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Tag: Power of Attorney

  • 3 signs you need to take control of your parents’ finances – MoneySense

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    These episodes, combined with my mother’s observations about increasing forgetfulness and compulsive behaviours, led us to get him medically tested. The diagnosis was direct: early-stage dementia. His doctor suspended his licence and directed me to take immediate control of his finances. That moment introduced my family and me to a harsh reality. While we all expect our parents to age and need help, the sudden immersion into managing someone’s declining health can be shocking and leave us unprepared for the caregiving responsibilities ahead.

    Warning signs you may need to step in

    Many of the signs may at first seem quite innocent and subtle, but if you notice them occurring frequently and consistently, they could be flags to get a diagnosis. These can include:

    • Repetitive conversations: Constant circling around the same pattern of compulsive thoughts. 
    • Failing to recognize familiar faces: Several times my father failed to recognize long-time family friends he once spoke to on regular basis. There were times he even failed to understand who I was, which was so disheartening.  
    • Social withdrawal: As health difficulties progress, the person’s social circles shrink slowly but then dramatically. As my father’s condition progressed, both my parents detached themselves from their fairly large social networks. COVID-19 accelerated the process. 

    A job you never applied for

    These behaviours are often more dismaying to family members than to the person with the health issues. 

    If you’re reading this and thinking about your own aging parents—or if you’re already in the thick of it like I still am—you’re not alone. According to a 2022 report from Statistics Canada, around one in four Canadians aged 15 and older (7.8 million people) provided care to a family member or friend with a long-term health condition, a disability, or problems associated with aging. These 2018 figures likely underestimate the true prevalence of caregiving, especially in the wake of the COVID-19 pandemic, which increased the demand for elder-care services.

    Managing your parents’ finances can feel like a full-time job. I’m now six years into this journey and it’s been a never-ending roller-coaster of phone calls, emails, and appointments with banks and service providers. It is hard enough to stay on top of your own and immediate family’s finances. You must now understand all of your parents’ financial quirks, ranging from their income sources and recurring expenses to what investments they have, if any. At times it feels like an endless scavenger hunt searching for documents, bank accounts, invoices, legal documents, insurance policies, and online accounts. 

    Have a personal finance question? Submit it here.

    Levels of caregiving

    In most cases, you are not undertaking this in a bubble. You must navigate through family dynamics, often resulting in difficult and emotional conversations with your parents and other family members. You may need to consider difficult decisions, likely creating resistance as pride and independence are tested. From my experience, this has been the most draining part of this experience, both emotionally and physically. 

    Financial caregiving can fall into different levels depending on the capabilities of your parents. It could be simply providing your parents with advice and guidance in the form of reviewing and explaining financial accounts and documents. It could fall in the form of suggesting methods for better organizing their financial affairs. 

    If your parents’ health impairments are more advanced, an active participation may be necessary in the form of paying bills, filing tax returns on their behalf, or accompanying them to appointments with their bank or financial advisor. At the most extreme level—which is what I had to go through with my father—legal interventions using a power of attorney to make financial and health-related decisions on their behalf may be required, which require a high level of commitment and attention to detail.

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    More lessons to come

    In our upcoming series on MoneySense, I’ll be sharing the practical lessons learned from my journey: the essential documents you need to locate, the conversations to have before they become urgent, the financial red flags to watch for, and the systems that can help preserve your parent’s independence while protecting their financial security.

    While we can’t prevent our parents from aging, we can certainly be better prepared for the financial realities that come with it that hopefully will allow them to retain some dignity in their lives and set a positive example for our younglings to pay it forward. 

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    Read more about planning for (and in) retirement:


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    Aman Raina, MBA

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  • Dating dilemma: When to talk about finances – MoneySense

    Dating dilemma: When to talk about finances – MoneySense

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    There’s often a stigma around discussing money, but I’ve found it really helpful to have these conversations early and often. My husband and I have monthly budget review chats, and we’re constantly discussing our financial goals and how we can achieve them. Money has never been a taboo topic for us, and we discussed our debt loads, salaries, savings and attitudes towards money shortly after we started dating. It’s a trend that’s continued into our marriage, although now the topics of conversation are things like life insurance, registered education savings plans (RESPs) for our kids, wills and estate planning, and retirement, instead of whether we can afford that weekend trip to NYC.

    I love that money is an easy topic of conversation for us. I didn’t choose my life partner based on his financial footing, but in an increasingly challenging economic climate, financial health may be as important as looks, personality and intelligence when it comes to what people look for in a love interest. (See, for example, the short-lived new dating app exclusively for singles with good to excellent credit.) There’s a hitch, though: many Canadians find it incredibly hard to talk about money with a romantic partner.

