What Caregivers Need to Know About Estate Planning for a Loved One with Dementia
Entrusted Legacy Law
For more information about the author, click to view their website: Entrusted Legacy Law
Jan 11, 2024
Pennsylvania - Greater Pittsburgh Area
Caring for a loved one with dementia is a challenge that millions of families undertake each year. As a caregiver, understanding how a dementia diagnosis affects your loved one’s legal decision-making is crucial to ensuring their wishes are honored and that you are providing them with the best possible care.
In this blog, we'll explore the importance of estate planning, even after a dementia diagnosis, as the best method to ensure the wishes and rights of your loved one are protected.
Understanding Incapacity
Dementia is a progressive condition that affects memory, cognition, and daily functioning. As dementia causes your loved one's cognitive abilities to decline, there may come a time when they are no longer able to make sound decisions about their finances, healthcare, and overall well-being.
When the effects of dementia make it difficult for a person to understand information and make sound decisions, that person is considered to be incapacitated, which means they can no longer legally make healthcare or financial decisions for themselves. This change in their memory and cognition can be emotionally overwhelming for both your loved one and your whole family, and without proper planning, can require court involvement.
But, there’s still some good news. Thoughtful estate planning can ensure that your loved one is cared for by the people they know and trust if they can no longer care for themselves, and even if you’re loved one has already been diagnosed with dementia, it is still possible for them to create a legally-binding estate plan during the early stages of the disease.
Estate Planning In The Early Stages of Dementia
Every adult should create certain legal documents to protect their rights and wishes, and this is no different for a loved one with a dementia diagnosis. What is important to remember is that in order to create a legal document, you need to have mental capacity – meaning you need to be fully aware of what you are doing and what the consequences of your choices will be.
Thankfully, a person does not need to constantly be in a state of capacity to create an estate plan. As long as your loved one has the mental capacity at the moment they sign their estate plan documents, the documents will be valid, even if they regress into a state of incapacity afterward.
In the early stages of dementia, and ideally long before any health problems surface, your loved one should create the following estate planning documents:
General Durable Power of Attorney
A General Durable Power of Attorney (POA) is a legal tool that allows your loved one to appoint someone to make financial and legal decisions on their behalf. Their POA can write checks, pay bills, maintain their home, and manage their financial assets.
This document becomes especially significant as dementia progresses. Encourage your loved one to designate a trusted individual as their Power of Attorney while they are still able to make such decisions.
A Revocable Living Trust
A General Durable Power of Attorney is an important tool, but many financial institutions place constraints on the use of a POA or don’t acknowledge their authority at all. To make sure your loved one has complete protection of their financial wishes, encourage them to establish a Revocable Living Trust and move their assets into the name of the Trust.
As part of creating a Trust, your loved one will name the person they want to manage their assets, called the Trustee. The Trustee and Power of Attorney are usually the same person, but not always. By having these two estate planning tools in place, you can rest assured that the people your loved one knows and loves will be able to manage their assets for them as their dementia progresses.
Power of Attorney for Healthcare
Similar to a General Durable POA, a Power of Attorney for Healthcare (HPOA) appoints someone to make medical decisions on behalf of your loved one when they are unable to do so for themselves. Discussing and establishing a Healthcare Power of Attorney early on allows your loved one to express their medical preferences and ensures their wishes are honored.
Their Power of Attorney for Healthcare should also include a Declaration to Physicians, also called a Living Will, that outlines their desires regarding medical treatment, life support, and end-of-life care. Creating a Declaration to Physicians and discussing their wishes with you ensures that their preferences regarding life-sustaining treatment, resuscitation, and other medical interventions are documented and respected.
Plan As Early As Possible
One of the most crucial steps in preparing for the challenges of dementia is to help your loved one complete their estate planning while they still have the capacity to do so. Waiting until the later stages of the disease can limit their options and increase stress for everyone involved.
By addressing legal matters early on, you can ensure that your loved one's wishes are respected, and their affairs are managed.
As dementia progresses, estate planning must become more proactive and strategic than ever to avoid court and conflict over your loved one’s wishes in the future. If dementia becomes too advanced before planning is complete, the question of who will manage your loved one’s assets and care will be left to a judge who doesn’t know your loved one or their wishes. Keep reading to learn what steps need to be considered when estate planning for someone with more advanced dementia.
