Estate Law Articles
9 Costly Misconceptions About Planning for Your Senior Years
Misconception #1: Most seniors move into nursing homes as a result of minor physical ailments that make it hard for them to get around. Wrong. A large percentage of admissions to nursing homes through the Local Health Integration Network is because of serious health, behavior, and safety issues caused by Alzheimer’s disease and dementia.
Misconception #2: Nursing home costs in Canada average $1,500 to $2,500 per month per person. Hardly. Current nursing home charges for one resident typically run $5,000 per month, or $60,000 per year, which does not include prescription drugs – and those costs continue to rise.
Misconception #3: Children can care for a parent with Alzheimer’s disease at home, without the need for nursing home care. Not true. Many patients with Alzheimer’s disease end up in nursing homes because children are simply unable to provide the level of care their parent needs. In most cases, the children want to care for their parents. But, as a practical matter, they simply can’t. Moving a parent into a nursing home is an intensely personal issue and should not be labeled as a right or wrong decision. In many cases, it’s the only realistic option. The rare exception is when the family has enough money to pay for skilled nursing care at home.
Misconception #4: Standard legal forms are all you need for a good Estate plan. Not true. A competent Estate plan begins with clearly defined goals, supported by well-drafted legal documents, and the repositioning of assets, as needed, to protect your Estate from taxes, probate costs, and nursing home costs.
Misconception #5: Your child will never move you into a nursing home. Wrong. Most children consider all options before moving a parent into a nursing home. But, sadly, children usually find they have no other alternative. As a result, parents who never expected to live in a nursing home soon discover that a nursing home is the only place with the staff and equipment to provide the care they need.
Misconception #6: You will never end up in a nursing home. That’s hard to predict. Your odds are roughly 50/50. Every year, tens of thousands of seniors will face costs of $60,000 or more, which does not include the cost of prescription drugs.
Misconception #7: You can wait to do long-term planning until your spouse or you get sick. Yes, to some degree. However, you and your spouse will be much better off if you have taken important planning steps in advance, before a crisis occurs. What stops most people from being able to effectively plan when they are in the middle of a crisis is that the ill person is unable to make decisions and sign the necessary legal documents.
Misconception #8: All Power of Attorney are created equal. Not true. A Power of Attorney is a customized legal document – and not a form! For example, most Powers of Attorney don’t contain basic gifting authority. Without a gifting power, your Attorney is limited to spending your money on your bills and selling your assets to generate cash to pay your bills and may be subject to scrutiny if any gifts are made.
Misconception #9: Since you are married, your spouse will be able to manage your property and make financial decisions without a Power of Attorney. Not true. If you become incapacitated and your spouse needs to sell or mortgage the family home – or gain access to financial accounts that are in your name only – your spouse will need a Power of Attorney. Without one, your spouse will have to make Application to the Ontario Superior Court of Justice, prepare and file a proposed Management Plan and obtain a Judge’s approval and appointment as your spouse’s Guardian.