Thinking about our loved ones ageing – and the challenges that may come with it – is not always at the top of our priority list. It’s a difficult topic – one that many of us prefer not to confront until it’s absolutely necessary.
Having said that, eliminating the financial stress that comes with helping our parents, grandparents, and loved ones manage their finances as they age can give us some peace of mind, especially when it comes to dealing with dementia or Alzheimer’s.
In fact, a 2016 Texas Tech study study showed that financial literacy declines as people age. This can become worrisome, as it welcomes the potential of fraud, scams, and ethical violations. For this reason, it makes sense for older people to designate someone they trust to take over their financial affairs. By planning for these potential issues, you’ll help protect your loved ones when they need it most.
Choosing an Enduring Power of Attorney
The first step in managing your loved one’s affairs is to talk with a trust and estates lawyer to designate an enduring power of attorney. An enduring power of attorney (EPA) acts on your loved one’s behalf to make legal and financial decisions when it’s clear they’re mentally unable to make those decisions on their own. The role of the EPA varies from province to province.
Once you are working with a lawyer and your loved one has designated their EPA, they will draw up a power of attorney that covers incapacity guidelines. This means that as long as the granter (your loved one) is capable, they will make all legal and financial decisions for themselves but will pass this responsibility on to their EPA when the time comes to do so.
The EPA could be you, another family member, a financial professional, or a lawyer who knows and understands the granter’s intentions. Many people choose their spouse as their EPA; however, this is riskier as there is a chance their spouse might experience the same health issues and become incapable of making these decisions at some point.
While it’s tough to think about your parents and loved ones becoming vulnerable to financial and legal issues, making sure you’re prepared for the future will ensure you have one less thing to worry about in difficult times. Keeping wills up to date and designating an EPA who has your loved one’s best interest in mind is the best way to keep them protected as they age.