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Email this7:28 am
December 17, 2016
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Bill said
I see. After taxes on the investment income and the increased bed rate payable maybe just throw the million bucks in the safety deposit box.
WELL, funny you should mention that BECAUSE there is lots and lots of bitching that goes on at the facilities about a certain demographic of people who clean out their aging parents wealth THEREBY only having to pay the minimum and most likely that minimum has to be further taxpayer subsidized.
In order to do the above, you have to be ahead of the curve and all known "beneficiaries" would have to be in on the plan.
ME, as the POA, I'm so damned honest that I didn't even think to propose such a thing to the beneficiaries. Anyway, what's the chances of agreement with me telling those beneficiaries that I'm just going to park the 6-figure sale, in cash, in a safety deposit box - trust me it's all good!!
8:22 am
October 27, 2013
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Top It Up said
ME, as the POA, I'm so damned honest that I didn't even think to propose such a thing to the beneficiaries. Anyway, what's the chances of agreement with me telling those beneficiaries that I'm just going to park the 6-figure sale, in cash, in a safety deposit box - trust me it's all good!!
Gaming the system by stripping an elderly person of assets and/or income in order to get more out of the government is about the worst psychological thing one can do to a vulnerable elderly person.
Everyone's situation is different but my brother and I didn't mess with the public system. Our mother had the resources, having sold her home at age 92, to simply tap into her capital from the house sale to live out her days, until she died at 96. She could have easily started that process 10 years earlier, counting on using about 10% of her capital every year to support herself in an independent facility with increasing daily support from a menu of items as she became more frail.
POAs can do the math to see what is required beyond CPP/Survivor's pension/OAS and even GIS to keep the cash flow moving. The difficult part is when the senior has no assets, i.e. either an investment portfolio or the capital in a home, to supplement annuity income.
Of course, it is way more difficult when a person is incapacitated in their '70s and could live another 20 years. That is not a common occurrence though. Most who get to the point of needing 'assistance' in daily living are within 10 years of their expiry date.
8:45 am
December 17, 2016
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AltaRed said
Everyone's situation is different but my brother and I didn't mess with the public system.
[...]
POAs can do the math to see what is required beyond CPP/Survivor's pension/OAS and even GIS to keep the cash flow moving.
Straying further from the topic BUT sharing my experience as information for others.
When dealing with individuals with say, full-blown Dementia, the options for care are incredibly limited in that there are so few private facilities that offer complex care. In MY experience, and if you were very lucky to find a bed available, the typical monthly rates were very near DOUBLE those of the public offered facilities. Further, from sharing experiences with someone who was well-versed in private care, the level of care for someone with complete mental incapacitation in a private care facility, at DOUBLE the cost, was NO different than the level of care in a public facility.
9:08 am
October 21, 2013
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I could write reams about this topic but I'm not going to.
I will just say that anyone who is dealing with this situation needs to be extremely careful that they have the correct information.
Never put significant amounts of money in a safety deposit box. You will lose the paper trail and it will be difficult to deposit that money to an account later.
Look into what the system is in your province - in detail.
If you want to know about CPP survivors pensions, read the legislation, not the government blurb, which leaves out a great deal.
10:23 am
December 12, 2009
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Loonie said
I could write reams about this topic but I'm not going to.
I will just say that anyone who is dealing with this situation needs to be extremely careful that they have the correct information.
Never put significant amounts of money in a safety deposit box. You will lose the paper trail and it will be difficult to deposit that money to an account later.
Look into what the system is in your province - in detail.
If you want to know about CPP survivors pensions, read the legislation, not the government blurb, which leaves out a great deal.
Very true, especially the last part. I find our current and previous federal government, probably has more to do with the public service though (or "deep state," which does exist and is a very real thing in terms of institutional bias and being reticent to change), loves to try and summarize things in plain English on websites and in nice brochures/pamphlets, or ephemera/bumf, two words I've learned in my courses. This is good, for most things, for people looking for basic and even somewhat intermediate level of understanding into various programs and government policies. The problem is when you're looking for finite details, the minutiae, etc., and there's that ever-present fine print clause, "in the event of a discrepancy between the governing legislation and this informational document, the legislation shall prevail." I suspect in the case of survivor's pensions, I suspect there's much more than meets the eye, as you've likely discovered already Loonie. 
