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part ii

Christopher O Driscoll

Even at 86, she isn't afraid to take a risk - you don't lose almost a half-million dollars by playing it safe. But where, her family wants to know, was her financial adviser as she pumped her life's savings into volatile mining shares? And how can someone that old, having suffered a stroke and been diagnosed with frontal lobe dementia, be allowed to sign a form stating that she has an "excellent understanding" of the stock market?

By the time the complaint, which is still outstanding, reached Douglas Melville, Canada's banking ombudsman, the woman's portfolio was down an alarming $470,000.

For another elderly woman, family was part of the problem. After being diagnosed with cognitive impairment, she wisely turned over her financial affairs to her daughter. But she retained joint control of her account, which was all an unscrupulous relative needed to have her co-sign for a pair of hefty bank loans.

With dementia on the rise as the population ages, Canada's financial and legal systems are beginning to realize how ill-equipped they are to deal with the growing number of people unable to administer their own affairs. Some are being taken advantage of, defrauded in a variety of ways, while others are being given bad advice, even by lawyers, financial advisers and family members with good intentions.

How serious is the problem? Nobody knows for sure - because nobody is keeping track.

The Ombudsman for Banking Services and Investments, the agency that investigates public concerns involving 600 financial institutions, has not been tracking how many of its cases involve dementia. But when Mr. Melville, appointed its head about a year ago, was asked to look into the situation, he quickly found several such cases filed last year alone.

And dicey investment is far from the only dementia-related problem facing the courts and business community. An ever bigger issue is a rising tide of family friction. As their parents live longer, many Baby Boomers find that divorce and a tendency to live beyond their means have left them short of cash. Eager for their inheritance, some are cutting corners to speed things up.

Whether it's fraud or feud, says Toronto lawyer Jan Goddard, diminished mental capacity makes almost anyone a potential victim. "It would take a lot of influence to get any of us to do something we don't want to do," she explains, "but it doesn't take much if we have dementia: All I have to do is lie to you."

As a result, financial abuse is increasing, along with pressure to do something about it. Many financial institutions operate on the understanding that buyers must beware, says Laura Watts, national director of the Canadian Centre for Elder Law in Vancouver, but "I'm not sure that system will stand up."


Clearly it's wrong to take advantage of someone, but the banks claim that dementia puts them in a sticky situation at the best of times.

They say the condition isn't always readily apparent, and it's awkward to question an elderly person's mental faculties and second-guess a transaction. "If the client comes in to co-sign" a loan for someone else, Mr. Melville asks, "does the bank have the right to challenge that?" To do so on a regular basis could amount to age discrimination.

Even preventative measures aren't always enough, he says. His office was alerted last year when a free-spending dementia sufferer was issued a credit card even though her family had flagged her credit profile to keep that from happening. Somehow she evaded the restriction by applying for a pre-approved card and spent $1,000 before anyone noticed. The credit-card company ended up eating half the cost.

Mr. Melville blames much on a lack of consistency. "What we're seeing is a wide range of approaches to dealing with the problem in society," he says. "Legal documents, powers of attorney, different banks with their own internal policies, provincial guardian offices, social agencies - it's not co-ordinated. It's creating a range of different failures in the system."

The rising number of "failures in the system" is helping to make dementia a staple of Canada's court system, but lawyers say the biggest contributing factor is family battles over the assets of parents who can no longer make financial decisions for themselves.

"You used to wait until the person was dead, and then the heirs would have arguments about the estate," says Elder Law's Ms. Watts. "Now the fights are happening over whether the person is cognitively impaired... and sometimes it's the family members fighting each other."

Arthur Fish, an estate lawyer in Toronto, tracks the trend to impatient heirs: "Older people control a disproportionate share of the wealth," he says. "So you've got all this wealth, and then you go down a generation and that's a very, very [financially]stressed generation."

Often a relative suddenly appears offering to help care for an older person, perhaps receiving power of attorney in the process. It's a scenario now so familiar, Ms. Goddard says, that "we actually have a term in our business: We call it the 'nephew-come-lately.' "

Concerned family members can resort to the law, Mr. Fish says, but '"once things get into the courts, they drag on, and you can end up with a horrible situation where an older person's assets are frozen because someone who is supposed to be looking after him or her has gone astray."

