Today’s seniors can expect to live longer and healthier lives than any previous generation. But a longer life span may also increase the chances that, at some point, you will experience a health event that will affect your ability to manage your financial affairs on your own – even if only for a short period. Ensuring that your personal and financial affairs are well organized in advance will make it easier for someone to step in and help out if needed. And you will gain peace of mind knowing that you have done all that you could to ensure your financial affairs will continue to be managed as you would yourself.
On this page you’ll find
Preparing for the unexpected
- Determine who can help manage your personal and financial affairs, such as a trusted family member, friend or associate.
- Take the time to communicate your wishes and plans to family members and your trusted contacts – both in person and in writing.
- Create a package of important information your designated power of attorney can access if needed.
Determining who can help
Trusted family members and friends can take on many roles in times of need, but only someone designated as a continuing or enduring power of attorney for property can manage your finances on your behalf. This person is referred to as your attorney for property (not to be confused with your lawyer). Note that it is not the same as a power of attorney for personal care. Some qualities to think about when deciding who to trust include:
- Trustworthy – someone whose day-to-day conduct reflects high ethical standards. Ideally, without high levels of personal debt or addictions that might lead them to use your financial assets in their own interests.
- Geography – resides close enough to be able to meet with your financial advisor(s) in person.
- Temperament – is comfortable making decisions – and comfortable with the idea of making them on behalf of someone else.
- Financial capability – is able to understand your finances and make knowledgeable decisions.
- Willingness – understands and accepts the legal responsibility they are taking on.
- Accountability – will spend the time needed to understand your wishes and can be counted on to act accordingly.
Discuss your wishes and plans
Your attorney for property is just one of the people you should discuss your plans with. It is difficult to have conversations about illness and death with loved ones, but it is extremely important. As hard as it may be for you to consider your own mortality, family and friends may be even less ready to consider the inevitable. You can start the conversation by acknowledging their discomfort and then ease into the subject:
“There’s something I’d like to talk to you about. I know it’s an uncomfortable topic but it’s important to me that you know my wishes if I am ever unable to look after my own affairs…”
Be clear about who would be making decisions on your behalf. Let family members and involved friends know who you have designated as your attorney for property including financial matters (and for personal care if it is someone else) and ensure that everyone understands the circumstances under which you have authorized the attorney to take over. Answer questions openly and honestly, and back your discussions up with written instructions to reduce the likelihood of uncertainty down the road.
Introduce your designated power of attorney for property to your professional advisors – legal, financial. Discuss your wishes with everyone present and ensure all conversations are properly documented so that your attorney and professionals will all be on the same page should the time come when you are unable to manage your affairs on your own.
Create an information package
Create a package of all your important personal and financial information. This Personal Information Inventory document is a handy way to organize your information in one place. It will help your power of attorney or trusted contacts easily locate key details in the event you are unable to provide guidance.
Be sure to store your Personal Information Inventory and other important documents in a secure location, such as a home safe or safety deposit box. Do not store or share the completed document electronically and avoid making copies.
If you have investments, work with your financial professional to create a written investment policy statement (IPS) that your financial advisor can hold. An IPS provides a framework that you, your advisor(s) and others can refer to when making investment decisions. It includes information about your investment goals, preferences on a range of investment questions, and values – for example ethical factors important to you. If you manage your own investments, use the blueprint provided in the link above to help you create your own IPS and store it along with your Personal Information Inventory. Make sure that your power of attorney knows where the documents are stored and has the ability to retrieve them quickly.
Here is what to include:
- List all your bank accounts, investment accounts, and credit cards with details and contact information.
- Keep a copy of your latest account statement(s) in your information package.
- Include a copy of your will, living will, power of attorney, and other estate documents.
- Indicate the location of the original signed copies and contact information for attorneys or executors.
Regular expenses, payments, and debts
- Keep a list of all regular bills (utilities, car leases, insurance premiums, lawn care services, etc.) and frequency of payments.
- List your debts (such as a mortgage, line of credit or loans).
- Include information for automatic deductions/payments.
Sources of income
- List your sources of income and benefits your family members may be entitled to receive (income, life insurance, pensions, annuities, and other benefits).
Other documents and valuables
- List all your major assets (home, real estate, other investments, and collectibles such as art or jewelry that have substantial value).
- Itemize any monies owed to you, e.g. loans to others, outstanding settlement payments.
- Your most recent tax filing and CRA assessment notice.
- Policy numbers and contact information for insurance policies (life and property).
- List any pre-planning funeral or cremation arrangements.
- Copies of personal documents such as a passport, birth certificate, marriage/divorce certificate, deeds for your home, etc.
- Appraisals for any valuables such as art or jewelry and where located.
- Safety deposit box location and where to find the key.
So much personal and financial information is now being stored on digital devices, this is a key area not to overlook. To increase the security of your digital accounts, consider using a Password Manager application to securely store your digital passwords.
List information for:
- Computers and mobile devices
- Digital investment and bank accounts
- Email and social media accounts
- Media subscriptions (news, movies, music, books, games, etc.)
- Credit card loyalty rewards or points programs
Remember to review your Personal Information Inventory document periodically to ensure the information is up to date.
Create an Investment Policy Statement either with your financial advisor(s) or on your own.