Health Issues
Imagine an aging parent, a person full of independence and capability, falling victim to a debilitating illness such as Alzheimer’s disease, or suffering a stroke which impairs his or her mental functions. Consider what would happen if you or a family member are out of the country for an extended period. How will the bills be paid, contracts be signed or cheques cashed? Not uncommon, any of these situations can arise with little or no notice. You may think that in situations of mental or physical incapacity, or simply your absence, that your family can act on your behalf. Unfortunately, that assumption is incorrect. Without receiving court approval or having executed a valid power of attorney (in Quebec referred to as a mandate), your family cannot manage your financial affairs. Like a Will, a power of attorney is one of the most important documents within your estate plan. Yet, as with a Will, the power of attorney is commonly overlooked until it is too late. This often relatively simple document can save you and your family from financial and other difficulties by authorizing one or more person(s) to act on your behalf should you become unable to do so.
The Enduring or Continuing Power of Attorney for Property
A power of attorney is a document in which one person(a donor) authorizes another person (the attorney) to manage the donor’s property on behalf of the donor. At its broadest, a general power of attorney authorizes the attorney to do almost anything in respect to the donor’s property that the donor himself or herself could do, except make or amend a Will. However, the power of attorney may be more limited. For example, the power of attorney may authorize the attorney to act only during a specified period of time, such as while the donor is out of the country, or only in relation to specific property (e.g. bank accounts) of the donor. A general POA is a very powerful document which allows the attorney to do almost anything that the person granting it was able to do. For example the attorney could sell all the donor’s investments or sell their house. However, the agreement can be structured in such a way that the attorney only has specific powers or rights. When a general POA is granted it is assumed that the donor has the mental capacity to do so. Ordinarily, the powers granted would cease if the donor became mentally incapacitated. Therefore, if the POA is being established in the anticipation of the donor’s later mental incapacity, it is very important that it is structured as a Continuing or Enduring POA. This will ensure that the powers granted to the attorney will continue if the donor is no longer capable of making their own decisions.
You may visit the following Province of Ontario website to download and use Power of Attorney forms in Ontario:
Ontario Ministry of the Attorney General - Powers of Attorney (Click)
A lawyer should be consulted when a Power of Attorney is being considered. There are legal and family issues that need to be addressed if this route is taken.
Powers of Attorney for Personal Care
This document is sometimes known as a Living Will although there can be some differences depending where you live. It gives the designated person or people the power to make decisions regarding the medical treatment of the person when they are unable. Some of the issues that can be addressed by the attorney are:
I. Hospice care
II. Change of physicians
III. Use of experimental treatments
IV. Nutrition
V. The use of ‘heroic measures’ to prolong life
An advantage of having a POA for Personal Care in place is the ability to make health care decisions in a timely way. In the absence of this arrangement the concept of patient/doctor confidentiality may mean that you may not be able to determine all of the facts about your parent’s situation and cannot make decisions effectively. Ideally, to deal with a parent’s situation effectively there should be a Power of Attorney for Property as well as a Power of Attorney for Personal Care in place. One person can be named as the attorney or it can be a joint situation. The attorney will generally have to be at least 16 years of age. Some people may be restricted from being the representative such as the individual’s doctor or nurse. Generally, the POA becomes effective when a competent health care provider decides that the individual is no longer able to make their own decisions. However, it is highly advisable to seek advice from a qualified lawyer. Power of Attorney issues are a provincial/territorial concern and there is different legal treatment of these arrangements in different parts of Canada. As well, legal counsel will help to ensure that the document is structured in the proper way to deal with the specific situation.
Health Care
Older people generally have more medical issues and expenses than younger people. Depending on the nature of those expenses the individual or their families may have to pay for them personally. Canadians can assume that their basic, essential health care needs will be met under the government programs. However, there are some expenses that are not covered by the government. Now that your parent or spouse has an illness, you may be concerned about what those expenses may be and how you will be able to pay for them. The cost of prescription drugs is the second largest health expense in Canada after hospital care. But, out-of-hospital drug costs are not covered under the Canada Health Act so any reimbursements for prescription drugs are a provincial and territorial concern. The amount of provincial/territorial coverage varies fairly dramatically across the country but as a general rule, seniors will receive assistance in covering drug costs. Those who receive social assistance will pay only as much of 35% of the costs. It should be assumed that there will most likely be drug expenses incurred that will not be reimbursed by the government. Some seniors may have private insurance that will cover at least some of their drug costs. You should contact your provincial/territorial authorities to determine if your parent is eligible for government drug expense assistance. You should also determine whether they are under any company or private insurance.
Examples of some of the other health related expenses that will not be covered by provincial plans are:
• Wheelchairs or other transportation devices
• Hearing aids
• Alterations to a home to make it usable by a disabled person
• In-home care
• Special vehicles
However, there are a number of government programs that can help your parents pay for these costs.
Please contact us to find out more!
Barbara Reid's Wealth Management Team
Your personal Wealth Advisor in Hamilton, Ontario
