Canada faces a significant aging of its population in the coming decades that will have profound and wide-ranging impacts on our society. Statistics Canada forecasts that people 65 or older will make up 22.5% of Canada’s population by 2030. Alzheimer Society of Canada estimates that in 2024, 8.7% of people in Canada over age 65 had some form of dementia. By 2050, the percentage of people in Canada over age 65 living with dementia may go up to 13.2%.
In our aging society, understanding the intersection of cognitive impairment, testamentary capacity, and susceptibility to undue influence has become increasingly important for estate planners and medical professionals alike to effectively assist affected individuals and families. A basic understanding of these issues will allow practitioners to better protect vulnerable individuals in our offices and in the community at large.
For a more comprehensive overview of this topic, on Thursday, April 3, 2025, esteemed speakers Greg Blue, Dr. Peter Chan and Emily Clough are presenting to STEP Vancouver on specific practice elements of cognitive impairment, including how to draft estate planning documents, including trusts, powers of attorney, and representation agreements, and ancillary documents such as shareholders’ agreements, in contemplation of incapacitated and semi-incapacitated trustees and other decision-makers.
The Growing Challenge of Cognitive Impairment
According to recent Canadian data, dementia affects approximately 600,000 Canadians, with prevalence rates increasing dramatically with age:
- 2.37% among those aged 65-79
- 17.24% among those 80 and older
- 29.04% among those 90 and older
By 2030, it's anticipated that 1 million Canadians will be living with dementia. Additionally, Mild Cognitive Impairment (MCI) affects up to 22% of those aged 71 and older, with an average annual progression rate to dementia of 12% in the general population and up to 20% in higher-risk populations.
The Spectrum of Cognitive Function
Cognitive impairment exists on a spectrum that includes:
- Normal aging
- Age-consistent memory loss
- Subjective memory loss
- Mild Cognitive Impairment (MCI)
- Dementia (Major Neurocognitive Disorder)
Dr. Peter Chan, a Geriatric and Consultation-Liaison Psychiatrist at Vancouver General Hospital, emphasizes that cognitive decline can affect various domains, including:
- Memory (particularly short-term)
- Executive function (judgment, planning, organization)
- Language abilities
- Social cognition (understanding others' emotions and motivations)
- Reality testing
Testamentary Capacity: A Legal Standard
Testamentary capacity is a legal standard requiring that a person making a will must:
- Understand the nature of a will
- Know their assets in general terms
- Consider who would normally inherit
- Be free of delusions and undue influence that affect their decisions
- Have knowledge and approval of the will's contents
Importantly, testamentary capacity may exist despite some cognitive deterioration. A person may have sufficient mental capacity to make a will even when their ability to manage other aspects of their affairs is impaired. The test for testamentary capacity is not "overly onerous," but it does require careful assessment.
The Challenge of Undue Influence
Undue influence occurs when someone's free will is overcome by pressure, manipulation, or deception to induce them to perform a legally significant act according to the influencer's wishes. This represents more than mere persuasion - it's the imposition of the influencer's will over the victim.
There are two main types:
- Inter vivos undue influence - affects transactions during a person's lifetime (gifts, property transfers, powers of attorney)
- Testamentary undue influence - affects wills or dispositions taking effect after death
Red Flags for Potential Undue Influence
Estate planners should watch for:
- Relationships of dependence, trust, or confidence between the client and a beneficiary
- Physical or psychological characteristics that point to dependency or cognitive impairment
- Isolation (physical, social, linguistic) resulting in dependence on another person
- Unusual distributions or sudden changes to estate plans
- Overly helpful "supporters" who may be controlling information or access
- Client's reliance on notes prepared by someone else
Planning for Incapacity
Given these risks, proper incapacity planning is crucial and includes the following documents:
Powers of Attorney
An Enduring Power of Attorney remains valid throughout incapacity and should include:
- Clear scope of financial control
- Triggering events for authority
- Safeguards and oversight mechanisms
Representation Agreements
In British Columbia, these allow individuals to choose representatives for health and personal care decisions:
- Section 7 RA: For those with some diminished capacity
- Section 9 RA: Requires full capacity but grants broader decision-making authority
Advance Directives
These documents record instructions for accepting or refusing specific healthcare treatments but only relate to health care, not personal care or financial affairs.
Nominating a Committee
A committee is a court-appointed person or institution who makes personal, medical, legal, and/or financial decisions for an incapable adult.
Protecting Against Predatory Marriages
Predatory marriages, often between vulnerable wealthy elderly persons and younger opportunistic individuals, represent a growing concern. These situations typically follow a pattern where the predator:
- Befriends the victim and isolates them from their support network
- Takes increased control of the victim's finances
- Influences the victim to transfer property, grant powers of attorney, or execute wills in their favour
Legal protections might include caveats under the Marriage Act, and challenges based on resulting trust, undue influence, or lack of capacity.
The Role of Medical Assessment
When requesting medical assessment of susceptibility to undue influence, practitioners should:
- Explain the legal concept of undue influence to the medical assessor
- Ask if there are medical reasons why the client is more vulnerable to influence
- Frame questions in practical terms like: "Can this person say no to relatives despite their pressure?"
Conclusion
Recognizing the complexities of cognitive impairment and its relationship to testamentary capacity and undue influence is essential for protecting vulnerable individuals. By understanding the red flags, implementing proper planning tools, and utilizing appropriate assessment approaches, legal and medical professionals can work together to ensure that estate plans truly reflect individuals' autonomous wishes rather than the undue influence of others.
For more detailed information, readers may wish to consult "Undue Influence Recognition and Prevention: A Guide for Legal Practitioners" from the BC Law Institute (2022).
Recognized by Best Lawyers in Canada for trusts and estates and family law, she previously chaired the Canadian Bar Association Wills and Trusts Subsection (Vancouver).
Contact Nicole by email or phone at (778) 742-5005
Heritage Trust is a leading non-deposit taking financial institution, regulated by the BC Financial Services Authority (BCFSA), a government agency of the Province of British Columbia. Heritage Trust offers caring and professional executor, trustee, power of attorney, committee, escrow and family office services to BC resident clients.
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