# What happens if / when you lose the ability manage your money



## naysmitj (Sep 16, 2014)

With no administered private pension other than CPP and OAS we are trying to understand how to set up our retirement savings so that, if due to health issues, we are no longer able to administer it ourselves. This is becoming a concern as we watch some friends now struggle with debilitating health issues which essentially make them incapable of handling money. We do not have a huge nest egg, so we are limited in our choices.
What plans have people here made?


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## RBull (Jan 20, 2013)

You need to set up a power of attorney.


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## Just a Guy (Mar 27, 2012)

And hope that whomever you choose doesn't steal all the money for themselves.


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## birdman (Feb 12, 2013)

I wouldn't be overly concerned about an attorney stealing your money. Yes, it can happen but it is illegal and financial institutions have some safeguards (at least they used to) in that attorneys cannot withdraw cash. You didn't provide many details of your financial situation but you could take some precautions if you have significant other assets. For example, you could structure your accounts and assets so that the power of attorney is only over your bank account where your gov pensions are deposited and do not let it cover any investment accounts you may have. Similarly, do not let it cover your other assets such as real estate, vehicles, etc. In any event, just be cautious in selecting your attorney and I think you are on the right by posting on this forum and I expect others will have some other options.


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## Just a Guy (Mar 27, 2012)

Power of attorney is not the same as having an attorney or bank being the power of attorney. Anyone can be granted power of attorney. Many times it's given to family members. I know numerous cases where the kids have spent all the money that was supposed to take care of parents, or taken money so other kids had nothing when the parents died. 

I also know institutions which legally charged excessive fees when acting as power of attorney and depleted the saving of the people they were charged with looking after.

You are giving up complete control of your finances, so be careful who you give the power to.


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## fatcat (Nov 11, 2009)

assuming you no family or friends to whom you would entrust a power of attorney

i would do two things:

1) find a good investment advisor who will manage your investments, there are good companies out there who will work for flat fees of around 1% and then i would outline by direction how you want your money invested in terms of stocks / bonds and risk

2) i would make your will and health directive with an attorney you trust and have him work with the investment advisor in the case of your incapacity

this gives you two people who are professionals and who know your wishes ahead of time ... they would presumably be somewhat at odds in terms of their responsibilities and would thus keep an eye each other since both are bound by law to act well

finally, depending on your age assets and income you might just think of converting some of you investments into annuities which essentially give you income which cannot be tinkered with


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## Beaver101 (Nov 14, 2011)

^


> this gives you two people who are professionals and who know your wishes ahead of time ... *they would presumably be somewhat at odds in terms of their responsibilities and would thus keep an eye each other *since both are bound by law to act well


 ... hmmm... I have a question - what happens if they do collaborate with each other and only have eye on the big pie of yours? 50/50 split?


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## birdman (Feb 12, 2013)

Just a Guy: Yes, and I am quite familiar with Powers of Attorney. When I was in the business (F/I's), account holders frequently appointed a power of Attorney which was just for the ONE bank account. It was not the same as a Power of Attorney which covered all assets (as often accompanied in a will) but just a simple appointment which allowed the attorney to deposit cheques and pay bills. Like I said previously the attorney was not even allowed to withdraw cash. In such a case the downside would be limited to the available funds in the account. These were regularly used in such instances as suggested by the OP. Also, the P of A was cancelled upon the death of the account holder.


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