As Canada's population ages, health and financial directives are imperative
TORONTO, June 21, 2012 /CNW/ - As longevity and health issues become more common, a will does not address potential incapacity and other related health issues. For many Canadians, health directives and a general Power of Attorney (POA) or other financial directives will likely be needed before your will is invoked. According to the third annual RBC Myths and Realities poll, most retired boomers (81 per cent) have a current will, only half (49 per cent) have a current health directive and even fewer (39 per cent) have a current financial directive.
According to Census 2011, the number of seniors aged 65 and over increased 14 per cent between 2006 and 2011 and during that same time frame, the number of centenarians, those aged 100 years or older, increased 25.7 per cent, the second-highest growth rate of all age groups, after the 60 to 64 age group (up 29 per cent). This puts the number of Canadians over age 65 close to five million and the number of centenarians at almost six thousand - the highest ever.
"Financial planning is not complete without planning for potential unforeseen health issues or incapacity," said Suzanne Michaud, senior advisory counsel, RBC Law Group. "Your plan should address your wishes relating to personal care and include the right documents in place to appoint someone to act upon your behalf for both property and personal care matters."
A health directive refers to a written document that is used to express your health care wishes if you are no longer able to communicate them and also appoints someone to make your personal care decisions if you cannot. Similarly, a general POA or other financial directive refers to a written document that grants one or more persons the responsibility of managing your financial affairs. For property, you may stipulate when it comes into effect and if it should continue to be valid if you become incapable of acting for yourself. It is also important to consider what happens if your appointed decision maker passes away or becomes incapacitated.
Michaud notes that Canadians recognize the reality of aging and health concerns but they are not taking action while they are young enough to address this reality without undue pressure or failing health. Retired boomers indicate that the top challenges in retirement will be changes to health, either their own (74 per cent) or their spouse's (50 per cent). One-in-three (33 per cent) retired boomers has experienced a significant health event or decline in their family's health in the past year and 41 per cent think they'll have to provide care giving to another adult at some point.
"Thinking about documents that deal with your potential incapacity is not an easy task, but there are resources available to help you," advised Michaud. "You don't want to leave family members and friends with the burden of not knowing what to do or how to fulfill your wishes at a very emotional time. There is also a potential for disputes among your loved ones as to what your wishes are or who is best suited to carry them out. Simply stated, it's much better to plan ahead."
RBC provides the following tips to help you get started:
- Be honest with yourself: It is important to honestly evaluate which family member or friend or combination is best suited to the task. If there is no one, or there is the likelihood for disputes, consider appointing a trust company or an alternative.
- Seek professional advice: A capable legal professional such as a lawyer or notary can explain your choices and make certain that the documents you sign reflect your wishes, are legally valid and provide for alternate decision makers.
- Act before it may be too late: If you leave these decisions to the last minute, you may be faced with a serious illness or deteriorating condition. Your mental condition may be questioned if a family member disagrees with your choices or medication may interfere with your judgment, leaving the documents open to a potential legal challenge. You don't want to be making these choices under time pressure.
- Being older should not be the guide: Some of us are procrastinators, but waiting until you are "older" is a gamble because you do not know what the future may hold. An unforeseen event can affect your ability to make your own decisions and manage your own affairs at any age. You may have a family depending on you and there will need to be access to your funds, not only for your own care but for their support and care as well.
About the RBC Myths & Realities Poll
The third Annual RBC Retirement Myths & Realities Poll, which examines Canadians' expectations and experiences in retirement, was conducted by Ipsos Reid from February 24 to March 12, 2012. For this survey, a national sample of 2,833 adults aged 50 and over with household assets of at least $100,000 from Ipsos' Canadian online panel was interviewed online. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted, probability sample of this size, with 100 per cent response rate would have an estimated margin of error of ±2 percentage points, 19 times out of 20. The margin of error will be larger within regions and for other sub-groupings of the survey population. All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error.
About RBC's financial planning advice, resources and interactive tools
The RBC Advice Centre offers free online advice, resources and tools regarding retirement and estate planning. In addition, the RBC Your CareGiving Planner produces a customized report to help caregivers - as well as those needing care - be better prepared as changing health conditions affect the level of care required. RBC's myFinanceTracker, a comprehensive online financial management tool, offers all personal RBC online banking clients the ability, at no cost, to create a set budget and track their spending habits.
Image with caption: "RBC Retirement Myths and Realities Poll 2012: Four-in-ten retired boomers think they'll have to provide care giving to another adult at some point (CNW Group/RBC)". Image available at: http://photos.newswire.ca/images/download/20120621_C2833_PHOTO_EN_15384.jpg
Image with caption: "RBC Retirement Myths and Realities Poll 2012: One-in-three retirees has experienced a significant health event or decline in their family in the past year (CNW Group/RBC)". Image available at: http://photos.newswire.ca/images/download/20120621_C2833_PHOTO_EN_15382.jpg
Image with caption: "RBC Retirement Myths and Realities Poll 2012: The top challenges in retirement will be changes to health, either their own or their spouse's (CNW Group/RBC)". Image available at: http://photos.newswire.ca/images/download/20120621_C2833_PHOTO_EN_15378.jpg
Image with caption: "RBC Retirement Myths and Realities Poll 2012: Almost half of retired Boomers have a current health directive; fewer a current financial directive (CNW Group/RBC)". Image available at: http://photos.newswire.ca/images/download/20120621_C2833_PHOTO_EN_15380.jpg