Planning for incapacity is an important aspect of estate planning, yet is often overlooked. Many people mistakenly believe that estate planning equates to having a will. In reality, a comprehensive estate plan includes much more. Your will only takes effect after death…so what happens while you’re still living?
As our population ages and continues to live longer, more of us will likely be living with some form of cognitive impairment or dementia. And while a diagnosis of Alzheimer's disease or another form of dementia doesn’t mean that you must immediately stop making decisions, there will come a time when you will no longer be able to decide on your own. Having a plan in place makes things easier for your family when that time comes, and gives you the peace of mind that your wishes for health care, personal care and finances will be respected.
Here are the steps everyone can (and should) take to be prepared:
Appoint one or more substitute decision-makers
A substitute decision-maker will make decisions on your behalf in the event that you are incapable of deciding for yourself. Depending on where you live, this person might also be known as a “proxy”, “representative”, “agent”, or “power of attorney”*. Whichever term used, in every province there are two types: one for personal care, and one for management of property. You may choose to appoint the same person for both, or two different people, keeping in mind that they can require different skill sets.
For example, you may want someone with financial acumen to make decisions around your property, but someone else to make decisions around your personal care and health care. While your substitute decision-maker for personal care must be a person, you have the option to appoint a trust company to manage your property and financial decisions. Whatever you decide, the person or persons you appoint should be someone whom you trust to carry out your wishes.
It’s important to understand that the role of substitute decision-maker is different from the executor of your estate. There can be practical reasons for appointing the same person as executor and substitute decision-maker, but appointing one doesn’t automatically appoint the other.
If you don’t appoint a substitute decision-maker, most provinces and territories have a priority list, usually starting with family members—but here’s the thing: no one is automatically given this role. To be appointed, a person needs to apply to court, and this process can be complicated, time-consuming, and costly. For example, on the financial side, the applicant would need to file what is known as a “management plan,” which details all of your assets and how they will manage them.
It’s also important to note that the priority list used by the courts is arbitrary, and doesn’t take into account your personal family situation, or how close a person’s relationship was to you. That means that the person chosen by the courts may not be the person you would have wanted to make decisions on your behalf. Appointing a substitute decision-maker gives you the comfort of knowing that your care and property will be in good hands.
The process for appointing a substitute decision-maker varies across the country, so speak to a lawyer or your local Alzheimer Society to find out about the specific legal requirements in your province.
Ensure your wishes are known
Make an advance directive, or living will*
This is a document detailing your desires regarding your medical treatment in the event that you become incapable of communicating your wishes on your own. Note that this is not a legally binding document—it only serves as a guideline. It’s up to your health care providers and/or your substitute decision-maker to interpret your wishes and make decisions. So while an advance directive is an important part of your plan, it shouldn’t be the only part.
Discuss with your substitute decision-makers and family
It can be difficult to anticipate every possible eventuality in your advance directive, so it’s important to have conversations with substitute decision-makers about your values and wishes so that they can make the best decisions for you. Advance directives also focus only on medical care, but those aren’t the only types of decisions that will need to be made. Take the opportunity to speak openly and frankly with your substitute decision-maker about issues relating to future health care, personal care and financial decisions. Where do you want to live? What do you want to eat? Do you want financial resources to prioritize your comfort and well-being? Substitute decision-makers should know your preferences for things like language, food, hygiene, clothing, routines, activities, fears, likes and dislikes.
Don’t forget to discuss with the rest of your family, too. Ensuring that they are aware of your wishes can help avoid conflict between substitute decision-makers and other family members down the road.
Work with a professional
Don’t try to do this alone! Consult with a lawyer or your local Alzheimer Society to ensure all contingencies are covered and the appropriate legal paperwork is in place. Often, when a lawyer drafts your will, they will also include advance directive and substitute decision-maker paperwork as part of their services. This can be helpful for ensuring a smooth transition between living and after-life care and decision-making.
Revisit and revise regularly!
Just like a will, if you change your mind—so long as you remain capable—you can change your plan. There are also certain situations where you should revisit your plan—major life changes like marriage, divorce, children, health issues, deaths or moving to a different province should all prompt you to re-examine your estate plan.
It’s human nature to avoid talking about difficult topics like incapacity. But by actively preparing now, you can get on with your life knowing that future decisions about your personal care and property will be made easier for your family and reflect your wishes, beliefs and values.
*Laws and terminology vary from province to province. Contact your local Alzheimer Society for more information.
- Decision-Making: Respecting Individual Choice (PDF)
- Planning for the future
- Dementia and end-of-life care
RBC Royal Trust and RBC Wealth Management are business segments of the Royal Bank of Canada. Please click this link http://www.rbc.com/legal/ for further information on the entities that are member companies of RBC Wealth Management. The content in this publication is provided for general information only and is not intended to provide any advice or endorse/recommend the content contained in the publication. ®/TM Trademark(s) of Royal Bank of Canada. Used under license. © Royal Bank of Canada 2019. All rights reserved.