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Special Planning Considerations for Alzheimer’s and Dementia
If you receive an Alzheimer’s or dementia diagnosis, planning for the future must begin as soon as possible.
Preparing for incapacity must be done while you still have legal capacity: the ability to express your own wishes and understand the implications of documents that are created to enforce and protect them. Once you become incapacitated, you may not sign legal documents.
In the absence of proper incapacity legal planning in advance, a court process will then be required to appoint financial and health care decision-makers for you. This process can be lengthy and expensive. It also will expose your private personal, health, and financial circumstances to the public record.
What Documents are Needed for a Person with Dementia?
Through a general durable power of attorney (POA), you can appoint a trusted individual as the agent (also known as the attorney-in-fact) to manage your financial and legal matters. While a POA can give limited powers, in cases of Alzheimer’s or dementia, broader powers should be given to the agent. Why? Your appointed will most likely need such authority to conduct all and any financial and legal matters on your behalf. A complete list of all assets, including bank accounts, pension, retirement plans, investment accounts, real property, and digital assets, should be created and provided to the agent appointed under your POA.
If you have executed a last will and testament, it should be reviewed and probably updated without delay. Make sure that it still reflects your wishes, especially regarding the executor you have appointed and the distributions you want to be made to your beneficiaries. If you have any minor children, you should also make sure that the guardians you have nominated are still willing to serve.
When one spouse has a diagnosis of oncoming cognitive impairment, some difficult decisions should be considered with an estate planning lawyer, such as shifting some assets to a Medicaid Asset Protection Trust, or transferring assets to children or the healthy spouse, with some trusts created in the healthy spouse’s will to protect some asset if the caretaking spouse dies and the disabled spouse’s needs to be cared for in a nursing home. If more than five years at home is likely, some proactive planning can greatly increase the options available for caring with greater flexibility. If a crisis is at hand, more drastic planning can preserve some assets for care once the state takes over payments.
This is now an instance where a trust created in a will can have significant advantages over the assets being held in a revocable trust, even if probate is required. Which planning options make sense depends greatly on how much time is anticipated before nursing care is required.
What Healthcare-Focused Documents Should Be Prepared?
While executing your POA, remember to execute a healthcare power of attorney as the agent. This document is also known as an advanced directive or health care proxy in some states. The individual who you appoint as the agent will be authorized to make your fundamental health care decisions if you are incapacitated. The same individual is sometimes appointed to serve as an agent for financial and health care decisions. However, this is not always the case. Each situation is different. You know the pool of candidates’ strengths (and weaknesses) for these important roles.
A living will, also known as an advance health care directive, documents your wishes regarding end-of-life care. It must address some hard questions concerning medical treatment: do you want your life extended through artificial means? Would you want to donate your brain or other organs for scientific research?
You should execute a HIPAA release form, so doctors and attorneys may speak with your financial and health care agents, family members, and caregivers as issues arise. In addition, those you authorize will also be able to access your medical records. This access is essential and is very practical for uses ranging from obtaining second opinions to pursuing potential malpractice claims. The HIPPA release form is also needed to interface with the health insurance provider. The right to speak with medical providers based on being a spouse or descendant should not be assumed.
Trusts are Commonly Used to Manage Assets for Incapacity Planning
You can create a fully-funded revocable living trust to address the management of your assets while you are living and to distribute your assets postmortem according to your instructions. As long as you have the capacity, you are in charge as the original trust and beneficiary. You can even make any changes you desire. Upon your incapacity, the trust becomes irrevocable and continues to provide for you. Your trust becomes irrevocable upon death since it carries out your distribution instructions. The successor trustee you appoint can be the same person appointed as the agent under your POA, the executor under your last will, and even your health care agent.
Planning for Final Arrangements
It is wise to discuss whether you want to be buried or cremated. You should also provide guidance regarding what, if any, kind of funeral service you would like and any other related arrangements. The more decisions you can make now, the fewer your loved ones will need to decide later on when grieving your loss.
Incapacity Planning for Alzheimer’s or Dementia
Planning for incapacity can be part of coming to terms with an Alzheimer’s or dementia diagnosis for you and your loved ones. Memorializing your wishes helps keep you in control of the process since your wishes are expressed and documented. You and your loved ones will be empowered to move forward with a plan in place.
The sooner you seek professional help, the better the planning choices that you will have.
Upcoming Webinar September 27 at 6:00 PM
We have a basic estate planning webinar on September 27 at 6:00 pm. Please join us if you want a refresher on your own planning, and want to introduce your family to what you have done. Also, if you want to give a friend a chance to find out about their options for planning, please pass this newsletter on.
To register for the seminar, please click here.
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