Changes in laws affecting seniors over the last 50 years

My latest column in the Spring issue of News & Views, the magazine of the Alberta Retired Teachers' Association (ARTA) is now out. As this year marks the 50th anniversary of ARTA, I was asked to write about how legal issues for seniors have changed over the last 50 years. So in this article I cover planning for incapacity, powers of attorney, personal directives, grandparents' rights and changes to the Alberta Wills and Succession Act that may require grandparents raising grandchildren to support those grandchildren in their wills. Lots of changes to talk about! Click here and scroll down to page 8.

The basic estate planning documents that everybody needs

The term "estate planning" sometimes makes people think of millionaires who live behind wrought iron gates with a butler at the door. But all it really means is that you've put plans in place to deal with your eventual passing and for the possibility of losing your mental capacity. Estate planning isn't just for the wealthy. Everyone with a family needs to think about estate planning.

Most people know they need a will, even though a good half of Canadian adults don't have one. Even with a valid will in place, you haven't fully prepared yourself to protect your family and your assets. Your will does nothing to help you or your loved ones if you are alive but unable to make decisions due to dementia, illness or injury.

Here are the basic documents that everybody should have:

1.  A valid will that is kept up to date to reflect changes in your life. The will should be prepared as part of a bigger estate planning picture that takes into consideration your joint property, your designated beneficiaries on policies and plans, your insurance coverage and of course your plans for your family members left behind. All of these things must be co-ordinated so that your documents don't contradict each other or create confusion that will end up being sorted out by the courts.

2.  An Enduring Power of Attorney, which is also called a Continuing Power of Attorney, or a Power of Attorney for Property. This document allows you to appoint someone to make financial decisions for you if you should be unable to do so for yourself. Most commonly this document is used when a person develops dementia, but it may also be used if you should be severely injured in an accident or become very ill.

3.  An Advance Health Care Directive, also called a Personal Directive or Health Care Proxy. The person you name in this document will be able to make decisions for you about medical issues, health care and personal issues. The document should also contain your instructions on end-of-life decisions.

The above three documents are usually sufficient for individuals whose estates are not complicated. Business owners may find that they need additional estate planning documents, such as:

4.  Shareholders' Agreement, sometimes called a buy/sell agreement. While not solely an estate planning document, a shareholders' agreement should address what is to happen with shares of a privately held company if the owner should pass away or lose mental capacity.

5.  Life insurance to fund the buy/sell agreement.

6.  A written business succession plan that sets out who is to take over the family business, and how that plan is to be implemented financially.

7.  A holding company may be needed to funnel excess cash out of an operating company to improve the potential tax situation.

Individuals differ, and so do their estate-planning needs. You may find that you have specific goals that will require additional documents to be made. For example, you may wish to leave a Memorandum of Personal Effects that gives certain items to specific people on your passing. You may wish to leave a Letter to Executor that leaves personal messages, gives further explanations or expresses wishes to your family members.

Start by making sure that you have the first three documents in place and keep them up to date. An experienced estate planning lawyer can help you decide what else you might need or want to protect your loved ones.

Watch for my article on Power of Attorney in Caregiver Solutions magazine

The latest issue (winter 2012) of Caregiver Solutions Magazine carries a feature-length article of mine called "Their power of attorney names you...now what?" In the article, I talk about how to use a power of attorney on behalf of another person efficiently and without getting into trouble. In addition to the main article, I give 10 tips for acting under the POA, and 10 tips for dealing with the paperwork. So far, an electronic version of the article isn't available, so if you'd like to read it, you should check out newsstands for the magazine pictured below, or contact the magazine at www.caregiversolutions.ca.

Mom's in a nursing home; can we sell her house and divide the money?

Do you believe that other people should be allowed to take your money away from you - and I'm talking hundreds of thousands of dollars - because you are old and they think you don't need it? Of course not! So why do so many people think they can help themselves to their parents' estates without permission before the parents even pass away?

Here is a note I recently received from a reader:

"My mother has just been panelled to a Nursing Home. We are 5 children and one is her POA, and executor. Her will says that the house is to be sold and divided between the 5 children. Is it not best to sell the house right away and divide the money between the children, rather than keep it in a seperate account till she passes?"

