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.

Leaving your estate to someone you have never met

Many people assume that they can leave their estates to anyone they choose. This is only true to an extent. The right to dispose of your estate as you see fit is called testamentary freedom, and it was the issue highlighted in the case of Ray Fulk, who left his estate to two television stars he had never met.

To read about Mr. Fulk's story, click here to read an article from www.allaboutestates.ca.

The bottom line is Mr. Fulk's case is that if you have taken care of all of your responsibilities (for example, your spouse and minor children) and if you have the mental capacity to make a will, then you can leave your estate to whomever you choose. While this is an American case, I suggest that the law on this issue is the same here in Canada.

I like this case because it underlines the fact that even if your wishes expressed in your will are a bit unusual, and even if they are not what others might have thought to do, they can still be valid wishes.

Make sure Mom knows when you visit

The recent BC case of Moore v. Drummond had a surprising result that may cause some uncertainty for lawyers and executors. The case revolves around the death of 98-year-old Dorothy Drummond. She disinherited her only son, Bruce, for not visiting or calling her for 50 years. However, there was evidence that he had visited her, and phone records showed that he called her at least once or twice every month. There were other issues with Mrs. Drummond's capacity as well, and Bruce challenged the will based on lack of capacity. However, the will was upheld by the court.

Click here to read a very good article about this case by lawyer Charles Ticker in www.advocatedaily.com.

Near the conclusion of the article, Mr. Ticker says that "this case emphasizes what I always tell my clients: you never know what a trial judge is going to do and there is no such thing as a sure winner." I couldn't agree more. Normally we give our best predictions based on precedent - what other judges have said in similiar circumstances where the law is the same. This case throws in a bit of a wrinkle.

Weak claim against the estate could cost you big time

"Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation". So said Ontario's Court of Appeal in the case of Smith Estate v. Rotstein earlier this year.

In that case, a woman challenged her mother's will on the basis that the deceased lacked testamentary capacity (i.e. didn't know what she was signing) and was unduly influenced into making the will. The woman's brother was the executor and was forced to defend the will. By the time the case made it through two levels of court, his legal bills were over $700,000.

The judge said that there was so little evidence supporting the woman's claim that she should never have brought the case in the first place. And if she had brought the case in good faith, she should have dropped it early on once she saw all of the evidence. However, the woman stubbornly carried on with the lawsuit, apparently thinking that the costs wouldn't matter because the estate would pay them.

She had a nasty surprise. The judge made her responsible for the brother's costs of $700,000, as well as $30,000 in disbursements. Ouch!

This should be a major heads-up to anyone who is thinking about bringing a weak lawsuit against an estate for emotional reasons. Yes, it's tempting to make the executor stop and pay attention to your issues. Yes, it's tempting to vent your emotions this way. And yes, you may even have heard that when estates end up in court, the estate pays all the lawyers. But this case makes it clear that pointless litigation just for spite won't be tolerated. The free ride for will contests is over. Unless there is strong evidence to back up your claim, don't count on the estate paying your lawyer.

Holographic wills and capacity

My friends over at www.allaboutestates.ca have posted something really interesting that some of you will recognize. An elderly parent who lacks mental capacity keeps making handwritten (or "holographic") wills. Holographic wills are legal in most parts of Canada, assuming that the parent has the mental ability to make a will. Is your parent doing this? And if so, how are you dealing with those wills? Click here to read an article that gives some advice on what to do.

"I'm contesting the will" - real threat or just bluster?

I hear a lot of talk from beneficiaries about contesting of wills. The idea is tossed out as a threat by individuals who are unhappily surprised by not getting what they had hoped for under a deceased's will. But is it a realistic threat? The impression I get is that many people believe that anyone who doesn't like a will can simply demand that the will be changed to suit them.

This is not how it works.

Contesting a will means applying to the appropriate court to have a will struck down as being invalid. You would have to prove your case with sufficient relevant evidence. No judge in the country is going to rubber-stamp your request just because that's what you want.

Though each case and each will is different, the general concepts behind contesting a will are the same everywhere. Each case falls within these general headings. They are:
- undue influence
- lack of mental capacity
- problems with the will document itself, such as improper witnessing, lack of signature, other formalities not observed.

You'll notice that I'm leaving aide the issues that lawyers usually refer to as "dependent relief". This refers to an application by a spouse or child to get a larger share of an estate under a valid will. The will itself would still stand, but the court is asked to give a larger portion of the estate to someone in the family.

In this post I'm talking about the ways in which someone hopes to bring the entire will crashing down.