As to my grandma's situation, she's OK right now and I'd generally agree with you that it'd be best she stay where she is. I actually think she could live with her daughter & son-in-law now that they've moved here, if they had a one-floor no-step rancher-style home. They rent two-storey home and confining her to the main floor doesn't seem right. And, trying to find a one-floor, no-step rancher-style home in Kelowna that's affordably priced in terms of rent would be extremely hard to come by, I suspect. She's a bit unsteady and requires a cane or walker to move about.
She's OK now in terms of her income generally covering her expenses but I'd like to see there being a bit of something left over to divide equally between her four children and the two daughters from her second marriage, who is the grandpa I've only ever actually met and passed away in 2011.
She was born in March 1931 (her first husband in 1912 and the second in 1924). She received a CPP survivor's pension while still working at Scotiabank or CIBC (can't remember if she'd moved to CIBC yet at that point) in 1978 from her first marriage. When she re-married about 4-5 years later, she still received the CPP survivor's pension but I'm wondering if they would've switched her to the CPP survivor's pension of the second spouse in 2011? I tend to think not so that's OK. At any rate, it sounds like she's not entitled to two CPP survivor's pensions then, right? Seems kind of unfair but, then again, at least the second spouse enjoyed nearly or over thirty years of his CPP pension and likely got more than he put into it. I feel badly for people that die when they're in their early to late 60s and barely get anything. I think CPP should have a minimum guaranteed payout, like most annuities. 🙁
Another thing was, according to my grandma, she wasn't eligible for Scotiabank's and CIBC's pension plans (whether contributory or non-contributory) because she was a woman, even through to the mid- to late-80s when she retired. Is that true!? That just also seems so young. Gotta love our "forward-thinking" banks.
A final point on her rent costs: I'm assuming she may live another five years in her current residence and then still have to go into independent and/or residential care. It's quite likely she might never need a more senior level of care (pardon the completely unintended pun ;)), right? And, perhaps, that'd actually be a good thing. It'd be nice if she could just pass away peacefully in her sleep one night in her bed in the private retirement residence. That's supposedly something many of us wish for. 🙂
Cheers,
Doug
10:39 am
April 6, 2013
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I don't think one will need to put the $1 million in a safety deposit box.
Line 236 is net income. There no capital gain on the sale of one's principal residence. So, Line 236 is not affected by the sale.
Any gains from investing the $1 million proceeds will ultimately increase net income on Line 236. However, one can deposit the $1 million in a bank account that pays no interest or see if there is a waiver available for the interest. Many of the banks have interest waivers for their accounts to accommodate those who don't want the interest.
10:52 am
December 12, 2009
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Norman1 said
I don't think one will need to put the $1 million in a safety deposit box.Line 236 is net income. There no capital gain on the sale of one's principal residence. So, Line 236 is not affected by the sale.
Any gains from investing the $1 million proceeds will ultimately increase net income on Line 236. However, one can deposit the $1 million in a bank account that pays no interest or see if there is a waiver available for the interest. Many of the banks have interest waivers for their accounts to accommodate those who don't want the interest.
I haven't heard of that re: an interest waiver. You could also just stick it in an non-interest bearing account if the intent is not to generate any return on your investments that would increase your taxable income. I see the point that. The banks must love that. Another reason to stick it in a non-interest bearing chequing account with a credit union and help boost the credit union's Net Interest Margin. 🙂
Cheers,
Doug
10:54 am
September 11, 2013
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I agree, Norman1, I should have put "safety deposit box" in quotations, I meant it as a euphemism for putting your money somewhere safe without regard to making any, or minimal, income from it. And I don't see it as gaming the system - if the rules consider only income instead of net worth then it's only prudent to plan your affairs to your benefit according to the rules.
