Powers of attorney and conflicts of interest

Advice to seniors about appointing someone to act under a Power of Attorney often includes a recommendation that the senior not appoint someone who is in, or could be in, a conflict of interest position. I believe that the concept of conflict of interest is not well understood by people trying to make good choices, and is worth looking at a little more closely.

A conflict of interest arises when the person acting as Attorney might have to choose between what is best for the senior he represents and what is best for himself.  The Attorney is bound by law to what is best for the senior, while human nature will tempt him to do what is in his own best interests.

The fact that a person is the senior's spouse or child does not in itself create a conflict of interest, but potential conflicts can arise in families. Seniors should not automatically choose their children to appoint as Attorney.

For example, David appoints his son Roger under his Power of Attorney. Roger has always wanted to buy David's lakeside cottage, though David has repeatedly turned down the offers because he loves the cottage. Once Roger starts acting under David's Power of Attorney, he knows he has the legal authority to sell David's property and could sell it to himself. It's best for David if Roger doesn't buy the cottage because David wants to keep it, but Roger is tempted to do what is best for himself.

It's always considered to be a potential conflict when a senior wants to appoint a paid caregiver or a business partner. Both of these people have a financial connection to the senior which creates the conflict. The caregiver would be responsible both for setting the price of care and paying the care bills. The business partner might be tempted to make a sale or transaction that suited himself better than it suits the senior.

Financial abuse of seniors by those holding Powers of Attorney is widespread. Too many seniors have seen their life savings stolen, lost or mishandled by someone they trusted to look after the funds. Some of these cases could have been avoided by the appointment of a different Attorney.

Free help for seniors to complete benefits applications

I recently came across the Forms Information and Assistance Program that is put on every second Monday in Stony Plain by Family & Community Support Services. This programs helps seniors complete forms and applications for Alberta Seniors Benefit, AISH, OAS, and Capital Region Housing Corporation. I know from personal experience that there are a lot of seniors out there who are not receiving all of the benefits to which they are entitled, and sometimes the problem is the paperwork. If you or a senior in your life would like to book a free appointment for this program, call 780-963-8583.

There are other similar programs to this one in different areas. If anyone reading this post would like to tell us about another, please do so by clicking on the "comment" button.

Seniors fail to claim free benefits from Ottawa

This story in the Financial Post is a few days old now, but still important. It talks about how tens of thousands of seniors are not getting all of the benefits to which they are entitled, simply because they don't know about the benefits and haven't applied. Click here to read the story.

Metro Vancouver's seniors population set to skyrocket: communities grapple with housing dilemma

This article from the Vancouver Sun talks about how the growing senior population is bringing about the need for creative housing solutions. Sounds like the BC towns mentioned here are brainstorming, but I still find their solutions limited. Click here to read the article.

Can those with dementia pre-consent to sex?

This article discusses an issue that balances the right of an individual to refuse to have unwanted sex against giving seniors with dementia their privacy and autonomy. The question is whether a person can be said to have "pre-consented" to having sex simply by the fact that they have always had sex with their spouse. Does this apply when the person is aging and has dementia? As we know, a person with dementia may not even recognize his or her spouse on any particular occasion.

This question is being put before the Supreme Court of Canada. To be, there is only one acceptable answer, though I undertand that it's a complex, emotional question. Nobody should ever have sex they don't fully, willingly consent to having. The idea that the elderly can have "pre-consented" to have sex with someone even though they might now be confused about who the person is, or afraid to refuse, is frightening.

Click here to read the article. I'll be watching for the court decision, which won't be out for a few months, and will let you know what happens.

Marquess of Bath fires all workers over 65

In this story from the UK, the Marquess of Bath has fired every person over the age of 65 who works at the family estate, called Longleat. Coincidentally, next year in the UK they are bringing in a law that would make it illegal to force out older workers on the basis of age alone. To read the story, click here. The attached photo of Longleat (which I visited as a child - fantastic place!) is from that article as well.

Long term care premiums soar

Apparently insurance companies aren't making as much of a profit as they thought they would with long term care policies and are increasing premiums by huge amounts. Click here to read the story from the Wall Street Journal. Would any financial planners reading this like to tell us whether this changes your opinion on the value and importance of this type of policy for your clients?

What is informal trusteeship?

Informal trusteeship is a practical, low-cost way of putting an individual in charge of handling finances for a person who doesn't have the mental capacity to deal with his or her own finances. It's suitable for a person who doesn't have much in the way of assets, but does have income from a government pension or program.

For example, an elderly person who has very few assets but receives CPP and OAS benefits might need an informal trustee just to deal with those benefits. The elderly person doesn't have real estate or investments to be managed so doesn't really need a full court-appointed trustee, and would have trouble affording that. The elderly person just needs someone to help with receiving the government benefits and paying the bills with the benefits.

The federal government programs that allow for informal trusteeship are Canada Pension Plan (CPP), Old Age Security (OAS) and Department of Veteran's Affairs. You would have to contact each one separately. In Alberta, the provincial programs that allow for informal trusteeship are Assured Income for Severely Handicapped (AISH), Alberta Seniors Benefit, and Employment & Immigration. Other provinces allow informal trusteeship for their programs that are similar to these Alberta programs.

Putting an informal trusteeship into place is nothing like putting a court-appointed trusteeship into place. A court application is not required and there is no cost involved. The arrangement is put into place by contacting the government program in question and filling in their requested documents.

However, the responsibilities of the trustee put in charge are very much the same as they apply to the income stream that the trustee manages. The trustee is still managing money on behalf of another person and must act in the best interest of that person. For example, a person who is made an informal trustee may not use the money for his or her own purposes and may not make loans to him/herself with it.

It's important for anyone who is, or is planning to be, an informal trustee to understand the limitations of his or her authority. He or she can only deal with the benefit paid by the government department that has appointed him or her. An informal trustee CANNOT:
- sell the elderly person's home or car
- look after any investments
- look after any bank accounts except the one that receives the benefits
- handle any sums of money (e.g. inheritance, gift, lottery winnings, insurance pay-out) that are payable to the elderly person
- sell or give away the elderly person's personal and household belongings
- sign any contracts on behalf of the elderly person.