Undue influence:
A person relying on the concept of undue influence aims to show that the will should be struck down because the deceased had been forced or persuaded to make a will that wasn't really what he or she wanted. The idea is that the person getting the estate under this will wouldn't receive it had the deceased been left alone to do what he or she really wanted to do, and therefore shouldn't be allowed to receive it now.

Lack of mental capacity:
Mental capacity is an essential component of a valid will. A person making a will must understand what he or she owns, must have an appreciation of his or her obligations and must understand the nature and effect of making a will. Therefore, a will can be attacked on the basis that the deceased didn't really know what he or she was doing due to illness, injury, medications or other causes of confusion.

One thing that should leap out at you when you read about undue influence or lack of mental capacity is just how hard it would be to prove that either of these factors actually existed when the will was made.

How do you prove that the son receiving the lion's share of his mother's estate manipulated her into leaving it all to him? He will say that he was the one who helped Mom the most during the latter part of her life and that she left the estate to him out of gratitude. Then the battle will begin in earnest.

You may be absolutely positive that he influenced her. You  may even think that "everyone knows" he manipulated her. But we're talking about a court of law, not a family dinner table. How do you prove it?

I'm not saying that these cases never succeed, because they do. They rely on a judge's interpretation of doctor's reports, witness testimony, family history, common sense and the law. They are tough cases that take a long time, a lot of money and infinitely thick skin to tolerate, but when the evidence exists, they succeed.

But I also believe there is an awful lot of blustering and threatening going on, carried out by those who have no real idea of just how hard it really is to successfully contest a will. Most people who talk about contesting a will change their minds once they realize what's involved.


Please don't post a question on this thread. This thread now has more than 200 comments, which is the limit for this system. Once we go over that limit, I can't see or respond to your question, so please post it on any other thread that has less than 200 comments. Thanks!

Dementia crash: teen's family pleads for law change

In the UK, an 89-year-old man drove the wrong way on a freeway, causing a collision that killed 19-year-old Charlotte Pitwell. It was later revealed that the man suffered from dementia. As a result of the accident, Ms. Pitwell's family is determined that the law must be changed to restrict older drivers.

Click here to read the story.

I admit that on the few occasions I have been driven somewhere by my 90-year-old uncle, I watch his driving carefully, looking for signs that he shouldn't be behind the wheel. He, however, doesn't have dementia. No doubt his reactions are slower than they used to be when he was flying with the RAF, but otherwise he still exhibits very safe driving.

Loss of a driver's license is a big deal to seniors. It's a loss of independence. It's a confirmation that life is being down-sized to accommodate aging. And let's face it, none of us likes to be told what we can and cannot do, especially by our children.

Should the law tell us when we should stop driving, or should that be something that is voluntarily regulated by each of us? Read this article and see what you think.

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.

Wrong legal information makes it harder to help aging parents

Urban myths, re-told anecdotes and fictionalized TV lawyers - they are all out there and all help add to the confusion of what is really the law and what is not. One of the main reasons I write this blog is that I know how many of you have "information" that you question. You just want to ask someone if it's true or not. I encourage everyone to keep asking questions.

There are people whose lives are made more difficult and more frustrating because they have wrong information. Take this particular reader - let's call him John - as an example. The following is part of a note I received from John:

"I can't take my parents to a lawyer to write their Powers of Attorney or wills as both are indisposed at home, and dad can't see to sign and also has slight dementia (not certified by a doctor)."

This is someone who has their hands full, in a situation that many of you probably recognize. But things are really not as bad as John thinks. Let's look at it a bit more closely, starting with John's mother.

Why can't his mother sign new documents? The only reason given here is that she is indisposed at home. That's not too unusual; many seniors have mobility issues. The comment about dementia doesn't seem to apply to her, so as far as I can tell the only issue is that she is housebound. That's easily dealt with; get a lawyer to go to her. And before you scoff at the idea, I can tell you that almost every Wills lawyer I know, including me, makes house calls. We want to make sure that seniors get the documents they need even if they can't make it to our office.

The real issue with John's mother is that she is being treated as an adjunct to John's father. John believes his father has some serious impediments to signing a will, and his mother is being swept along with that because John is thinking of his parents as a unit rather than two individuals in different states of health.

Now let's look at John's father. The first hurdle appears to be blindness. In reality, this is not a hurdle at all. Blind people sign wills every day. This is one of those nuggets of misinformation I was talking about. Every lawyer with some experience in wills can deal with this situation so if yours cannot, get a different lawyer.

The next hurdle is dementia. Of course John is right that dementia can be a serious issue, as a loss of mental capacity prevents a person from signing a will. However, John has mentioned "slight" dementia. Things have not yet progressed to the point where a doctor has been consulted, so this is apparently John's own diagnosis. While John may notice forgetful or unusual behaviour in his father, these changes may not be enough to prevent his father from signing a will. Again, John is not sure of the law as it deals with dementia and making wills.