    The most difficult topics for Canadian couples

    My husband and I are the co-founders of Willful, an online will platform. We were curious to know how comfortable Canadians are with discussing taboo topics, so, together with the Canada Will Registry, we commissioned an Angus Reid study to find out. It revealed that other than trauma, money is the hardest thing to talk about with a partner for the first time, followed closely by sex and death. This has led to Canadians delaying the discussion. The study, which polled over 1,500 Canadians, found that of the 77% who are in relationships, one-third (33%) didn’t start discussing finances with their partner until after a year of dating. Another 7% said they’ve never discussed their finances with a partner at all, and one-third have never talked about end-of-life planning.

    Avoiding money talk? You’re likely missing key financial details

    Over a third of survey respondents (39%) said they felt or will feel nervous discussing finances with their significant other for the first time. In addition, many respondents said they wouldn’t know how to access key documents and information in the event of an emergency. Over half of those in relationships say they don’t have a will, and even fewer know where their partner’s will is stored.

    This wasn’t surprising to us at Willful—we hear stories daily about people dealing with a loved one’s estate and trying to find key information like passwords to accounts, legal documents like wills, life insurance documents and other key info. In fact, that’s what inspired my husband and I to start Willful. His uncle passed away without having his end-of-life plans organized, and he was the sole breadwinner in the family. We saw first-hand how difficult it is to honour someone’s legacy while trying to find information and end-of-life wishes. That’s why we’re passionate about ensuring that Canadians are now having the important but tough conversations that will save their loved ones burden and conflict down the road.

    4 money moves to make as a couple

    So how do you get more comfortable talking about money with your partner? MoneySense’s articles about money and relationships (see links below) share these strategies:

    • Discussing finances early and often
    • Being upfront about key information like debt load, credit scores and savings
    • Setting a “money date” so you can get into a money mindset at a set date and time
    • Considering combining your finances through joint accounts and other tactics in order to have a shared financial picture and shared goals

    Whether you’re in a new relationship or already married, discussing money with your partner can set the stage for your shared financial success—and help you avoid conflicts over money—in the future.

    Read more about money and relationships:

    This article was created by a MoneySense content partner.

    This is not advertising nor an advertorial. This is an unpaid article that contains useful and relevant information. It was written by a content partner based on its expertise and edited by MoneySense.



    About Erin Bury


    About Erin Bury

    Erin is the CEO at Willful, a company that makes it easy to create a will online in less than 20 minutes. Willful has helped Canadians create over 300,000 documents since 2017.

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    Erin Bury

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  • Can you save on taxes by owning an investment account with your child? – MoneySense

    Can you save on taxes by owning an investment account with your child? – MoneySense

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    When you give cash or assets to a family member to invest, there may be attribution of that income back to you. Attribution causes income to be taxed on the original taxpayer’s income tax return. Attribution applies:

    • Between spouses. So, if a high-income spouse gives money to their low-income spouse to invest, with the goal of reducing their tax payable, the attribution rules apply.
    • To some income between a parent and a minor child. Interest and dividends are taxable back to the parent, but capital gains are taxable to the child. So, you can accomplish some income splitting with a minor child.

    Attribution does not apply between a parent and an adult child, unless the funds are loaned to the adult child at a low interest rate or at no interest rate. In the case of a low- or no-interest loan, where it seems the intention is not to truly gift the money, but to reduce tax payable on the income for a period of time, there is attribution. As with a minor child, it applies to interest and dividends, but not capital gains.

    Can you avoid capital gains tax by gifting an asset?

    When an asset is outright gifted to a child, there’s a deemed disposition. The asset is considered to be sold to the child at the fair market value, and any accrued capital gains become taxable. So, you cannot avoid tax by gifting an asset, like a cottage, for one dollar, for example.

    It does not appear you have made a gift to your son, Jing. You intend to continue to report the income. So, there is no capital gain and there is no attribution. You should just continue to report the income on your tax return.

    Legal ownership vs beneficial ownership

    This is a case where legal ownership—whose name is on an asset—does not match the beneficial ownership—who technically owns the asset. Legally, the account is joint. Beneficially, the account belongs to you.

    This creates tax consequences for you that may be unintended. Trust rules have changed for 2023 and future tax years. If you have an account, like your brokerage account, Jing, where the legal and beneficial ownership are different, you need to file a special tax return.

    New trust reporting rules for 2023

    A T3 Trust Income Tax and Information Return is used by trusts to report trust income as well as information about the settlor, trustees and beneficiaries of the trust. Although you may not have established a trust with a lawyer, or even consider this joint account to be a trust, the Canada Revenue Agency (CRA) considers it a trust.

    The CRA makes an exception for “trusts that hold less than $50,000 in assets throughout the taxation year (provided that the holdings are confined to deposits, government debt obligations and listed securities).”

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    Jason Heath, CFP

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