Would it be best to sell the house and divide the money right away? Best for whom? And why are you following the will of someone who isn't dead?

This is a subject that I've been asked about many times over the years, and I have to confess that it irritates me no end. Your mother's will says that the five of you are to inherit the proceeds of the sale of the house after she passes away.  That's what wills do; they talk about what happens to an estate after a person dies. She hasn't passed away. Therefore, no, you can't have the money.

The executor has zero power to do anything at all while your mother is alive. The will has no effect while your mother is alive. So nobody gets to act as her executor yet. Forget the executor and the will while your mother is still alive. I hope I've made this point clearly enough, not just for you but for all of the other readers who ask me this question repeatedly.

Now let's look at the attorney acting under the Power of Attorney (POA). Has the POA been brought into effect? Don't assume that because your mother is going to a nursing home that the POA is automatically in effect. Going into a home likely has no effect on it at all. The person named in the document should read it carefully to see what has to happen to spring it into effect. In many provinces that means having a doctor sign a declaration of incapacity.

Once the attorney under the POA has properly sprung the document into effect, the attorney has to do what is in the best interest of your mother. Maybe this means selling the house. If your mother is never going to be able to live there again, then perhaps that's the best thing to do financially. However - and this point is NOT to be overlooked - the sale proceeds of the house must be invested for your mother. The attorney under the POA does not have the legal right to distribute the funds to you five. He or she risks financial penalties, removal from the job of POA and perhaps even jail time for that, depending on the circumstances.

Rarely do posts move me to use quite as much underlining as I've used in this one, but this topic is so important. Over and over again, I see children with an over-inflated sense of entitlement taking money that doesn't belong to them on the philosophy that "one day it will be theirs". That day hasn't arrived yet.

Michigan woman arrrested for embezzling father's funds using Power of Attorney

Here's an example of exactly what not to do when you're appointed under a Power of Attorney. Renee Bullock of Michigan has been arrested and accused of embezzling $140,000 of her father's funds while acting under her father's Power of Attorney. Her father was in a nursing home, and she spent the money on vehicles, tanning and nail salons rather than pay the bills at the nursing home. Honestly, how could anyone think that situation would go undetected? Click here to read more about this story.

I notice from reading the news story that one of the things Ms. Bullock is accused of doing with her father's money is paying back payday loans. I wonder whether her father was aware that she was having money problems. It's never a good idea to appoint someone with money shortages or money management problems as your Power of Attorney. The fact that the person you appoint is one of your children will not change the fact that they will be tempted to use your money for the things they can't afford, as this story illustrates. Elder financial abuse by a family member is, unfortunately, very common.

Although this story is American, the same things happen in Canada. Our criminal law includes a specific offense for those who steal money using a Power of Attorney, as it is considered a position of trust.

Fair and honest is never enough

I'm  attaching a link to an article from www.allaboutestates.ca, one of my favourite blogs. It explains why an executor or attorney under a power of attorney must keep good records. If you're one of the many executors or attorneys who is somewhat careless in record-keeping, be sure to check out this article for a bit of incentive. Click here to read the article.

Zsa Zsa's case shows importance of naming a fiduciary

I've always believed that there is something we can learn about our own estate planning by looking at the unfortunate situations of those who are famous and in the news. Zsa Zsa Gabor is one such person whose estate planning woes are broadcast for everyone to see. Those of us who are not celebrities have the same issues and concerns; they are just not as visible to the world.

I've attached a link here to a story from the American Academy of Estate Planning Lawyers that talks about Ms. Gabor's case. Click here to read it. Because the story is American, you'll find the language a little different. A "fiduciary" as referred to in this article refers to a trustee and someone acting under a Power of Attorney. The overall message? Your estate planning should include planning for disability, not just for your eventual death, and that you need to be pretty darn careful about who you put in charge.

Preventing financial abuse by power of attorney

The general public is gradually becoming aware that financial abuse of seniors is rampant, and growing. We'd like to think that it's as simple as guarding our parents from door-to-door scam artists, but it's not; much of the abuse happens at the hands of family members.