Mental capacity doesn't have to be perfect. If it did, none of us would have a will. John's father doesn't have to be exactly the way he was when he was younger. He only has to understand the nature of a will and understand the choices he needs to make. While I understand John's anxiety on this point, I wouldn't be so quick to assume that his father lacks mental capacity. All wills lawyers are trained to determine whether any person giving them instructions has the capacity to do so and in this case I'd let the lawyer do exactly that.

I hope that John and others in his situation will understand from reading this post that it's not a good idea to rely on assumptions and on information from unreliable sources. Keep asking questions.

How do you know if an aging parent can't handle finances any more?

Last night there was a report on the news about an elderly woman with dementia whose daughter had arranged that two signatures (hers and her mother's) were necessary for a safety deposit box to be opened. Unfortunately the bank procedures weren't properly followed, the mother accessed the box without the daughter present, and now thousands of dollars worth of jewelry are missing. (Yes, I appeared briefly on that segment - if you blinked you probably missed me).

This story has led to quite a bit of discussion about how people know when an aging parent is experiencing dementia.

An important thing to know about dementia in an older person is that in the absence of some kind of injury (including stroke) or sudden illness, loss of mental capacity can happen slowly. And as with many types of change that take place slowly, it may take a while for isolated incidents to add up to a realization that a parent is experiencing dementia.

What are the signs that an elderly person might be having difficulty looking after their own financial affairs, and that it might be a good idea to step in? Here are some common signs:

-  the mail is piling up, unopened, at the senior's home, indicating that the senior isn't dealing with matters such as banking, insurance, investments, bills etc.
-  bills haven't been paid, sometimes resulting in the cut-off of important services such as telephone or heat
-  bills are being paid repeatedly due to the senior forgetting that he or she has already paid it
-  cheques are lying around instead of being deposited, or are misplaced
-  the senior has been, or could easily be, taken advantage of financially by scam artists, strangers or family members
-  irrational changes are being made to the senior's will
-  the senior can no longer manage small financial transactions such as paying a restaurant bill or making a purchase at a store, that he or she used to be able to do easily
-  large sums of money are withdrawn from the bank but the senior can't remember making the withdrawal or remember what the money was used for
-  the senior is transferring assets to friends or family members (including setting up joint bank accounts) for no apparent reason
-  the senior has made a new, recent friend who seems to exert a lot of influence on him or her, and to whom the senior is giving money
- the senior is experiencing a great deal of anxiety regarding money, such as being afraid to buy groceries or thinking he or she might be evicted from their home, even though there is enough money to pay the bills
-  the senior is making irrational purchases, such as cans of dog food even though he or she doesn't own a dog

Be careful about deciding that someone has lost capacity. Personality, personal wishes, and physical limitations all influence financial decisions, and the fact that you don't like what a parent is doing with money doesn't make the parent incapable. If you believe that your parent is experiencing dementia, make sure that he or she sees a doctor for that diagnosis.

Photo from http://www.dreamstime.com/

Incapacity can happen at any age - be prepared

This important message was recently discussed by Rania Combs, a lawyer in Texas. While documents dealing with potential loss of capacity are often needed by seniors, they are not the only ones who may be protected by having the right legal documents in place. Click here to read Ms. Combs' article and see how the lack of incapacity documents affected the family of a 22-year-old man.

A number of years ago I handled a case in which a man in his 30s was involved in a motorcycle accident and was injured to the point that he lost capacity to deal with his own affairs. He hadn't put any documents in place to deal with future incapacity, no doubt thinking that he was too young to need them. His family members ended up going through a much more expensive and invasive legal procedure to gain legal access to manage his finances and his business.

When you see your lawyer to have your will prepared, ask about getting documents to deal with incapacity done at the same time. You will need a power of attorney for finances, and a health care directive for medical and personal issues.

Singer Glen Campbell diagnosed with Alzheimer's disease

I like the approach that Glen Campbell is taking towards the onset of Alzheimer's disease. He is still working because he loves it, but acknowledging the potential for some memory  issues while on stage. He is letting his fans know in advance about these issues so that if he has a problem, the fans won't misinterpret what is happening. Click here to read more from www.today.msnbc.msn.com. Attached photo is also from that site.

Options for seniors diminish along with capacity

When anyone signs estate-planning documents such as wills and Powers of Attorney, the law says that the person must have the mental capacity to understand the consequences of signing the document.

