Clients who are HIV-positive present many financial planning challenges. HIV can influence decisions concerning employment, insurance, estate planning, retirement planning and spousal benefits. But most challenging, perhaps, is when HIV-positive clients who were diagnosed before the current crop of anti-retroviral drugs became available didn’t believe they had a future — and didn’t plan ahead.

“Some of my HIV-positive clients have gone through what they put aside for retirement,” says Ariel Magil, an advisor with TD Waterhouse Private Investment Advice in Toronto. “They’re coming in to see me and saying: ‘I need to make this money last’.”

Now, HIV is manageable and people are surviving 25 years after testing positive. That means financial plans should remain long-term, the same as anyone else’s, Magil says. And for some, that has happened. “Most of my HIV-positive clients are still working, contributing to their RRSPs.” he says. “One just bought a new home.”

The stigma attached to the virus, which can develop into AIDS, can also mean many clients don’t disclose their HIV-positive status to advisors — even though the potentially deadly virus can have dire implications for their financial health. Magil, who has clients in the “gay village” of Toronto, estimates he has about 10 HIV-positive clients. Only five are open about it, even though Magil is openly gay.

“Some people aren’t comfortable talking about it,” he says. “There’s still a lot of stigma, even in the gay community.”

Brian, 45, is a case in point. The Toronto resident first tested positive in 1991. His partner at the time died within a year of diagnosis, but more than 15 years later, Brian — thanks to an effective cocktail of medications — is still alive and is now faced with the surprising prospect of planning for his golden years.

“Back in the early 1990s, AIDS was a death sentence. The only drug they had was AZT,” recalls Brian, who asked that his last name not be published. “As far as planning for the future? No, I didn’t. I just let it go.”

Now Brian is facing a future for which he didn’t plan. Several years ago, Brian had to stop working as a manager in the service industry when tests showed his immune system was dangerously weak. He went on long-term disability, but now his group insurer is prodding him to return to work. His annual income, once about $53,000, has dropped by $15,000, although his common-law partner, who is HIV-negative, works full-time.

Fortunately for Brian, his partner’s drug plan covers 100% of Brian’s $2,500 monthly bill. (Brian’s plan covers only 80%.)

The two own a home but have no savings. Brian is still trying to eliminate his credit card debt of $8,000, which makes retirement planning pretty hard.

Brian is no better off legally. He does not have a will or a power of attorney for his health care or finances, which, says Doug Elliott, a lawyer with Roy Elliott Kim O’Connor LLP of Toronto, is very risky.

“Temporary incapacity is almost to be expected,” says Elliott, who tells the story of a man living with AIDS whose mail piled up while he was in the hospital. When he got home, he discovered he had missed a payment on his life insurance policy and it had lapsed. The insurance company wouldn’t restore it unless he could prove he was insurable. “It was a disaster for him,” he says.

Elliott worked on the legal battle for same-sex marriage in Canada and has been advocating for people with HIV and AIDS since the early 1980s. “It was often a race to the hospital to get the will signed before the person expired,” he recalls.

Being HIV-positive severely limits insurability. Brian cannot get whole life insurance now but he may still be covered through his partner’s group life insurance if it doesn’t require individual underwriting, says Elliot. He warns HIV-negative partners to buy insurance as soon as possible, because they could be declined if a company discovers they are in a relationship with someone who is HIV-positive.

For clients who already have group coverage at work, Elliott advises staying in that plan. Some group insurers now have urine tests, which can detect HIV.

Other considerations, says Elliott, include:

> Banking And Credit Cards. Advise clients in relationships to have joint accounts and cards to track a partner’s movements in the event AIDS-related dementia develops. Elliott relates the story of a high-powered accountant who disappeared and was later discovered at a roadside stop in the U.S., with no clue as to how he got there.

@page_break@> Drug Coverage. Small employers can have their premiums hiked if they employ a “heavy user” of a drug plan. An employee with HIV may be pressured to leave, or the employer may switch to an insurer that requires proof of insurability from every employee.

> Disability Claims. Some policies provide coverage until employees are able to return to the job they held before they went on leave. Others will provide coverage only until the employee is able to return to any type of job.

Most policies define people as either “fully disabled” or “able to work,” says Eileen McKee, project manager of episodic disabilities initiatives for the Ottawa-based Canadian Working Group on HIV and Rehabilitation. So, if someone returns to work part-time during a time of good health, they lose all their disability income support, including payments from the federally funded Canadian Pension Plan disability program. These issues are similar for patients with cancer, multiple sclerosis, arthritis, diabetes and colitis.

Another problem can arise if people continue to work even though they should be on disability. They can put themselves at risk of non-performance, Elliott says.

> Investments. Make sure your client’s partner is listed as the beneficiary of your client’s RRSP to avoid it passing through the estate, especially if the couple is not legally married.

John Bostjancic, an advisor with Edward Jones in Mississauga, Ont., recommends an annuity, or even an accelerated annuity, for those at an advanced stage of HIV. “They might qualify for a higher income stream because they have a shorter life expectancy,” he says. “If you survive longer than you expect, you’re not going to run out of income.”

Bostjancic might also recommend segregated funds, for estate planning purposes.

> Estate Planning. “It can raise some delicate issues,” Elliott says. Estate conflicts can arise if, for example, a man was married to a woman, but is cohabiting with another man. For these reasons, advisors should interview clients alone, to allow them to disclose personal matters that could have an effect on their estates.

> Tax Planning. A person living with HIV or AIDS may be eligible for the disability tax credit and other claims, says Eileen Reppenhaggen, a certified general accountant from Tsawwassen, B.C., and a member of the Canada Revenue Agency’s disability advisory committee.

There are 123 medical expenses listed in RC4064 (the CRA’s medical- and disability-related information form) and only four require eligibility for the disability tax credit.

Caregivers may be able to claim other credits, such as the caregiver credit, “infirm over 18” credit or other dependent credits, she says.

The disability tax credit also allows for the Registered Disability Savings Plan’s matching federal grants of $3,500 and $1,000 bonds in 2008 for low-income people.

Elliott’s message to advisors dealing with HIV-positive clients: stick to business and focus on the client’s needs. “You’re not there to sit in judgment.” IE