Front and centre in this whole debate is the Enduring Power of Attorney. While a useful tool for seniors, it can become the instrument of financial abuse in the hands of the wrong person. A pair of recent articles in www.advisor.ca address this situation. The article suggests that a trusted, long-term financial advisor can help prevent abuse of a senior by a family member mis-using a power of attorney. I tend to agree. It's an interesting read (and I don't just say that because I'm quoted in the articles!) so click on the links below if you'd like to check out the articles.

Click here for part I

Click here for part II

Can my health care PoA be "durable"?

Here's another good reader question. This one is asking about whether health care directives can be "durable" powers of attorney. I find that people get confused about how the concept of durability affects a document, so I'd like to answer the question here for everyone to read. Here's the question:

"Can any type of power of attorney document be durable? Like can I have a Durable Heath Care Power of Attorney Form?"

There are two basic kinds of documents that name someone to act for another person when that person loses capacity to make his or her own decisions. One is a document that gives someone - called the attorney - the authority to make decisions about money and property. Most of the time that document is simply called a Power of Attorney, though in some places it's also called Power of Attorney for Property.

The other kind of document is one that gives someone the authority to act under health, medical or person decisions. This goes by many names, including Personal Directive, Health Care Proxy, Advance Health Care Directive and Power of Attorney for Health Care. This is the type that the reader's question addresses.

The basic reason for making either of these documents is to have someone of your choice lined up to make decisions if you can't do that any more due to loss of mental capacity. The word "durable", also called "enduring" or "continuing", means that the document endures through your loss of capacity, should it happen. That's the whole point of it - to have something that covers you in that situation.

In other words, yes, these documents can and should be "durable".

A person who acts under a standard health care document ONLY does so when the person can't speak for himself or herself, therefore that document must be durable. If the document wasn't "durable" and collapsed when you lost capacity, it would be little more than a waste of paper.

Should parents be forced to protect themselves against financial abuse by their kids?

A recent editorial in the Canadian Medical Association Journal has made some suggestions for changes they'd like to see implemented across the country to help combat elder abuse. Recently I read a very good article in www.50plus.com that discusses the suggested changes. Click here if you'd like to read that article.

One of the points made in the article is that locking up those who abuse seniors is not enough, and that the underlying causes of the abuse must be addressed. I agree with both parts of that statement, but my experience with elders who have been (or are currently being) financially abused makes me believe that there is still more to the puzzle of preventing elder financial abuse.

Here's the issue. Many older people either know or suspect that they are being financially abused by their kids who are acting under powers of attorney. But they wouldn't call the police or confront the child or in any other way even suggest that one of their own children could be doing such a terrible thing. They explain it away in terms of the child having lost everything in a divorce, or having lost his or her job, or simply being the baby of the family. In other words, they are so busy parenting this supposedly adult person that they put the child's welfare ahead of their own.

I have personally spoken with elderly persons whose children, grandchildren, nieces or nephews have drained the older person's accounts, leaving the older person with little or no resources to live on. Locking up abusers isn't an option because these abusers won't ever be accused; their parents, grandparents, aunt or uncle will never, ever, speak out publicly against them.

I'm a parent. I get the concept of parents helping out the kids. But parents who draw up legal documents placing the kids in charge of the money are simply not willing to include clauses in the documents to help reduce the possibility of financial abuse. They feel that including these clauses would insult the child or send a message of mistrust.

This seems overly selfless to me. I would not want to be 85 years old and living on public pensions because my child stole my life savings, and I didn't prevent it because I didn't want to insult her.

My perspective, not surprisingly, is about what the legal profession can do. I've had so many conversations where I've tried to introduce checks and balances into power of attorney documents, only to have the parent refuse to even consider the possibility that a child could misbehave.

My son/daughter would never do that, they say. Sometimes they're right. Other times they underestimate the lure of easy money when the child has lost a job, or has a gambling addiction, has a spouse applying pressure, or simply feels entitled.

I suggest to the parent that they include a clause compelling a child acting under a power of attorney to give a full financial accounting to the other kids once a year. I suggest that the document direct that anyone who acts as power of attorney and is found to have taken money should forfeit that amount of money from their inheritance. I suggest that they use a trust company as a co-power of attorney to provide expertise and a second set of eyes.

Once I say the clauses are optional, the parent opts out.