According to Ms. Watts, when families drop the gloves, the only real victims are the people who are impaired. "Their own funds are being used to fuel the fight," and sometimes even their mail is stopped until the mess is sorted out.

All of which is beginning to grate on those required to do the sorting out.

A family feud so irritated one judge that he sent a message to all members of the bench suggesting the courts stand up to misuse of the legal process. Mr. Justice Dennis Brown of the Ontario Superior Court had watched as the three children of 87-year-old Ida Abrams spent almost five years battling over what each would inherit even as their mother was being overtaken by dementia.

"Each, in his or her own way, has bickered and delayed," Judge Brown wrote, "leading me to believe that Ida's best interests have been shoved to the back seat ... Had any of the parties really cared about Ida's well-being, they would have had this matter adjudicated yesterday."

Ms Goddard fears that changes to the legal system may be encouraging litigation. It has become increasingly easy to obtain power of attorney, with do-it-yourself kits, much like tax-return software, widely available in much of the country. Some provinces, including Ontario, provide them free of charge.

To deter the larcenous, some jurisdictions - such as British Columbia, Britain and New York State - have introduced public registries for power of attorney, although an opposition member's attempt to create one for Ontario was defeated in the legislature in March when a government MPP argued that making such information public goes against many of the wishes of elderly people.

Much family bickering also revolves around what people with dementia really want, which can be incredibly difficult to determine.

This issue was central to the notorious case of Helena Munroe, a Nova Scotia expert in dementia who, at the first sign she had Alzheimer's herself, began to get her affairs in order. She gave power of attorney to her husband, but her family suspected she did so against her will. One day her brother arrived to take her out to lunch but instead put her on a plane to England, sparking an international outcry and court battle. She was allowed to return to Canada only after she died last year - to be buried.

"An expert in dementia who thought she had taken care of all the necessary things ... and it wasn't enough - it was really quite sad," says Jeanne Desveaux, the husband's Halifax-area lawyer.

"I really think this is a wake-up call."

Is the wake-up call being heard?

Canada is, according to Ms. Watts, "somewhat behind in its planning for an aging population," but in the United States, several groups are working to draw attention to the fact dementia makes people vulnerable to financial abuse and do something about it.

One initiative launched this summer is the Elder Investment Fraud and Financial Exploitation Project, which will help doctors and nurses spot potential trouble and alert the authorities. It is a joint venture by securities regulators, an adult protective services group and leading medical associations, which say they are especially concerned about seniors with mild cognitive impairment.

The U.S. program has prepared a pocket guide for medical professionals with questions they can ask patients (Do you have a will? Has anyone asked you to change it?), red flags to watch for (someone who supports a relative financially or is accompanied by an overly protective caregiver) and places they can turn for help.

Meanwhile, in Canada, the National Initiative for the Care of the Elderly began a research project this year in a bid to determine how widespread elder abuse is. It designed a special pocket guide that includes financial as well as physical and psychological abuse, but it does not deal specifically with dementia.


For their part, financial institutions claim the issue is on their radar.

Lee Anne Davies, head of retirement strategies at Royal Bank of Canada, says the country's largest bank realizes it must prepare. "What that means is that our sales force, our advisers, need to have some good understanding of what aging is all about and what dementia means," says Ms. Davies, who has a master's degree in gerontology.

She says that dementia is touched on in the guidance RBC gives its employees on how to deal with clients as they age. If concerned about someone, however, a staffer will seek advice from a more senior employer rather than reach out to a medical professional. "The most important thing is the dignity of the clients and making sure we're doing the right thing."

And Mr. Melville, the banking ombudsman, argues that forewarned is forearmed. It's all well and good for aging parents to enlist help with their finances, he says, "but as soon as someone is on a joint account with you, they have a right to every dime in that account ... People don't realize that."

In other words, it's still buyer beware.

Grant Robertson and Tara Perkins write on banking and financial services for The Report on Business.

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Frauds and feuds: Dementia's open invitation to greed.


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Early diagnosis: Would you want to know?


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