. Most of my parents' bank accounts were joint, but he had one account in his own name with around $120,000 in it (his assets are just under 1 million). House, cars etc. are all joint. Will the entire estate have to go to probate, or just that one account? And if it goes into probate and freezes all the joint accounts, what funds remain for my mom to pay rent at her seniors' complex?"

It seems to me that your parents had in fact done some estate planning, which will definitely help you. Your father had put most of his assets in joint names with your mother so that on his death, assets would pass to her by right of survivorship without the need for probate or freezing of accounts, or anything else that would disrupt her life any more than was necessary.

This doesn't all fall apart just because your mother has dementia.

I've noticed many times over the years that families behave as if a person who has dementia has ceased to exist in legal terms. For some reason, families believe that someone with dementia can't (or perhaps, shouldn't) receive an inheritance or even hold onto assets they already own. In many cases I've seen the children of a senior with dementia divide up the senior's money even though the senior is alive and well, though afflicted with dementia.

When I tell these children that they are stealing their parent's money and have no right to it, they are offended and astonished. They say things like "it's not like she is going to spend it" or simply "she doesn't need it" as if the parent had ceased to exist as a legal person. Think about it. If my neighbour across the street who loves my red Mustang decides that I don't need it, is he entitled to take it from me? Of course not. If I had dementia, would he then be entitled to take it from me? Of course not.

The fact that your mother has dementia does not in any way disqualify her as a beneficiary. She can still own assets, even if she needs help to manage them. As someone is acting for her under her Power of Attorney, that person will sign documents on her behalf, receive and deposit funds, change titles, and do all of the things for  your mother that she would otherwise do for herself. The POA might decide how to invest funds, for example, but legally is not allowed to give those funds to anyone else.

The part of this situation that is impacted by your mother's dementia is the fact that your father named her as his executor. Most likely, when the will was made, your father also named an alternate person who would be his executor if your mother could not do the job. That would be standard will planning for a married couple. With any luck at all, the will is worded properly so that your mother (through her POA of course) can renounce the executorship and the alternate executor can step in.

There may be no need for probate at all. Check to see whether that $120,000 account is an RRSP or RRIF. If so, it will name a beneficiary (probably your mother) and if so, probate should not be required.