Seek a Cognitive Evaluation
If your loved one’s cognitive capacity is in question, seeking a professional evaluation is a prudent and proactive step in the estate planning process. Schedule an appointment with your loved one's primary care physician or a specialist in dementia care to assess their mental state and make a recommendation on your loved one’s ability to make estate planning decisions.
During this evaluation, the medical professional will talk to your loved one and ask them questions about their everyday life, how aware they are of their circumstances, and what they would do in certain situations, such as if a stranger came to the door or if a pipe burst in their home.
Your loved one doesn’t need to remember every detail about their life for the evaluation to be beneficial. The professional will be most concerned with your loved one’s ability to analyze a scenario and make a thoughtful decision on how to respond. For example, your loved one may not remember what day of the week it is but may remember they shouldn’t open the door for a stranger.
Receiving a report from your loved one’s doctor stating they have the cognitive ability to make estate planning decisions (at least when they are in a lucid state) protects their ability to make decisions for their finances and healthcare, and dissuades any future debate from third parties as to whether your loved one had the ability to make a plan in the first place.
Encourage Private Meetings Between Your Loved One and Their Lawyer
It may be second nature to help your loved one with appointments, especially if hearing and memory troubles make it difficult for your loved one to follow along. But as much as possible, allow your loved one to meet with their lawyer independently. A private meeting between your loved one and their lawyer will provide them with the opportunity to express their wishes without external influence.
Even if you have your loved one’s best intentions at heart and they would prefer to have you present during the meetings, encouraging your loved one to have private conversations with their lawyer when possible helps avoid questions about whether or not you influenced their estate planning decisions.
If it isn’t feasible for your loved one to have an entire meeting with their lawyer alone, make sure they at least have opportunities to talk to their attorney in private by leaving the room while your attorney confirms their wishes.
Be sure to document every time your loved one meets alone with their lawyer and ask their lawyer to document it as well.
Make Sure Their Estate Plan Is Executed Carefully
Unfortunately, errors that occur at the time an estate plan is signed are common. Every state has different laws for how estate planning documents are executed, how they can be signed, and what witnesses or notaries are required to make the document binding.
If your loved one’s plan isn’t executed properly, it can result in your family needing to involve a judge to determine whether the estate plan is still valid. This also creates an opportunity for family members to question whether your loved one had the mental capacity to create the plan at all.
It’s also essential to document your loved one’s capacity at the time the estate plan documents are signed. Make sure that their lawyer reviews the documents carefully with your loved one before they sign them, that the documents reflect your loved one’s wishes, and that your loved one is creating the plan of their own free will.
If you have any concerns about other family members questioning your loved one’s estate planning decisions or mental state at the time, ask your loved one and their attorney if they could record the signing meeting to dispel any claims that your loved one was coerced into planning or didn’t know what they were signing.
Conclusion
If your loved one received a dementia diagnosis and hasn’t addressed their legal matters, don't despair - but act fast. Even in the advanced stages of dementia, individuals may have moments when they can participate in decision-making and estate planning. But, due to the progressive nature of dementia, time is of the essence for your loved one to create an estate plan, and the sooner they plan, the easier it will be for them to get the help they need as their condition progresses.
In cases where your loved one’s capacity is severely diminished and estate planning hasn’t been completed, your family will need to pursue a court guardianship. This legal arrangement involves a court appointing a legal guardian who assumes responsibility for making decisions on behalf of the person with dementia. This process can be stressful, and it’s possible the court will appoint someone your loved one never would have wanted to manage their assets or healthcare decisions.
