Seniors Remain Optimistic About Golden Years
The average Canadian will struggle to fund retirement. However, despite increasing longevity, resulting in greater costs associated with personal care later in life, a recent study suggests that a significant majority of the aging population is optimistic that they will continue to benefit from a high quality of life in old age. Survey results indicate that 84% of younger adults and 89% of middle-aged or older adults believe that their quality of life will not diminish as they age.
However, approximately one half of the participants in the study, conducted by a team of organizations including the U.S. Council on Aging and Boston University, are still concerned that their post-retirement savings will be insufficient to fund personal care. The number one factor fueling the optimism, despite concerns with respect to the adequacy of retirement savings, appears to be the support of family and friends. In some situations, reliance on family and friends may be an appropriate way to obtain personal care that may otherwise be inaccessible for financial reasons.
A private care agreement normally involves an older person arranging to transfer a certain asset, either when entering into the agreement or as a bequest within his or her will, to a family member or friend, who, in turn, will agree to provide care as the person ages. 77% of survey respondents wish to remain at their current home instead of relocating to a retirement home or other long term care facility. For that reason, a senior may, for example wish to gift real property to a family member, in exchange for the promise of support into senior years, preserving the property within the family and allowing the older person to continue living at home rather than selling the property to fund caregiving through another source.
However, absent adequate safeguards, arrangements with family members or friends to provide care to seniors can be risky. Early, unexpected termination of the arrangement should be considered so that the senior is not deprived of both the personal care itself and the assets intended to be transferred in order to secure it.
It is important that private care agreements are formalized in writing and that both parties to a contract for private care obtain independent legal advice to ensure that the interests of the senior and the caregiver are protected.
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