Perhaps we as lawyers need to build non-optional clauses into our power of attorney documents. Maybe we need to insist that clients protect themselves as best they can by refusing to prepare powers of attorney that don't contain safeguards. Can this be done? Should it be done? We as lawyers have to let the clients choose their own paths, but are we doing enough to make clients aware of the dangers of signing powers of attorney documents that don't contain any safeguards?

Insisting on preparing only those documents that contemplate a child committing elder financial abuse would be a major sea-change for the legal profession, but we all need to contribute what we can to the solution.

10 ideas for reducing stress when looking after an aging parent

Acting on behalf of aging parents is well known to be stressful. From time to time, you will have to take steps on behalf of your parent that are in the best interest of the parent, but not what the parent wants to have happen. These are things like taking your parent to a doctor for a mental assessment, taking away the car keys or credit card, or hiring a caregiver.

The steps that are against your parent's wishes are the most stressful of all. And not just for you. Think about what it must feel like to be the parent in these situations. Your parent may be distressed, anxious or disoriented, as well as somewhat miffed at you for not doing what you're told.

Here are 10 ideas for keeping your parent's anxiety - as well as your own - to a minimum:

1.  Involve your parent in the decision-making process to the extent that he or she can handle. This level of involvement is different for everyone. While your parent might not be able to handle the documentation and financial transactions that are part of the sale of a home, he or she may still be perfectly capable of deciding which personal items in the home he or she wants to keep.

2.  Keep your parent and your siblings informed as to steps that you have taken on your parent's behalf. Proactively giving out information is going to prevent you from getting telephone calls and email messages constantly and having to repeat the same information to several people. For example, if you had said that you would contact an estate-planning lawyer on behalf of your parent, let your siblings know that you've set up an appointment.  As your parent is the focus of the situation, you should keep him or her up to date personally if at all possible.

3.  Find efficient ways to communicate with your family as a group. Set up a distribution list on your email that includes all immediate family members so that you can send one message to all of them with one click. Or set up a Facebook page or web page for your family so that you can post information that they can access when they have time. If you don't want to use your computer as your main means of communication, set up a telephone-tree arrangement in which you ask each person you call to call two or three others and pass your message along.

4.  While you are dealing with your parent, either privately or in the company of advisors or family members, be professional and calm. If you are an emotional wreck, your distress will rub off on your parent. This will only make things worse, as your parent could be frightened about matters if you cry or break down every time estate planning or medical appointments are mentioned. He or she will wonder what terribly upsetting information you're hiding. If your parent is confused on any details, your distress will cause him or her to give the most negative interpretation possible to the issue.

5.  If staying calm is impossible, you need to take a break. If there is nobody in your family who can help you with caring for your parents, even if it's only for a weekend, you might look into hiring a caregiver for a portion of each day, or for a certain day of each week. Also consider other living arrangements for your parent that offer more support.  If you find that you are always exhausted, that you are catching numerous colds each year, or that you are depressed, it could be that you are over-doing it and need some relief.

6.  If you are acting on behalf of your parent on financial matters, make sure that anyone who becomes involved, such as appraisers, realtors, accountants, bankers and lawyers, know that they should contact you directly and not your parent.  Give each person a copy of the document that gives you legal authority. This isn't so that you can hide things from your parent; this is so that your parent doesn't have strangers calling him or her to ask private financial information or to talk about unknown transactions. If your parent were capable of handling that situation, you wouldn't be involved in the first place.

7.  If your parent asks you questions, answer them. Help your parent undestand what you are doing and why you are doing it. When he or she wants to see documents, even if it's for the tenth time, show the documents. Write down information such as upcoming appointments on a calendar and display it prominently, such as on the front of the fridge where you parent will find it.

8.  Make sure that bank statements, court documents, receipts and correspondence are kept in an orderly, accessible place. Chaos isn't helpful.

9.  Listen to your parent if he or she wants to talk about his or her wishes. This could be wishes about living arrangements, or about distribution under your parent's will, or even about what your parent wants to do next week. You may not always be able to carry out those wishes, but you should still know what your parent would like to see happen. Having someone listen carefully and take your parent seriously can have a very soothing effect.  If you say something like "Why should I listen? You're only going to forget what you said and tell me again tomorrow", you are only going to upset your parent and increase everyone's stress level.

