Preparing, caring for the finances of dementia patients
No one wants to think about a time when they or a loved one are unable to make competent financial decisions. But it's important to consider such possibilities while everything is fine, because once dementia sets in, understanding information and making rational decisions may become virtually impossible. Fortunately, help is available before and after a diagnosis of impaired mental capacity.
According to a report by the Alzheimer Society of Canada, about 750,000 Canadians have Alzheimer's disease or another type of dementia that adversely affects judgment, memory and behaviour -- a figure expected to hit 1.4 million by 2031.
"Dementia can lie dormant in the brain for up to 25 years before symptoms appear, and there still is no cure nor any effective prevention or treatment," says Alzheimer Society of Canada spokesperson Roseanne Meandro.
Besides Alzheimer's, dementia can be caused by diseases such as Huntington's, Parkinson's or Creutzfeldt-Jakob disease. But no matter the cause, dementia is a progressive condition and sufferers gradually lose their ability to understand numbers. As their mental capacity deteriorates, people start to mishandle finances in ways that are out of character, such as draining their bank accounts or using credit to buy odd luxury items.
In February, the CBC reported that a 76-year-old dementia patient in B.C. impulsively took out and then defaulted on a $70,000 loan for a new car despite already owning a vehicle. He would not allow his wife to return the vehicle.
Karen Henderson, founder of the Long Term Care Planning Network, says that people with dementia also often fail to recognize deceit and therefore become prime targets for fraudsters. She cites one woman with Alzheimer's disease who was repeatedly tricked into paying for promised prizes that never arrived. The victim contacted the Canadian Anti-Fraud Centre, which told her to stop sending in money. Yet she continued to provide funds when the scammers called back "because they were so nice."
The time is now to protect both yourself and your loved ones from such financial mishaps as a result of dementia.
measure: power of attorney protection
Judith Wahl is executive director at the Toronto-based Advocacy Centre for the Elderly, a community legal clinic for seniors. She describes a power of attorney as a planning document for potential incapacity. Paying a private lawyer to set up a power of attorney is more affordable than most people think, but Wahl cautions that the document can only be signed when all parties are mentally capable of making that decision.
In Ontario and most other provinces, separate powers of attorney are required for property and personal care. Property-related duties include managing the other person's cash, making a will and investing. Property powers of attorney usually go into effect immediately when signed. However, you can specify a triggering event in the contract instead, such as when a chosen relative assesses you as no longer mentally capable.
Wahl says that the attorney you choose assumes full control of your finances, so be sure that person will use the money for your benefit, not theirs.
"You've got to appreciate that someone could misuse their powers as the appointed attorney," Wahl says. "Mental capacity means you understand the whole package that comes with signing the legal document."
After diagnosis options
Absent a power of attorney, Ontarians have two main alternatives in which a conservator takes over your assets; other provinces only have one.
"Ontario is unique," says Wahl. "Ontario is the only province that has Statutory Guardianship of Property."
- Statutory Guardian of Property (Ontarians only). If a qualified capacity assessor finds that you can't competently manage your property, then the provincial government's public guardian and trustee takes over financial control. You have a right to refuse to take a capacity assessment and can contest an incapacity finding, notes Wahl, who adds that a relative can apply to replace the government's statutory guardian.
- Guardian of Property. If the provincial superior court concludes that you are unable to manage your belongings, a court order is issued to the applicant asserting your incapacity, who then assumes control of what you own. A court order is the highest-ranking option.
with dementia respectfully
People manage money poorly for many reasons, so it's important not to jump to conclusions if you suspect a lack of mental capacity. Instead, says Wahl, treat red flags -- such as not opening mail or not paying bills -- as reasons to start an earnest conversation to find out what's going on.
Henderson personally cared for her father during his 14-year struggle with dementia. She now advises her clients that constant communication and mutual trust are key, and recommends they visit or speak with the cognitively challenged individual daily.
People with diminished capacity should also be included in conversations with other people related to their care. Even when her father was in a nursing home with advanced dementia, Henderson insisted that he attend every meeting that she ever had with nursing home staff.
"Never take away all money from a confused senior," she adds. "My dad always had $10 in his wallet, which was a part of life, made him feel secure and he was lost without it."
Where to go for help
- Alzheimer Society of Canada runs a nationwide network of provincial societies that offer a range of programs and services for dementia sufferers. These non-profit organizations also help family members and caregivers understand, prepare for and manage changes that arise.
- Advocacy Centre for the Elderly is a group of lawyers who can help with legal issues related to dementia -- for example, when an individual with obvious Alzheimer symptoms signs a purchase agreement that the salesperson should have recognized.
- Long Term Care Planning Network works with families to help them understand the implications of dementia, what care options may be available, what they can expect and how to cope.
- Financial planners trained in elder issues and non-profit credit counselling agencies can also help deal with dementia-related money concerns.
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