An individual with full capacity can choose to sign - or not sign - any document. He has has full control over where his assets will go by signing the will that addresses his wishes. He is free to deal with his own money and property without interference by anyone else. He chooses who will look after his estate as executor, and who will act for him if need be under a Power of Attorney.

Unfortunately many seniors experience diminishing capacity. For most, it's a gradual process. As the loss of capacity progresses, legal options disappear, one by one. One of the first problems might be an inability to deal with money. This may manifest as anything from difficulty shopping for groceries to falling victim to a scam artist. The option to deal with his money as he sees fit gradually disappears, and the senior must have help. With any luck, he can still sign a Power of Attorney with the option of springing it into action when he needs it. In the meantime, he can rely on special bank accounts and informal help from family members.

As capacity continues to diminish, the need to have the Power of Attorney activated increases until eventually the senior must relinquish some or all of his control to the person he named as representative.

If the senior didn't act soon enough, there might not be a Power of Attorney in place. Once capacity declines, the option to prepare that document is gone. If the senior needs help with money, it's possible that a trustee might be appointed by the courts. Not only has the senior lost the option to prepare the document, but he has also lost control of the decision of who is to be his representative and what powers that representative will have. The process is imposed on the senior even if he doesn't want it. For some people, this means that all financial decisions are taken away.

The problem experienced by the senior might not have to do with money. It could well be a diminishing ability to live alone and complete daily tasks like cooking, shopping or getting around town independently.

With full mental capacity, living options are restricted only by finances. As abilities diminish, the senior must seek out help, which could be, for example, a housecleaner once a week, a nurse who comes to the house to help with shots or medications, or someone to drive the senior to appointments. At this point, the senior still has the option of signing a representation agreement or other supported decision-making document that appoints someone to help the senior with personal matters.

If capacity continues to diminish, the senior might have to rely on a Personal Directive (aka Advance Directive, Health Care Directive) that gives the chosen person full control over certain personal matters such as where the senior lives and which doctor he sees.

If the senior hasn't prepared a Personal Directive and has lost capacity, it could be that someone will have to apply to the courts to become the senior's legal guardian. At that point, the senior has lost all control over decisions.

While an individual has mental capacity, he or she can decide who is to be the executor of his or her will and who is to inherit. All options are open. If the senior didn't make a will while that option existed and dies without a will, the government decides who is in charge and who is going to inherit the estate.

The key to successful planning is to start early enough, while you're still mentally healthy and all your options are still open.

Can I leave my estate to whoever I want to?

Don't you wish legal questions had simple answers? A straightforward "yes" or "no"? Well, this one doesn't have a simple answer.

Theoretically, a person making a will does have the freedom to leave his or her estate to any person or charity that seems appropriate. But there are restrictions.

The restrictions may have some variations from place to place, but one constant across Canada is that everyone must adequately provide for the following dependants in his or her will:
-  their spouse (legal or common-law)
-  their minor children (legitimate or not)
-  their adult children who are prevented from earning a living by a mental or physical handicap

When I say that a person must provide for these individuals in his or her will, I mean that should the person fail to do so, anyone on that list (spouse, minors, disabled adults) automatically has the right to contest the will to get a larger share of the estate or even the whole estate. These cases really do happen on a regular basis, and I've handled many of them myself.

You'll notice that adult children who are not disabled are not on the list. Contrary to what many people think, you are not required by law to leave your estate to your adult children. If you choose not to, you should be aware that you will be going against popular tradition and will probably disappoint your kids. This doesn't mean that you can't do it; it just means you have to take extra care to have a will properly drafted, your capacity documented, and your lawyer's file stuffed full of noted about why you made this decision.

Laws dealing with wills and estates are provincial (except for taxation) so there are some differences between the provinces. For example, I note that there are several recent cases from BC in which the estate distribution set out in the will was successfully contested. In my opinion, those same cases would not have succeeded in say, Alberta, because the law that allowed the change in BC doesn't exist in Alberta. Obviously these laws will allow or prevent you from leaving your estate to whoever you want to.

All of this discussion pre-supposes that when you make your will, you have mental capacity to do so and are acting freely with no coercion by anyone. If your mental capacity has deteriorated to the point where you are making unreasonable decisions, the law says that you can't make a new will, in effect binding you to the will you made before you lost capacity. For example, if you suddenly decided to make a new will leaving your life savings to a new friend you just met three weeks ago instead of your children, you should assume that someone isn't going to like that and is prepared to contest the will.

Adult trusteeship: what is a passing of accounts all about?

"Passing of accounts" involves a trustee showing the courts what he or she has done with the money and property he or she handles for an incapacitated adult. If the judge is satisfied with the transactions ("accounts") for a set period of time, then they are said to have been "passed" by the judge. In some jurisdictions the process takes place in an open courtroom, and in others it is all dealt with by way of paperwork.

