Who will manage your cash when you can’t?
The majority of Canadians have no plan in place for someone to take care of their finances if they lose their mental faculties, according to a report. It is a subject many people do not want to think about, with the majority of Canadians aged 45 and older believing their investment skills will increase as they age, the study by the BMO Retirement Institute found.
The majority of Canadians have no plan in place for someone to take care of their finances if they lose their mental faculties, according to a report.
It is a subject many people do not want to think about, with the majority of Canadians aged 45 and older believing their investment skills will increase as they age, the study by the BMO Retirement Institute found.
In fact, cognitive abilities decline as people get older, even without the onset of brain-wasting diseases like dementia and Alzheimer’s.
“Frequently, it’s unrecognised by the persons themselves and even their relatives until it starts to interfere with daily living,” Dr Michael Baker, professor of medicine at the University of Toronto, says.
“It’s possible that they may function well socially, but have lost the ability to discuss complex subjects like financial matters.”
This is when families may run into legal difficulties. Unless a legal plan is put in place when you are still mentally capable, a court-appointed guardian may end up handling your affairs.
The BMO Retirement Institute recommends a continuing power of attorney to avoid that problem. This is a legal document that gives another person authority to deal with your personal affairs if you lose decision-making capabilities.
The report found three quarters of Canadians aged 45 and older are aware of the need for such a document, yet less than two thirds actually have one.
Choosing someone to act as an attorney may not be a simple task. It must be someone you trust who also has the time and willingness to fulfil the role.
While family members may be the obvious choice, it is also a common cause of tension when one child is favoured over another, the report said.
Have you given any thought to who will manage your finances when you are no longer able to? Share your comments in the box below.