But I must admit I'm puzzled by all this talk about beneficiaries and the care of old folks. These to me are different topics. When I'm old and demented my financial affairs (income, assets) continue to be none of anybody's business except for my POA. Seems like a lot of beneficiaries out there somehow think they should have input into what their future benefactor does with her money while she is still alive. I'd tell them to bug off, their status as beneficiary does not come into existence until the moment after my death, and in the meantime I'd be happy to have their suggestions or help re my care options but I and/or my POA will figure out the money part while I'm still alive, thank you very much. If there's any left after I'm gone, that's when beneficiaries can show an interest in my money & stuff
10:57 am
December 17, 2016
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Well, Bill, you can pass over my use of beneficiaries BUT in a number of provinces POAs can be required to produce a yearly statement of accounts, if requested, by immediate family members AND for the most part, but not always, the immediate family members are usually the beneficiaries.
11:04 am
December 12, 2009
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Top It Up said
Well, Bill, you can pass over my use of beneficiaries BUT in a number of provinces POAs can be required to produce a yearly statement of accounts, if requested, by immediate family members AND for the most part, but not always, the immediate family members are usually the beneficiaries.
Interesting; didn't know that. I bet B.C. is probably included in that, given it has some of the stricter rules regarding enduring POAs. 🙂
Is "grandson" considered to be "immediate" family member? My dad was and is still the original POA (it's not been revoked) for his mom, as per her and her second husband's wishes before she lost some of her mental faculties. My uncle, in his infinite (lack of) wisdom and seemingly always feeling slighted, decided to usurp my dad and get a joint POA from my grandma using a different lawyer. I question that lawyer's ethics being willing to sign off on that with a woman diagnosed with a form of dementia. 🙁
Interestingly...he's a commercial property manager, alongside his wife (and my aunt) who is also a strata manager as well and would be known to have to have a fiduciary responsibility in handling their property owners' finances and related affairs. Doesn't say much for property managers. 🙂
It's OK...I'm keeping a watch of it, from behind the scenes. If I get even a whiff of the will trying to be changed, I'll make an anonymous tip to the Public Guardian and Trustee to step in or, if I have to, apply for a committeeship from the court. I would hate to see senior citizens taken advantage of. 🙁
Cheers,
Doug
11:29 am
December 17, 2016
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Norman1 said
However, one can deposit the $1 million in a bank account that pays no interest or see if there is a waiver available for the interest. Many of the banks have interest waivers for their accounts to accommodate those who don't want the interest.
I'd have to say, from personal experience, that likely is going to require some long explanation and a whole lot of calculations and graphs for family stakeholders to understand why the POA isn't just investing that damned $1 million - particularly since, the monthly care bed rate is capped.
11:38 am
September 11, 2013
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TopItUp, not sure what you mean by "pass over" but I've no doubt you did what was completely appropriate given the people involved in your situations, I meant no criticism. I was just indicating that (to me) the money spent on and the nature of my care while alive is a separate, unconnected topic to the one re what my Will says about any remaining pile.
And I can see why POAs need to account to other family members who want to check that their aged relative's accounts are not being drained improperly of money the relative may need, that they are not being left destitute by the POA. That's the way I'd look at that, that it's not mainly about making sure the beneficiaries' interests after death are protected.
Don't know why, not based on any personal bad experiences, but I do admit I'm extremely wary of anyone (aside from my spouse), related or unrelated, who's interested to even a small degree in my income, assets, financial situation. When you've been around as long as me you seen enough (even at a distance) to know that in any group there is often someone who will do some unsavoury things to get at the money.
11:45 am
September 11, 2013
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Doug, not sure what constitutes an "immediate" family member for your purposes but for income tax a grandchild is considered to be "related" to a grandparent, is considered not to be at arm's length. So maybe the legal principle is the same in your case.
12:01 pm
December 17, 2016
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Bill said
I was just indicating that (to me) the money spent on and the nature of my care while alive is a separate, unconnected topic to the one re what my Will says about any remaining pile.
And I hear you loud and clear.
Non-family POAs sometimes walk a delicate line but, if the POA document is/was well-constructed, with respect to finances and well-being, the POA pretty much has the p-off as their veto.