10.  Keep up with the requirements of your legal authority to act on behalf of your parent. For example, if you are going to be required to give a legal accounting of the finances one day, try to keep current with the ledgers and books. Trying to put together a couple of years' worth of financial records on a deadline is unpleasant and stressful. Look into getting book-keeping software that will keep things straight for you.

Can a house be sold when one joint owner has lost capacity?

What happens when a husband and wife own a house jointly and one of them has lost mental and physical capacity? Can the house be sold? I'd like to share this reader's question with all of you because it asks about a very common situation that many of you will recognize.

"My dad was diagnosed with Alzheimer's disease and recently suffered a stroke.  He does not have a POA set up.  My parents have joint tenancy of their house in Ontario.  Is it true that we cannot sell the house to fund his nursing home expenses?"

 

The fact that you're asking whether "it's true" tells me that someone has already advised you that the house can't be sold. I have no idea whether that information came from a lawyer, realtor or just a friend, but I agree with them. The house can't be sold based on today's facts, but this can be fixed.

 

The fact that the house is held in joint tenancy by your father and mother means that the house can't be sold without signatures by both of them. It sounds as if your mother is capable of signing documents and is willing to do so, but she is only one half of the owners.

 

The question is what to do about getting your father's signature. From what you've said, he is not capable of understanding legal documents. This is not surprising given that he has Alzheimer's disease as well as the after-effects of a stroke. He cannot and should not be asked to sign anything. If he isn't capable himself, we have to look at whether anyone has the legal right to sign on his behalf.

 

Many people seem to think that a spouse can automatically sign things on behalf of the other spouse in difficult situations like this, but they are completely wrong.

 

The best solution at this point would be to use a Power of Attorney. If properly drafted, your father's chosen representative could use that document to give your father's consent for him, and to sign for him. However, you've already said that your father didn't set up a Power of Attorney, so that option is out.

 

There is another option. Someone can apply to the court to be appointed as your father's trustee. This would give someone the right to act on behalf of your father, with similar rights and responsibilities as that person would have under a Power of Attorney. Obviously going through this procedure is going to take longer and be more costly than simply using a Power of Attorney but in the absence of your father's planning, it's likely the best option.

 

It's essential that when you or your mother make this application to the court that you ensure that the power to sell real estate is included. It's not automatic in all jurisdictions.

 

If you need help getting started, any lawyer who does estate planning should be able to work with you. If you want to look into doing it yourself, you could always check out my book called Protect Your Elderly Parents: Become Your Parent's Guardian or Trustee.

 

 

 

 

 

 

 

 

 

Putting a cork in old world practices

One of my favourite legal blogs, http://www.allaboutestates.ca/, has a new post that talks about what happens in Ontario when a husband passes away leaving his assets in such a way that his surviving wife doesn't have enough to live on. Specifically, it addresses how the wife (in this case, but could be the husband in other cases) can make an advantageous election under Ontario's Family Law Act. Click here to read the article.

Don't stop at having a will - plan for incapacity as well

This week I'm travelling across the western and central part of the province, participating in learning sessions with bank branch staff and meeting with clients to talk about estate planning. I've been surprised to find that although many clients have wills, so far not a single one has an Enduring Power of Attorney and Health Care Directive in place.

This worries me. A will is only one part of estate planning. Certainly it's a major part, but on it's own, a will isn't going to help you meet all of the challenges you and your family may face down the road. Planning for a possible loss of mental capacity is essential. It's no less important than your will, as it fills a completely different need than does your will.

Almost all of us know of someone - a relative, neighbour or friend - who has experienced a loss of mental capacity because of aging, illness or accident. One client I met recently has told me that his aging father's dementia quickly caused personality changes. The father is now suspicious and angry (perhaps frightened at what is happening as well) and lashes out physically and verbally. The client's mother is upset and exhausted. The client is anxious to help but since there is neither a Power of Attorney nor a Health Care Directive in place, he has no legal authority to do anything to help his parents unless he applies to the court.

Having a will in place doesn't help an individual in this unfortunate position, because a will doesn't kick in until a person dies. Imagine seeing your parents going through something so upsetting, and being helpless to act without the cost and delay of asking a judge to grant you permission to take control of your parent's affairs. Or. imagine that you're the one experiencing loss of capacity, and your children have to try to deal with it without you having preparing any documents to help them. This is definitely doing things the hard way.