A passing of accounts may take place for various reasons. In some places, the law states that a trustee will automatically have the responsibility of passing his or her accounts on a regular basis. In all parts of Canada, a trustee must pass his accounts if he no longer wants to be the trustee and wants to hand matters over to another person. In fact a trustee is not permitted to quit until he has passed them.

A judge can order at any time that a trustee bring his accounts to court for passing. The judge might do this, for example, if a concerned relative of the incapacited person has asked the court for help. While most passing of accounts applications go through smoothly and without problems, others are hotly contested.

When looking at a trustee's accounts, the judge is looking for several items of information, including:

• the over-all financial situation of the incapacitated person, particularly in relation to the financial situation when the trustee first took over
• whether the incapacitated adult is being properly provided for
• whether money is missing, or everything is accounted for
• whether the trustee is maximizing the incapacitated adult's finances, for example by applying for all pensions and benefits available and by investing wisely
• how the incapacitated adult's property is being held, for example, whether the trustee has wrongly put the property in someone else's name
• whether the trustee has stayed within his authority, which means not doing things like giving away the incapacitated adult's money or making loans with that money to family members

The court wants to know that the trustee is managing the money properly. Knowing that one day he or she might be called upon to pass accounts, trustees should keep very good records.

Ralph Klein silenced by dementia

Click here to read a news article that reports that Ralph Klein, one of the most popular premiers we've had in Alberta, is suffering from a form of dementia.

Failure to plan for incapacity may lead to more intrusive help later

Nobody really wants to envision their future selves as incapacitated to the point of not being able to manage their own money and health care. Unfortunately, refusing to think about it doesn't prevent it. We don't know in advance whether will we suffer from an injury or health issue that will cause a loss of mental capacity, but it's essential that we have a plan in place to deal with it if it happens.

The usual documents put into place to deal with future incapacity are an Enduring (or Continuing or Durable, depending on where you live) Power of Attorney and a Personal Directive (or Health Care Directive, Advance Directive or Health Care Proxy). When you put these documents into place, you choose who will represent you when you lose capacity. You can set guidelines and limits on what they can do. You can express your wishes about how you want to live.

Having these documents in place greatly decreases the chance that anyone will have to apply to the courts to be appointed as a guardian or trustee (or committee) for you. Instead of having a court-appointed person who has absolute control over every aspect of your health care with no input from you, you can name someone you trust and give them some guidelines.

Instead of having a court-appointed trustee who is not of your choosing and who can sell or re-arrange your financial matters as he or she thinks best, you can give some instructions on what to do with specific assets or business matters. You can build in terms that allow other family members to be informed of what is happening or build in added accountability for your representative. You can retain more dignity and independence.

The bottom line is that with these documents in place, you retain some choice and control. Without them, other people might one day have to choose for you, and impose their wishes and ideas on you whether you like it or not.

Financially, setting up documents in advance is better too. Each of the documents here will only cost a couple of hundred dollars. Applying to the courts to become a trustee, with all of the paperwork and time involved, is much more expensive (and that comes out of your pocket, not the pocket of the person who is applying).

Planning for incapacity is just as important as planning for your eventual death. Make an Enduring Power of Attorney and Personal Directive a part of your estate planning.

Can a parent appoint a guardian for an incapacitated adult child?

Parents of incapacitated children don't always realize that once their children become adults, the parents no longer have legal authority to act on behalf of their children. Depending on financial and other circumstances, the parents most often have to take steps to have themselves or another person named as legal guardians and trustees for child. Click here to read a short article about this by Rania Combs, a lawyer in Texas.

It's important to realize that the parents themselves can't appoint anyone. Only a judge can do that. The parents can apply themselves to become the guardians and trustees. They should also name an alternate person who can take over the job when the parents have passed away or lost capacity.

When dementia drains the pocketbook

Beginning the process of helping your aging parents with their finances can be a nightmare, as this article from the New York Times illustrates. Click here to read it.

I read with interest the comments about how the bankers and other people along the way had suspicions that the aging parent was having trouble managing her finances, but didn't take any steps to do anything. Believe me, on the banking end we feel the same frustration. I can think of several customers whose banking officers have stated that they believe the person is beginning to have trouble. Unfortunately, we can't second-guess what our customers want to do with their own money. Ideally, it's a customer who is willing to talk to me about estate planning and to get something into place - something that gives legal authority to one of their kids or the trust company - to help them with their finances. At least in those cases, I can help. Frequently though, the aging parent declines the banker's suggestion that they take legal steps.