One of the last bastions of independence that an older adult has is the ability to stay in one’s home. In our country, this desire is supported by various agencies, which facilitate the right of each of us to remain living on our own for as long as possible. In Ontario, this agency is called the Community Care Access Centre (CCAC). It coordinates various types of personal care assistance in the home and will provide whatever help is reasonably appropriate to maintain the independence of our seniors in their home for as long as possible.
The desire to remain in one’s home is based largely upon connections with neighbours and friends, local merchants, and professional caregivers such as doctors, dentists, and pharmacists, who are all part of the supportive network available to the senior citizen who wants to stay in familiar surroundings. The CCAC can organize home medical care for an elderly person during a convalescent period following a hospital stay in order to ensure the proper administration of medications and to maintain the necessary hygienic conditions key to the well-being of the convalescing individual. Counselling on proper nutrition, as well as preparation and delivery of meals to the front door, can also be arranged. Such assistance is also available to an elderly person who has simply become too frail to carry out these tasks alone. These government-assisted programs have not always been there for the elderly.
If any of our senior citizens were to reflect on their own family situation 50 years ago, they would likely remember that their grandparents were living with them and that the obligation to look after elders was primarily familial. This was the result of two main factors; the first being the larger size of families at the time, which created a larger pool of caregivers, and also the lower life expectancy of the average Canadian, which shortened the period of need.
The assumption by the state of these responsibilities for the elderly has grown out of a trend towards smaller families and the improved health conditions of Canadians, leading to greater longevity.
The conditions following World War II also released large numbers of women into the workforce. Women, who were the traditional caregivers, then became more and more unavailable to look after the elderly in their homes.
Two-income families have since become the norm for most Canadians, and the simple truth is that with nobody staying home, male or female, the state by default had to pick up the challenge of looking after the elderly. The cost of taking over this privilege, or obligation, depending on how you look at it, is sustained in part by a wealthier elder generation who can support themselves and by increased government subsidies for those who need financial assistance to pay for their care during their declining years.
Many different cultures coming to Canada in the last fifty years have brought with them their own traditions, which include caring for the elderly by family members. How long this will last may depend upon the influence of economic pressures of living in Canada. Many seniors and their families still long for the continuation of these traditions and this has lead to the appearance of private care arrangements. This is partly a function of senior citizens owning their own homes and having the ability to pay for their own care. These senior citizens have taken it into their own hands to trade money or property for the promise of accommodation and personal care in the future when they need it. Characteristically, these arrangements are made with members of their own family.
My concern stems from the fact that I have not, to date, had a single elderly client approach me to create a legal contract that would define the terms and conditions of this arrangement between family members. It is, in my view, imperative for elderly
persons and their proposed caregivers to define their roles and what, if any, financial reward will flow from taking over the care of the older person. It is a combination of the wish of the elderly to stay at home in familiar circumstances and their fear of institutional care that makes them vulnerable in negotiating these private care arrangements with members of their family. In my experience, these arrangements are often verbal and often without the benefit of any legal advice.
There are risks to both parties in a private care arrangement. For the senior, a transfer of the title to their home in return for future care exposes the senior to early eviction if the owner has to sell the home because of financial reversals, marriage breakdown or some other cause. There is also the potential for the abuse of seniors — to drive them from the possession of their home, which they gave up in return for the care to be provided. On the other side of the coin, the caregiver who is to receive the benefit, such as the transfer of a home in return for care, will undoubtedly face criticism from other members of the family once the senior dies. They will question these arrangements and the generosity of them, especially where the only asset of the estate was the home where the senior resided.
As a matter of fact, there are several reported law cases involving these private care arrangements. In order for a case to be reported, it means there has to have been a trial. One can imagine the stresses and strains of putting a senior citizen through a courtroom scenario, against members of his or her own family, to assert a right that he or she may have given up as a matter of basic trust.
In one such reported case, a grandmother advanced money to a granddaughter and her husband to pay off their mortgage and to perform renovations to their house to create a granny suite. The grandmother was to have the right to reside in her new suite for the rest of her days and to be looked after by the younger couple. The money that the grandmother advanced was to be repaid if she did not continue to stay with the couple. As you might have expected, the couple’s marriage broke down and their house had to be sold to satisfy the division of marital assets. The grandmother was then faced with paying for her own accommodation at a nursing home.
Ultimately, after an exasperating and exhausting court battle, the grandmother prevailed and recovered from her granddaughter some of the money that she had advanced to her. Unfortunately, the grandmother did not keep very good records and she did not have proof of all of the amounts that had been advanced to the granddaughter, so she was not able to recover everything that she had loaned the couple.
The vulnerability of the older person, because of health or safety concerns, creates a situation of dependency, exposing the elderly person to unfair influences exercised in their relationships with family members. Similarly, the younger family member would see this as an opportunity to someday have a place of his or her own and the elder person is seen as the route to achieve this future benefit. This situation can lead to exploitation. Legal advice in these situations can be helpful in establishing what the senior citizen should be transferring in return for their care and the degree or duration of the care to be provided. If there is to be an early termination of this relationship, then the consequences of that termination have to be defined
It is especially important to know what will happen on the death of the senior or, as in the case mentioned earlier, when the sale of the home is required.
When an elderly person transfers a significant property — such as a house — before care services are rendered, all of the bargaining power of the elder person has already been given up. Obviously, it would have been preferable for the senior to maintain ownership of the property until the services were delivered. To protect the caregiver in this situation, the elder person must undertake some estate planning to ensure that the title to the house will only pass to the caregiver after the senior passes away. This will protect the senior if the caregiver were unable to provide the services as contemplated. Where no transfer of property is contemplated, the payment by the elderly person for his or her ongoing care and the type of services to be provided in return have to be defined to protect both parties.
There are no effective statutory provisions to govern these arrangements so a written agreement becomes all-important. A court can interpret the provisions of such an agreement. The court can also review it for unconscionability, adequate consideration and specific performance to relieve against provisions that are grossly unfair or one-sided or where the agreement has been obtained by undue influence. If we use the illustration of the case cited above, the grandmother in that situation might have recovered all of her money from the younger couple if the amount of her advances had been written into an agreement. Given the overriding financial risk to the life savings of senior citizens and to their physical well-being in the event of default, it would seem a very prudent step to define the interests of both sides in writing.
In part two of this article, we will review the statutory protections and benefits that are available to older adults in long-term care facilities and supportive housing.
John Johnson is a partner with the law firm of Nelligan O’Brien Payne LLP (www.nelligan.ca), with offices in Ottawa, Kingston,Vankleek Hill and Alexandria.
NOTE TO READERS:THIS MATERIAL IS PROVIDED FOR GENERAL INFORMATION AND IS SUBJECT TO CHANGE WITHOUT NOTICE. EVERY EFFORT HAS BEEN MADE TO COMPILE THIS MATERIAL FROM RELIABLE SOURCES, HOWEVER, NO WARRANTY CAN BE MADE AS TO ITS ACCURACY OR COMPLETENESS. BEFORE ACTING ON ANY OF THE ABOVE, PLEASE MAKE SURE TO SEEK INDIVIDUAL FINANCIAL ADVICE BASED ON YOUR PERSONAL CIRCUMSTANCES.
[This article was originally published in the March/April 2007 issue of Fifty-Five Plus Magazine.]