Other Articles You May Like
Handling Digital Estate Planning | A Wills and Trusts Attorney in Tampa
Most people at some time give thought to estate planning for the future of their assets and loved ones. But in our modern times, your Digital Estate may not get the attention it deserves. Here, a Wills and Trusts Attorney in Tampa from Mortellaro Law discusses handling your Digital Estate Planning in Florida.What is a Digital Estate?We are surrounded by technology and so it is no surprise that most of our financial affairs are handled through digital mediums. All this electronic information stored on your computer, tablet, smartphone, smart watch, and in the cloud is considered a digital asset and as such, part of your digital estate. These assets may or may not have financial value, but they typically have some sort of value to you, and should be accounted for in your complete estate plan.Think of all the electronic assets you possess and use on a regular basis. Make a tally of them by category so it is easier to keep track of them. This is your Digital Estate.Personal Property | Discusses Handling Digital Estate PlanningList all your personal online accounts on social media, email accounts, personal shopping accounts, photo storage accounts, video sharing accounts, and other ways you interact online. Be sure to include all the usernames and passwords for each account.Property with Monetary ValueList here your accounts that actually hold money, like bank accounts, credit accounts, PayPal, Venmo, Wallet, Samsung Pass, Apple Pay, Google Pay, Cash App, loyalty rewards accounts, online betting accounts, and any other programs or apps that can hold or transfer money. This can also include any bitcoin or other cryptocurrency holdings and NFTs. Again, list the usernames and passwords for each account or app.Business-related PropertyDo you operate an online store like eBay, Etsy, Amazon, or others? These accounts are also part of your digital property. Many may hold real assets like intellectual property you have created (eBooks, drawings, photos, music, etc.) and to which you hold the rights. Include any website domains you hold, blog content with original writing, and online video channels where the content is monetized and produces a profit.It is estimated that the average consumer in the US has around 100 or more online accounts with usernames and passwords! And yet, we often underestimate the value of our digital estate.Managing My Digital Estate Planning with a WillA Will and Trusts Attorney in Tampa can explain how a legal will can help you manage your estate, including your digital estate. All your digital assets and the information required to access them should be recorded in your will. Be sure to include instructions for how you wish these assets to be handled, recorded, donated, liquidated, maintained, or otherwise distributed by your executor.Digital assets with monetary value will be of particular importance, as they will form part of your estate that will be subject to probate. If you hold significant digital assets and do not account for them in your estate planning, this can cause serious problems or setbacks during probate. They may cost your loved ones or other beneficiaries tax penalties and delays. They may also be subject to seizure or liquidation to satisfy debts.Managing My Digital Estate Planning with TrustsDigital assets that hold some monetary value may be better managed by placing them in a Florida trust. Different types of trusts exist to hold property and shield it from probate, excessive taxation, exploitation, and loss. By placing assets in a trust, you can direct how they are used and preserved, saving them for your loved ones and protecting them from risk of seizure by creditors or lawsuits.Asset protection trusts are designed to protect even digital assets from excess taxation, misuse, and more. For example, if you own an online store that contains intellectual property for sale (writing or music for download as an example), this can be an ongoing source of income. Placing this digital asset in a trust allows your beneficiary to continue enjoying the profits of this property indefinitely, or however you leave instruction within the trust documentation.Digital assets in trust can also be left to specific beneficiaries who may better appreciate the assets and enjoy benefitting from them, preserving them for the future, and more.Get Help from a Wills and Trusts Attorney in TampaIf this is the first time you have ever considered your digital estate assets, now is the time to review them and compile a comprehensive record for your estate plan. Help from a Wills and Trusts Attorney in Tampa from Mortellaro Law can be invaluable as you seek to protect your digital assets and preserve them for future generations. Contact Mortellaro Law today to schedule an estate planning consultation and review your digital assets.