If you are thinking about having a will prepared, I urge you to have the two documents that deal with mental incapacity - the Power of Attorney to deal with finances and a Health Care Directive to deal with medical decisions  - done at the same time. And if you already have a will, maybe it's time to dust it off, bring it up to date and have your incapacity documents prepared as well.

Don't leave this very important area of planning to chance. None of us knows what will happen in the future, but given the number of individuals who experience a loss of mental capacity, it's a risk worth planning around.

Mom's showing signs of dementia, should I get power of attorney for her?

All of us whose parents have reached a certain age notice when our parents begin to show the early signs of memory loss or disorientation. It may be distressing or alarming, but no matter how we feel about it, we ask ourselves what we are supposed to do when this happens. A reader recently asked me the following question:
"My mother has me as an executor in her will. She is showing signs of senility. Should I consider getting a power of attorney for my mom now before things get worse? My dad is even older, but not showing signs of senility."

The parents in this family are lucky that they have a child who is alert to changes and willing to offer the help necessary. The fact that this child is the executor is not relevant to the question, except that the executor appointment shows that the parents trust the child to deal with legal matters.

Yes, I believe that these parents should have powers of attorney documents put into place, assuming they are still able to understand and sign them. The type of document needed is often called "enduring" or "continuing", or "power of attorney for property". This type of power of attorney, unlike the regular business power of attorney, is designed to last or continue even though its maker might lose mental capacity after the document is made.

The reader mentions that the father seems not to have any signs of incapacity. I would recommend that both parents prepare documents now and not wait until the father also begins to lose his capacity. I also recommend that the parents consider signing health care directives to put someone in charge of medical and personal decisions should that become necessary.

A question that will have to be addressed is whether the power of attorney document is to come into effect immediately or to come into effect at a future date. The future date is the date that the parent loses mental capacity. Often when a parent is already demonstrating signs of memory loss, the best option is to have the document come into effect right away. In this reader's situation, perhaps the mother's power of attorney should come into effect immediately but the father's document should come into effect in the future if he should need it. This is something that can be decided between the parents and their lawyer at the time the documents are prepared.

A significant issue addressed in this reader's question is that of acting now before things get worse. Typically, seniors with dementia or Alzheimer's disease do deteriorate (remember I'm a lawyer, not a doctor, and I'm speaking only from my personal observations). Therefore, if you wait too long to act, the opportunity to have legal documents prepared may well be lost. A person must have mental capacity to sign legal documents. Capacity doesn't have to be perfect, and most seniors who are in the early stages of deterioration are still capable of signing documents.

Should seniors see a lawyer to have wills or powers of attorney prepared, the lawyer will assess the senior for capacity. An experienced lawyer will know that a person  who is beginning to demonstrate incapacity will have good days and bad days, and will do everything she can to maximize the senior's likelihood of having a good day. For example, the lawyer might meet the senior at the senior's home rather than asking the senior to come downtown, which could be disorienting.

It's clear that the child in this question understands the importance of a power of attorney. It also sounds like he or she is willing to act as the attorney in that document. However, it's essential to remember that whether the document is prepared and the choice of attorney are decisions that belong to the parent. The child can raise the subject and provide practical help like a ride to the lawyer's office, but ultimately it's up to the parents to sign or not sign documents.

The parents might choose someone else to act under the power of attorney, so the reader should be prepared for that.

Despite the fact that time becomes the enemy once incapacity begins to emerge, try not to rush elderly parents into specific decisions. Rushing them often results in nothing but upsetting or frightening them, so be patient.

If you have Power of Attorney you don't need a joint account

Powers of Attorney continue to be poorly understood by the people who are forced to rely on them. I was reminded of this over the weekend when I spent some time talking with someone who couldn't understand why his parents' bank wouldn't let him use his parents' Power of Attorney to put his name on his parents' accounts as a joint owner.

My first thought when hearing about this scenario was that if you have a Power of Attorney you already have full access to the account. You can already do everything you need to do, such as pay bills, deposit money, roll over investments and obtain paperwork. So why would you need to be added as a joint account holder?