2:15 pm
December 12, 2009
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Bill said
Doug, not sure what constitutes an "immediate" family member for your purposes but for income tax a grandchild is considered to be "related" to a grandparent, is considered not to be at arm's length. So maybe the legal principle is the same in your case.
Thanks Bill. That's helpful. 🙂
Cheers,
Doug
7:41 am
April 6, 2013
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Doug said
I haven't heard of that re: an interest waiver. You could also just stick it in an non-interest bearing account if the intent is not to generate any return on your investments that would increase your taxable income. I see the point that. The banks must love that. Another reason to stick it in a non-interest bearing chequing account with a credit union and help boost the credit union's Net Interest Margin. 🙂
Non-interesting bearing accounts weren't very common. Even now, I see a few cents of interest on my chequing accounts when money moves through them between rate offers.
I think the waivers are to accommodate customers who are not permitted to receive interest because of religious beliefs.
Another possible reason is for hiding money from spouse. Wouldn't want a T5 slip showing up for the account at tax time. Spouse may be financially astute and realize $1,000 a year of interest implies $50,000 to $100,000 of principal! 
7:54 am
April 6, 2013
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Top It Up said
I'd have to say, from personal experience, that likely is going to require some long explanation and a whole lot of calculations and graphs for family stakeholders to understand why the POA isn't just investing that damned $1 million - particularly since, the monthly care bed rate is capped.
Does the resulting clawback through the bed rate increase end up being more than 100% of the potential after-tax investment income?
Some of the clawbacks can be hefty. I remember reading that low-income seniors who receive GIS can face GIS clawback of 50% on additional income. That's on top of any regular income tax on the additional income.
8:20 am
December 17, 2016
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Norman1 said
Does the resulting clawback through the bed rate increase end up being more than 100% of the potential after-tax investment income?
I have absolutely no idea - I didn't do the calculations then and I'm not going back into the paperwork to do the calculations now.
10:19 am
December 12, 2009
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Norman1 said
Non-interesting bearing accounts weren't very common. Even now, I see a few cents of interest on my chequing accounts when money moves through them between rate offers.I think the waivers are to accommodate customers who are not permitted to receive interest because of religious beliefs.
I guess that's true, yeah, but still, depending on the FI, some FIs have a 0% interest rate on chequing accounts, regardless of balance. I think HSBC dropped the rate on their chequing account interest rate "tiers" to 0%, for example. Coast Capital Savings doesn't pay interest on any balance of the Free Chequing, Free Debit and More Account but does on their Classic, Prestige and Seniors packages. 🙂
Regarding the latter, I wonder what religion(s) are opposed to that. I doubt it's Buddhist, based on the clientele that HSBC targets. Probably some form of Islam, I guess, eh?
Norman1 said Another possible reason is for hiding money from spouse. Wouldn't want a T5 slip showing up for the account at tax time. Spouse may be financially astute and realize $1,000 a year of interest implies $50,000 to $100,000 of principal!
LOL, Norman! Are you speaking from personal experience there (hope Norman's spouse doesn't find his posts! ;)) or just generalizing?
Cheers,
Doug
10:24 am
December 12, 2009
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Top It Up said
I have absolutely no idea - I didn't do the calculations then and I'm not going back into the paperwork to do the calculations now.
If a person with GIS only has a small savings account balance, say $25-50,000, then yeah I can see the point of forgoing the interest. However, if they're intentionally keeping their income low by not touching hidden away savings and investment assets, that's wrong on so many levels, sorry. GIS and Spouses Allowance are federal income assistance programs targeted at the lowest income seniors. They are not, however, old age entitlement programs or a pension plan in any way. Only the most needy should earn those. 🙂
I would, however, support offering ending the requirement to be receiving GIS or Spouses Allowance for the lower cost BC Bus Pass Program. I think that should actually be available to all B.C. residents, 19+, that is means-tested like MSP Premium Assistance based on one's previous year's adjusted net income (i.e., Line 236 less certain additional allowances). In some cases, the very lowest would pay nothing for an annual bus pass if they are of the lowest income. 🙂
Cheers,
Doug
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