Stretching and Protecting Your Wealth with a Domestic Asset Protection Attorney
Domestic Asset Protection Attorneys from Mortellaro Law routinely design custom strategies to help clients stretch and protect their hard-earned wealth. Stretching helps wealth grow and minimizes liabilities while protecting reduces threats that could take wealth away. Wise estate planning and asset protection plans include both. Amassing wealth is a worthy goal that requires hard work, dedication, careful planning, and strategic decision-making. Mortellaro Laws Florida Domestic Asset Protection Attorneys help you protect your assets from creditors and predators while maximizing their growth. This is the essential function of asset protection. What is Asset Protection?Asset protection involves taking measures to safeguard your assets from lawsuits, creditor claims, and other threats. This includes protecting your personal assets, such as your home and personal property, and your business assets, such as your companys intellectual property, real estate, and other investments. Asset protection planning is essential for anyone who wants to protect their hard-earned wealth from potential risks and liabilities.Stretching Your Wealth | Domestic Asset Protection AttorneyMaximizing income tax deferral and wealth accumulation while minimizing tax liability is key to stretching your wealth. Our Florida Domestic Asset Protection Attorneys can help you achieve this goal in several ways. For example, they can help you structure your investments tax-efficiently, such as using trusts, limited liability companies, and other legal entities. They can also evaluate all options for minimizing tax liability and the erosion of savings that results from paying too much in taxes.Another important tool for stretching your wealth is retirement planning. Mortellaro Law can help you develop a comprehensive retirement plan that takes into account your specific financial situation and goals. This can include a range of strategies for reducing taxes in your golden years, including taxes on Social Security benefits, and may even be able to show you how to enjoy a tax-free retirement.Protecting Your WealthProtecting your wealth from creditors and predators is another important goal of asset protection planning. A Florida Domestic Asset Protection Attorney can help you develop a comprehensive asset protection plan that takes into account your specific risks and liabilities. This can include strategies for protecting your personal assets, such as your home and personal property, as well as your business assets, such as your companys intellectual property, real estate, and other investments.One key tool for protecting your wealth is insurance. Our domestic asset protection attorneys can help you evaluate your insurance needs and find the right policies to protect your assets and mitigate your risks. This can include liability insurance, property insurance, and other types of coverage that can help protect your assets in case of a lawsuit or other type of claim.A Word About Domestic Asset Protection Trusts A Domestic Asset Protection Trust (DAPT) protects assets from creditors and civil judgments. It is similar to any other trust, where a grantor establishes and funds the trust with assets for specific beneficiaries and appoints a trustee to manage the trust assets. The trustee must comply with the guidelines of the trust.However, in Florida, a grantors assets are not protected from seizure if he or she is also named as a beneficiary in the trust. Florida law and several court challenges have established that creditors and those seeking judgments against a grantor have full access to the beneficial interest in the income or principal from a DAPT self-settled trust where the grantor is also named as a beneficiary.However, if a Florida resident establishes a DAPT in a DAPT-friendly state, and more of the trusts assets, beneficiaries, and trustees are situated in that state, the higher the likelihood that DAPT-friendly states laws will apply to the trust. In other words, the Florida resident who established the trust as a grantor may enjoy that states protections from creditors and others.Domestic Asset Protection Attorney Michelangelo Mortellaro can provide more information and legal counsel in a private consultation at his Tampa office.Get Help from a FL Domestic Asset Protection Attorney in TampaStretching and protecting your wealth is a complex process that requires careful planning and strategic decision-making. Mortellaro Law has Tampa Domestic Asset Protection Attorneys who can help you achieve these goals by developing a comprehensive asset protection plan that takes into account your specific risks and liabilities. With the right strategies and tools in place, you can enjoy the peace of mind that comes with knowing that your hard-earned wealth is protected and secure. Contact Mortellaro Law today to learn more.
