When a loved one is diagnosed with dementia or Alzheimer’s, there are several important legal steps that should be taken to ensure their well-being and protect their assets. Here are some of the most important considerations:
- Power of Attorney: This is a legal document that gives someone else the authority to make financial and healthcare decisions on behalf of the person with dementia or Alzheimer’s. It is important to appoint someone trustworthy and responsible to act as the power of attorney.
- Advanced Directive: Also known as a living will, this is a document that outlines the person’s wishes for medical treatment in the event that they become unable to make decisions for themselves. This can include things like whether they want to be kept on life support, and what types of medical treatment they are willing to receive.
- Will: A will is a legal document that outlines how a person’s assets should be distributed after they pass away. It is important for people with dementia or Alzheimer’s to update their will to ensure that their wishes are properly reflected.
- Trust: A trust is a legal arrangement in which a trustee holds and manages assets for the benefit of another person. Trusts can be a useful tool for managing the finances of someone with dementia or Alzheimer’s, as they can be structured to provide for their ongoing care and well-being.
- Medicaid Planning: Medicaid is a government-funded healthcare program for people with limited financial resources. If your loved one with dementia or Alzheimer’s requires long-term care, it may be necessary to plan for Medicaid eligibility. This can involve transferring assets or making gifts to family members to ensure that they meet the financial requirements for Medicaid.
- Guardianship: In some cases, it may be necessary to appoint a legal guardian to make decisions on behalf of the person with dementia or Alzheimer’s. This can be done through a court process, and is typically only necessary when the person is unable to make decisions for themselves and there is no power of attorney in place.
Estate Planning for Dementia and Alzheimer’s
Estate planning is also an important consideration for individuals with dementia or Alzheimer’s. Here are some key steps to take in terms of estate planning:
- Update Estate Planning Documents: Make sure that all estate planning documents, such as a will or trust, are up to date and reflect the person’s current wishes. This is especially important as the individual’s condition progresses and their ability to make decisions changes.
- Consider Long-Term Care: Dementia and Alzheimer’s can be expensive diseases, and it is important to plan for the possibility of long-term care. This may involve purchasing long-term care insurance or considering other financial options, such as a reverse mortgage, to help pay for care.
- Protect Assets: Individuals with dementia or Alzheimer’s may be vulnerable to financial exploitation. To protect their assets, consider putting them into a trust or working with a financial advisor to implement safeguards and monitor their accounts.
- Minimize Estate Taxes: Estate taxes can be a significant burden on an estate, so it is important to consider strategies to minimize their impact. This may involve making gifts to family members, creating trusts, or taking advantage of other tax-saving strategies.
- Plan for Incapacity: Incapacity is a common concern for individuals with dementia or Alzheimer’s. To prepare for the possibility of incapacity, consider creating a power of attorney or living will to ensure that someone you trust can make decisions on your behalf.
Of course, you should consult with an attorney who specializes in elder law, and estate planning, to ensure that all necessary legal steps are taken to protect the well-being and assets of your loved one with dementia or Alzheimer’s. This can help to ensure that their wishes are respected and their needs are properly met, even as their condition progresses.