Families should ‘stress test’ planned care for elderly members

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An Alzheimer’s diagnosis is never easy, but the two adult children in one ultra-high-net-worth family knew their dad had a will in place and the means to pay for excellent healthcare. What no one knew was that Dad, who wanted to leave most of his estate to his children, had also designated a sum of money to be left outright to his second wife.

When his children discovered this, the Alzheimer’s diagnosis meant it was too late to revise the will. Meanwhile, healthcare costs had depleted much of his estate, and, in the end, considerably more money went to his wife than to his children, which was not his intent.

It’s the kind of situation that better financial advice, good communication and a regular review of documents could have prevented.

By 2026, one in five Canadians will be a senior citizen, and family advisors increasingly find themselves dealing with issues of aging, disability, mental health and cognitive decline. These issues intersect with wealth management and succession plans and affect every family’s most important asset: the family members themselves.

How can family offices best handle these issues?

One of the very first things they can do is help families get their documents in order.

“The role of the family office is to have a structure in place so the family is not left in a vulnerable position,” says Mindy Mayman, partner at Richter Family Office in Montreal. Key documents need to be dealt with early in life, she says, including wills and powers of attorney for property and personal care (or in Quebec, a protection mandate).

“It is paramount for any single or multi-family office to make sure that these documents exist and that they’re reviewed regularly, and that there’s always a plan,” says Mayman. Creating these documents and plans early makes it easier to make clear, dispassionate decisions about succession and end-of-life care.

How early in life? The sooner the better.

“There’s something called the 40/70 rule,” explains Tiffany Harding, vice-president and head of wealth planning at Gluskin Sheff in Toronto. “If you’re in your 40s, your parents are likely in their 70s, and that’s the time when you should be communicating those touchy topics, like ‘what kind of care do you want?’ and ‘have you thought about your estate plan?’ and ‘if something did happen to you, what are your wishes?’”

Family offices can also create and maintain relationships with a spectrum of health-care providers to encourage preventative medicine and prepare for care in aging.

“We keep a long list of close connections with specialized healthcare providers, whether they are geriatricians, social workers, physiotherapists and any additional health workers that might be needed,” says Martha Simmons, chief education officer at the Toronto-based multi-family office Forthlane Partners. “It’s especially helpful to build a relationship earlier on, when the needs aren’t as profound, so the relationship can evolve as needs evolve.”

Help with finances

Harding says elder-care planning organizations such as Silver Sherpa and Elder Caring provide excellent smart-aging programs and other helpful expertise.

Family offices may also offer personal money management for family members needing assistance, such as Richter’s “personal chief financial officer” service.

“That’s a service that can help or completely take over paying bills for someone, administering their bank accounts, helping handle cash inflows and outflows, budgeting payments perhaps for attendants or full time nursing care,” says Mayman, adding that the service can also handle payroll duties and property upkeep.

With so many hands potentially at the wheel, stress-testing this support network can help detect gaps and avoid trauma in the event of a crisis. A family office may organize a dry run – a virtual or in-person chat where all individuals who are assigned a potential role in a person’s care can gather and talk through scenarios.

“It’s a rehearsal, or really sort of sitting around the table with all the professionals that would be involved,” says Mayman. “So that would be the family office professional, it might be the legal adviser to the family, it might be the insurance advisor to the family, and the accountants of the family, and they would talk through scenarios based on the plans that have been put in place.”

Family conflicts make things worse

Pain points are inevitable, however, even with the best planning, Harding says. Conflict can arise when one family member bears more responsibility for an aging parent – an often time-consuming role that may not be recognized by the family. Or siblings may disagree about a parent’s capacities (can Mom still drive?) or the type of care a parent may need.

Some of these can be resolved with planning and good communication ahead of time, where parents share their plans and intentions.

Harding offers a few additional factors to keep in mind:

• People may opt to receive private care through residency programs in preferred locations, including other countries.
• Quality of care varies greatly, and it’s important to ensure ongoing arrangements are monitored.
• Elder abuse and financial exploitation can happen, so oversight must be established to ensure the family member’s safety.
• Managing care for an aging parent can be an intense time commitment, often lasting many years.

People often underestimate the emotional impact and the time involved, Mayman says.

“I don’t think because you have a lot of money, you’re necessarily more emotionally prepared to go through this process,” says Mayman. “You need the right advisor that can broach this with the family in a way that makes it as pleasant as possible. And whatever meeting point the advisor and the family can agree upon, that’s where the starting point should be.”

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