Hickory Dickory Debt: The Importance of Proper Estate Planning
August 17, 2017 By: Erin Lepine Read Time: 3 minutes
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Nelligan O’Brien Payne gratefully acknowledges the contribution of Matthew Drover, Student-at-Law in writing this blog post.

Retirement: the stage of life we all work towards, so we can fully embrace and enjoy the fruits of our labour. It is naturally borne in mind that life after work is a rather pleasant and enviable position. However, it is also a time when you should reassess your Estate Plan.

Wooden chairs at sunset

Whether you intend on spending every last penny of your hard-earned cash, or prefer to leave behind a legacy for your loved ones, your existing assets and debts can impact what your estate planning needs may be.

What do the stats say?

Recent statistics appear to suggest that individuals aged 55 and higher are experiencing increasing financial difficulties in comparison to prior generations.

The average 50-year-old Canadian lugs around an unsecured debt of over $68,000, and those over 55 years of age carry an additional average mortgage of $176,000. Statistics Canada reports that in 2012, 42.5 per cent of people aged 65 and over still had debt. This is a 55 per cent increase since 1999. Further statistics show that seniors are the fastest-growing risk group for bankruptcy.

Debt and the elderly

On Tuesday August 8, 2017, the School of Public Policy and Administration at Carleton University here in Ottawa held a symposium to discuss the issue of debt and the elderly. Speakers from all over North America, as well as some international guests, came to address the issues facing this generation’s elderly: debt and health, insolvency, and international perspectives, among other topics.

Notably, also on the list of discussion was dementia, which is on the rise in comparison to prior generations. According to Ottawa Citizen journalist Joanne Laucius, a predicted 1.4 million Canadians will suffer from cognitive impairments by 2031. Some studies even suggest that dementia and a person’s financial health are closely related. Though we may never know whether it is financial hardship that causes health problems or vice versa, what we do know is that the end result remains the same: the financial stability of the impacted individual becomes vulnerable as they struggle to determine if it is the right time to let someone else make their personal financial decisions for them.

What can you do about your debt?


Many people assume that because they are in debt they do not need to have a Will in place, as they believe they will not have much to give away to their beneficiaries. This could not be further from the truth. Whether or not you are carrying debt, having a proper Estate Plan in place is crucial to protecting your investments and managing debt effectively. Putting that plan into place before health issues – such as dementia – get in the way, is key.

Naming a trustworthy person to act as your Attorney for Property in the event that you are unable to manage your own finances will provide peace of mind and enable you to plan further into the future. After your death, it will also be invaluable to your estate trustee(s) to have clear instructions from an air-tight Will, to guide them in resolving the debts and distributing any leftover assets to your loved ones.

For more information about bankruptcy and attorneys for property, contact our Wills and Estates Group.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2019 Nelligan O’Brien Payne LLP.