The big difference between having Power of Attorney access to the account and joint owner access to the account is ownership. When using a Power of Attorney you are supposed to be using the account to carry out financial transactions to benefit your parents, and you don't own the asset. When you add your name as a joint account holder, you are basically giving the money to yourself as all joint owners own the funds. That's hardly in your parents' best interest, is it?

A Power of Attorney doesn't give you the right to take assets for yourself. In fact that's the very opposite of what a Power of Attorney does.

Of course the bank isn't going to allow you to use a Power of Attorney to give your parents' money to yourself. Given the epidemic of elder financial abuse, I applaud the bank for being vigilant and knowing the limits of a Power of Attorney document. I'm sure that in this case there was no fraudulent intent by the child holding the Power of Attorney, but the bank doesn't know that, and was right to refuse the request.

At this point in the conversation, the child holding the Power of Attorney protests that he or she only wants to be added to the account to help the parents with financial transactions. But as I said at the beginning, the Power of Attorney does that for you.

I have heard of a growing movement among lawyers to suggest to their clients that they include a certain clause in their Powers of Attorney. The clause would say that the person they are naming under the Power of Attorney would not be able to use the document until they had spent an hour with a lawyer learning about what they could and could not do. I'm completely in favour of that.

Caregivers can do much to help elderly manage their money

This article from the National Post talks about specific financial steps a person can take to help a senior they might be looking after. Although the article - which has great tips - doesn't talk about Power of Attorney, some of the ideas in the article might require the helper to have power of attorney, depending on how much help the senior needs. Check it out by clicking here.

Attached photo from Mario Tama/Getty Images.

Despicable son gets 10 years for ripping off Mom using Power of Attorney

Having just posted a story about how kids pay for the parents' lack of planning, I'm now going to share with you a story about how a parent paid for trusting her own son. Click here to read the story.

You wouldn't think trusting your own kids would be such a devastating mistake, would you?

In my seminars I always talk about true situations in which parents have appointed kids who never should have been allowed anywhere near Mom or Dad's finances. How do these kids get appointed in legal documents anyway? The parents sometimes don't want to hear or believe anything negative about their own children so they go ahead and appoint them anyway. Sometimes it's pressure from the kids. Sometimes parents think it's the law that they must appoint their children. And then there are those - and there are lots of them - who don't really want the kids in charge but are afraid of offending them if they choose someone else under their Power of Attorney.

I certainly don't mean that the poor mother in this story deserved what she got for appointing her son. It's never the parent's fault if a child steals them blind. That responsibility lies squarely on the child, and in this case I'm glad this horrendous man was sentenced to ten years in jail for what he did to his mom.

But do what you can to protect yourself! Any parent who is thinking of making a Power of Attorney and appointing one or more of the kids should think carefully before doing so. Try to assess your child as realistically as possible (I'm a parent too; I know that's hard to do). Try to put the "he'd never take my money; he's my son" thinking aside and assess the situation more like hiring a person for a job. For example, ask yourself some questions about the child you're thinking of appointing. How has the child dealt with money during his or her life? What is his or her current financial status, and how secure is that status? Is the child always asking you for money? Does he or she have a steady income? Has he or she ever been involved in fraud or shady deals? Is he or she a spendthrift?

Asking these questions won't protect every trusting parent, but I certainly hope reading this post will prevent even one person from finding himself or herself penniless at the hands of a greedy child.

My neighbour is moving - how kids pay for the parents' lack of planning

One of my favourite Canadian blogs is http://www.allaboutestates.ca/ . Today they have a post by Paul Fensom that illustrates what can happen when someone fails to do any estate planning at all. It's a sad story but not at all uncommon. The daughter is paying dearly for her Dad's lack of planning. My guess is that the father felt his affairs were so simple, he didn't need to plan. In any event, click here to read the article. I hope you'll take away from it a realization that all of us need to protect our families by planning ahead.

Estate planning: the power behind a power of attorney

This article from yahoo.com talks about the importance of having an Enduring Power of Attorney as part of your estate plan. it gives tips on how to successfully act as attorney. It also talks about how Scotia Private Client Group can help people with their powers of attorney, which of course makes me happy, since I work there! Click here to read the article.