All About Estates

A Perfect Storm

First I read an article in Maclean’s titled Seniors and the generation spending gap (interestingy, the tablet edition has the more provocative title “Old and Loaded”) which discusses how today’s seniors are the “wealthiest generation in history”.

Next, I read Audrey’s blog – September is World Alzheimer’s Month – where I learned that one in 10 Ontarians over the age of 65 has dementia.  We’re also told by 2031 all baby boomers will have attained this milestone – if the 10 percent holds, we’re in for a tsunami of seniors with impaired mental capacity.

Finally, I came across a recent article by Lewis Braham in the Globe & Mail titled When your ageing parents need a daily money manager.

The Maclean’s article tells us that seniors have seen their wealth quadruple since 1984 and that while Canadians age 75 and older make up less than seven percent of the population, they control more than one-third of all financial assets (roughly $1 trillion worth and this doesn’t include the value of real estate).  Audrey’s entry reminds us that at least 1/10th of this same group has dementia.  The Globe article draws the line between these two stories.

Braham’s article provides a few examples of U.S. seniors who turned to a “Daily MoneyManager” for assistance in managing their financial affairs.  Services provided by Daily Money Managers include:  filing tax returns, paying bills and keeping clients on a budget.  Braham notes that “demand for daily money management services as America ages is likely to grow significantly, but at least for now the profession is virtually unknown”.  He adds that although certification is available through The American Association of Daily Money Managers, there’s no government regulation.

As far as I know, there is no such thing as a Daily Money Manager designation in Canada.  That doesn’t mean the services they provide are unavailable in Canada. The banks, via their trust company arms, offer products and services very similar to those Braham describes.  The services are designed to assist individuals – most frequently seniors – who are looking for professional assistance in managing and protecting their financial affairs.  Services include:  bill payments, income collection, consolidated record keeping and income tax preparation and filing.  Investment management and review of a client’s estate plan are also available.  The reasons cited for using a Daily Money Manager – no family or children, have children but not local, children are too busy, elder financial abuse, wants to enjoy retirement and delegate the administration of their finances – are the same on both sides of the border.

It’s important to note that these services are designed for individuals who would benefit from assistance in managing their financial affairs and are still mentally capable.   If and when a client loses mental capacity, activation of a continuing power of attorney for property is a further step along the continuum of services a trust company can provide.

The fact these services are offered by tightly regulated trust companies, often owned by large, financially sound banks, with staff experienced in managing fiduciary accounts, should allay some of the concerns (potential for fraud, basic competency) Braham raises in respect of the unregulated Daily Money Managers.

To learn about these  ”financial security blanket” services, visit your bank’s website.

About Elaine Blades