The COVID-19 pandemic has highlighted concerns in Canada about health and aging and where they fit into the bigger estate-planning picture, experts say.
A new survey of estate planners in the United States indicates that their clients are concerned about the costs of health care and living longer in the era of COVID-19, and that strikes a chord with Canadian professionals, too, despite the differences between the two countries.
“Whether in the U.S. or here, there’s the same concern: How am I going to fund my health care,” Neela White, a Toronto-based portfolio manager at Raymond James Ltd., says about findings in the TD Wealth survey released last month.
“In the U.S., the structure of the health-care system is different, but there are lots of funding gaps here, too, that people have to pick up the slack for,” adds White, who is a member of the Estate Planning Council of Canada.
White, who specializes in longevity planning, and other Canadian experts were asked whether concerns cited in the U.S. survey resonate north of the border. All agreed the pandemic has highlighted issues about health and aging, and where they fit into the estate planning process.
White sees health care as the top issue now, especially given the pandemic-related stresses on hospitals and safety issues in long-term care and other seniors facilities. Developing a thoroughly laid-out strategy governing the use of assets and their distribution to future generations is also an issue.
That’s in line with the analysis of the U.S. survey. The pandemic prompted families to make tough decisions, rather than avoid them, and “accelerated the need for a long-term estate and financial plan,” according to the survey. Of the 142 responses, family conflict, the most-mentioned threat for the past three years the survey has been taken, fell from 25 per cent in 2020 to 10 per cent in 2021, while fears over paying for health care and the costs of living longer rose from 7 per cent in 2019 to 22 per cent this year.
Average life expectancy has been rising steadily, according to United Nations data. In Canada it’s nearly age 83, compared to 79 in the U.S.
Micheline Varas, senior managing partner of Vancouver-based Customplan Financial Advisors, says, “I don’t believe that concerns have changed, only heightened” during the pandemic.
“Uncertain times make us feel we have lessened control,” Varas adds. “This propels us to take charge, and many have looked more closely to arrangements for the management of their estate, no matter its size.”
Montreal-based Davide Pisanu, co-founder and chief executive officer of ClearEstate Technologies, a provider of estate planning and settlement services, says his Canadian clients aren’t concerned so much about the future costs of aging. Canada, for instance, has universal health care and medically assisted dying legislation; in the U.S., health care is a mix of public and private programs, and medically assisted dying is legal in only a handful of states.
“In our planning services, the conversations we usually have are much more around the complexity of the administration [of estate plans] and people feeling they don’t want to burden their children or whoever they leave everything to,” says Pisanu.
Their most pressing questions, he says, are: Is my will rock solid? Is what I intend to happen with my estate going to happen? How do I make settling an estate as painless and as seamless as possible?
White, who has a background in geriatrics, uses her own family’s experiences to illustrate the need for proper planning to her clients.
Before her parents died, they moved in with her and her husband after her father was diagnosed with cancer. He was expected to live three months but survived for 18. White says her parents spent $176,000 on private care to keep her dad comfortable. Also, White’s mother, who is a cancer survivor, broke her neck in a fall but was approved for only three hours a week of community support.
“You think, ‘I pay my taxes here in Canada and I’ll get the things I need.’ But no. It’s not necessarily feasible for me to leave my job and provide unpaid care for my parents. People are wanting more to age in place. But it takes planning, dollars and discussing the plan with the people around you.”
Pisanu speculates the TD Wealth study found fewer concerns about family conflict because COVID-19 has made quick, decisive planning a priority. That reflects what’s happening in Canada, he says.
While the pandemic has spurred government action and policies – Quebec, for instance, recently pledged $750 million over five years to improve home-care services – Pisanu fears Canadian housing affordability, with prices reaching a fever pitch, will hinder generational planning.
“It’s no longer true that kids will necessarily take care of their parents when they’re older. Most young people are in condos today; houses are not affordable.” For anyone looking to a child or another relative to take care of them when they’re elderly, “in the end that’s a decision that can only be made if public supports are available.”