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Estates & Wills & Trusts

Estate plans should account for cognitive and physical decline

Effective estate planning is about much more than what happens after you’re gone, Toronto trusts and estates lawyer David Mills tells

Mills, managing partner with Mills & Mills LLP, says the narrow view most people take to the issue — with a focus on what assets will be left to which people and organizations — ignores the reality many Canadians will suffer from some form of cognitive decline during their lifetimes.   

“There are very few people who will be fit and healthy in all respects until death,” he says. “For most of us, there will be a period of time when we are dependent on other people, whether physically, mentally or both.

“Preparing for cognitive and physical decline is critical. We should be thinking about it in the same way that we do when we put on a helmet before riding a bike or buckle up when we get in a car. It’s important for your own well-being and that of your family and friends,” Mills adds.  

He says one major component of the plan should focus on drawing up a power of attorney (POA) for personal care.

“When you’re unable to speak up to make medical decisions, you need someone you trust to speak for you,” Mills says.

Without a POA in place, he explains physicians have a pre-determined list of substitute decision makers to consult, set by Ontario’s Health Care Consent Act.

“Preferably you will have identified the person you want to be in charge and set some parameters around when they are needed because it’s possible that you may not think the next person in line is capable of doing the job,” Mills says.

On the financial side, he says things can get even more complicated without a POA for property in place, especially for high net worth individuals.

“Ultimately, it could fall to the Office of the Public Guardian and Trustee (OPGT) to make final decisions for you,” Mills says. “It’s a very busy government agency staffed by professional people doing a great job, but they are people who have no emotional connection at all to you, and will be working merely on the basis of a financial analysis.”

Otherwise, family or friends who want to step in once a person has become incapable may be forced to turn to the courts to have themselves appointed as attorney for property.  

“That’s a very expensive and time-consuming process that puts you at the mercy of the court and the OPGT,” Mills says. “It’s also a much more public process, which means a great deal of your personal information will be filed with the court.

“By comparison, properly planning in advance can save a lot of time, money and stress,” he adds.

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