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“I'm afraid of looking at you and not knowing who you are." - Dr. Alice Howland, Still Alice
Aging is daunting but, for the most part, a rational reality. One might lose mobility or suffer from various ailments, but life still offers joy and our sense of self, of who we are as a person, remains.
The deterioration of the brain, however, robs people of the latter. For that individual, coming to terms with the reality, confusion and memory loss must be terrifying. For loved ones turned carers, it is heartbreaking and the emotional toll heavy.
Yet, dementia, in all its guises (there are 25 different diseases and conditions that cause it), is only going to become more prevalent. Almost 1 million people in Canada will be living with dementia by 2030, according to research projections cited by the Alzheimer’s Society. This increases to 1.7 million by 2050.
The quote at the top of this blog is from the movie Still Alice, starring Julianne Moore, which was adapted from a book written by author Lisa Genova. It’s a moving portrait of someone who is slowly being engulfed by Alzheimer’s. It’s a tough watch, not just for the impact on the main character but also on her family. In talking about her motivation for writing about the subject, Genova highlighted the problem with society’s attempts to deal with this brutal disease. “It’s so uncomfortable because most people don’t want to think about what it would feel like to have Alzheimer’s. It’s kind of terrifying.”
If most of us are willing to bury our heads in the sand when it comes to dementia, it’s easy to then understand why the enormous financial toll of the disease is also ignored. It goes without saying but it’s worth repeating that cognitive impairment can affect clear decision-making, which can jeopardize a family’s hard-earned financial stability.
To understand how complex and overwhelming this might feel, take one of the well-used rules of investing – that people must take the emotion out of it. This is all well and good but try applying this to your own portfolio and spending plans when a spouse or parent is deteriorating with dementia and your world has been turned upside down. Not so easy. Poor decisions, however well-meaning, can ruin a myriad of things, from the person’s retirement security and legacy plan to family relationships.
How can an advisor help?
The first consideration is a fundamental one: be prepared. Does your financial plan factor in a long life and major speed bumps like serious illness? An IG Wealth Management study found two-thirds of Canadians do not have an estate plan. That’s an eye-opening statistic before you even factor in the impact of dementia.
An estate plan is critical when dealing with cognitive decline; it acts as a blueprint for important financial decisions and builds a protective layer around your finances. By sharing details of your life and wishes with a trusted advisor, they will be in prime position to protect and guide your assets according to your wishes even as, in the worse case scenario, your health declines. The critical components of this plan will include a Power of Attorney, a Trusted Contact Person, wills, insurance and tax plans. Having all this in place will take the guess work out of the future and keep YOU in control of your finances even if life throws you health curveballs.
In the process of planning, the Power of Attorney and Trusted Contact Person are central. It’s important to outline their different roles. Your PoA is a legal document that authorizes someone to make decisions on your behalf should you be unable or choose not to do so yourself. A Trusted Contact Person, however, does not have any legal authority – or liability. They can’t, therefore, make any financial or health-care decisions on your behalf. But that person is a crucial layer of protection from your potential incapacity or from others seeking to exploit you financially. The person should be someone not already involved in making decisions on your account, knowledgeable about your personal situation, and familiar with your support network. If your advisor notices a difference in your behaviour, for example, they can raise it with the TCP , who can talk to you about potentially difficult subjects, including concerns about any questions around diminishing mental capacity.
As well as looking into the future, the here and now financial impact of dementia is stressful. Can you and your family afford additional care, medication or adaptions to your home? An advisor can help explain and optimize the different tax credits available. For example, the Canada caregiver credit helps caregivers support a spouse or common-law partner, or a dependent with a physical or mental impairment, while the disability tax credit lessens the amount of income tax paid by individuals with severe or prolonged physical or mental impairments. Then there are the Home Accessibility Tax Credit and the Multigenerational Home Renovation Tax Credit.
If your loved one’s personality is slowly disappearing under a cloud of dementia, mounting costs and major financial decisions are a huge burden. Still Alice portrays how some family members, ultimately, can’t cope. Putting a robust estate plan in place can’t soften the blow of the disease, but it can set out a financial road map that keeps you in control, gives you and your family peace of mind, and ensures your financial legacy is fulfilled despite the affects of this wicked disease.
