Preparing an Estate Plan after a Dementia Diagnosis

Dementia and Legal Planning

Estate Planning withHave you or someone you love been diagnosed with Alzheimer’s dementia? Every 66 seconds someone in America develops Alzheimer’s, and today, there are 5.5 million Americans living with the disease. Such a diagnosis can take an emotional toll on any family, but with careful legal planning, you can make the uneasy journey ahead just a little more manageable.

When should I begin planning?

The longer you wait, the more difficult the process will be. As time passes, your ability to make informed decisions, and to fully express your wishes may be limited by dementia, which would be especially important when making documents related to medical and financial matters. Under federal law, you cannot create or sign legal documents unless you are of ‘sound mind.’ Because of this, you will not even be able to depend on your spouse or child to plan out these things for you, even if you do trust them to make the right decisions. Being of ‘sound mind,’ (also referred to as ‘legal capacity’) means you have the ability to understand the consequences of your choices and to make rational decisions of your own free will. For assistance, a doctor will be able to verify your mental capacity, and a lawyer will be able to determine what level of capacity is required for a person to make and sign a particular document.

*If you are the family member of someone diagnosed with dementia, who you believe has not carefully engaged in legal planning, and is beyond the point of legal capacity, please scroll down below to the final bold point*

There’s so much that needs to be taken care of, where do I even begin?

The task of beginning to plan for the future may seem daunting, but it is much more manageable than you may think. By following these steps, and with the help of an attorney, you will be on your way to a strong start.

Step 1 Take inventory of existing legal documents

Make sure that documents such as wills, trusts, beneficiary designations and powers of attorney are complete, signed and up to date. Make note of important issues which may not have not been discussed in these documents, such as long-term health care plans, and meet with an attorney.

Step 2 Focus on plans for finances and property

This first part of this step involves managing your finances to determine how much you can afford on health care. No one can predict the future. So of you already have a will, one written prior to the diagnosis, you probably created it without taking into account how much it would cost you to manage your health with a disease such as Alzheimer’s. But now, thinking about costs such as medical bills, insurance policies, and long-term care, and how much they will all cost you, is all the more important. Speaking with a financial advisor is highly recommended for finding assistance in this regard.

The second part of step two involves determining where/who you would like your assets to go to after you pass. This involves creating documents such as wills and estate plans to designate your intended beneficiaries, or amending such documents if they already exist. By failing to create such documents, your family will have to go through an expensive and rather lengthy legal process before they can touch any of your assets, and state laws may even end up determining who gets what, so these documents are especially important for keeping the peace in your family after you pass.

Step 3 Make plans for health care and long-term care

As time passes, you may lose the mental capacity to make medical decisions for yourself. Therefore, it extremely important to create a health care directive. Such a document’s purpose is to detail to your health care providers how you would like for your end-of-life care to proceed. You can also appoint a power of attorney for your health care, which would entail you choosing someone (such as a close family member) to make healthcare decisions on your behalf in the event that you are not able to do so yourself.

Important decisions regarding health care may include:

  • Who you would like your health care providers to be
  • Types of treatments you would prefer
  • Where you would like to live and receive treatment
  • Ensuring that you sign medical records release forms so your doctor will be allowed to share information regarding your health with family members or friends
  • Ensuring that you sign hospital visitation forms, so those who don’t meet hospital visitation laws will be allowed to visit
  • Making end-of-life care decisions, such as whether or not to use equipment such as ventilators and feeding tubes

Step 4 Name a power-of-attorney

When you are no longer capable, who do you trust to carry out your financial and medical decisions? This person will be maintaining your financial assets and paying for costs such as medical bills. You can grant permission for this person to either act immediately, or at some later date. In addition, it would be helpful to name a successor agent in case your original choice is unable to serve.

I have a family member who has not engaged in legal planning, and is now beyond the point of legal capacity. What happens now?

If a family member fails to assign a power-of-attorney, you will have to go to court and produce evidence that your loved one is no longer able to manage his or her own affairs. In turn, you will have to ask the court to grant you conservatorship or guardianship to handle these important tasks, such as making important healthcare decisions, managing retirement accounts and paying bills. Not even a spouse or child will have the legal authority to do so otherwise. And finally, in regards to inheritance issues, obviously, not even someone with a power-of-attorney can create this. State laws will decide where their assets will go. And if no one fits the criteria, the state itself will inherit these assets.