Did You Encounter These 7 Life Changes in 2023? Its Time to see an Estate Planning Attorney
Life is quite a journey, and it is filled with surprises and changes. Joys, ups, and downs in different phases are all aspects of life. Many major events can require modifications to your Florida estate plan. Make time to see an Estate Planning Attorney in Tampa from Mortellaro Law if you encountered these seven life changes in 2023. Marriage | Estate Planning AttorneyThis joyous union often includes more than you and your spouse. You can also combine assets, insurance policies, retirement assets, property ownership, and more. Conversely, you may want to keep these things separate, especially if this is a second marriage. Different families and prior obligations may require adjustments to your beneficiaries, asset distributions, asset protection strategies, and more. Meet with a qualified Estate Planning Attorney in Tampa at Mortellaro Law to make the necessary changes immediately. DivorceDivorce may demand many similar adjustments as marriage. You and your former spouse must review property ownership issues, powers of attorney, beneficiaries, retirement accounts, insurance policies, and more to reflect new changes. Some financial ties may be severed while new ones are created. A newly modified estate plan should safeguard your assets and interests in light of the changes divorce brings. Contact Mortellaro Law today if you were divorced in 2023 and need to review your Florida estate plan. Birth or AdoptionWelcoming a new family member through birth or adoption is cause for great celebration, but it also necessitates a fresh look at your estate plan. Adding a new beneficiary to your will, trusts, and other inheritance strategies is vital. You should also look into appointing guardians, creating new trusts, enacting powers of attorney, and making other financial provisions for their future. Mortellaro Law Estate Planning Attorneys in Tampa can help you review the options and choose the best ones for your situation. Death | Estate Planning AttorneyGrieving the death of a family member is deeply emotional and troubling, but it can also impact your estate plan. Was the person a beneficiary or your wills personal representative? Do certain elements need to be changed to reflect the loss of your loved one? Probate matters can become quite complicated if voids are left in your estate plan at the time of your death. Contact Mortellaro Law to review your estate plan if you suffered a loss in 2023. Sudden Health Changes We never know when health changes can threaten our lives and future, but when they do, they should be reflected in your health plan. You want your medical and financial wishes to be respected and observed no matter what happens. It may be time to consider completing an advance directive and naming a health care surrogate and other powers of attorney. You may also need to create or modify Medicaid strategies to plan for possible long-term care. Mortellaro Law can work with you to create these critical protections when your health takes a sudden downturn. RelocatingMore and more people are relocating to the Sunshine State to take advantage of many benefits. State laws vary, including those governing your estate plan. Setting up your primary residence in Florida likely necessitates several changes to conform with state law and adequately protect your assets and future. An Estate Planning Attorney in Tampa can ensure your plan conforms with the latest laws and that you take advantage of all the protections to which you are entitled. Debt or Asset Changes | Estate Planning AttorneyMajor acquisitions or losses have a huge impact on your estate plan. Every significant change necessitates a review to see what modifications are necessary. Financial realities change over time. If you had any substantial losses or asset changes in 2023, Mortellaro Law can perform a comprehensive review of your estate plan and recommend changes to reflect new realities. Align Your Estate Plan Aligns with Lifes Changes Life is always changing and so, too, should your estate plan. Marriages, divorces, births, deaths, health challenges, debt, asset changes, and more all must be reflected in your estate plan to prevent future headaches for you and your loved ones. If it has been a year or more since you reviewed your Florida estate plan, now is the time to get up to date. Contact an Estate Planning Attorney in Tampa from Mortellaro Law to schedule an estate plan review and lets discuss how the events of 2023 demand changes for the future.
Local Services By This Author
Entrusted Legacy Law
Elder Law 100 Pinewood Lane Suite #303, Warrendale, Pennsylvania, 15086Our Firm Prepares You for Life What makes our firm different is that we were built with the needs of growing families in mind. We understand you are BUSY, you are growing, you are planning for a life of prosperity and you value ease, convenience and efficiency. You are raising children, and caring for elderly parents, while also working hard to build your own nest egg for a lifetime of support. You want to know youve made the best decisions for your family and that your plan will work when your loved ones need it most. You want to make sure your minor children would be raised by the people you choose, and never by anyone you wouldnt want, and that your teens and adult children are properly prepared to care for you and what you leave behind. You want to feel confident that youve made the right choices, and handled everything so that you arent leaving behind a mess, when something happens. That is our focus as well. Weve developed unique systems to give you the same access to a Personal Family Lawyer as was previously only available to the super-wealthy, so you can have the guidance you need to build and maintain a life of prosperity and wealth. And, to keep your family out of court and out of conflict, which is the greatest risk to the people you love and all you have created, even if youve already worked with a traditional lawyer or created documents online. Our Team Is Here for You We encourage communication with our clients. In fact, weve thrown out the time clocks so you never have to be afraid to call with a quick question. Everything we do is billed on a flat-fee basis, agreed to in advance, so there are never any surprises. We have a whole team to serve you. When you call our office to ask your quick question, you wont have to wait hours or days for a phone call back. Youll get your question answered, right away. And, if you need to schedule a more in-depth legal or strategic call with your Personal Family Lawyer, a call will be scheduled when you're both available and ready for the call so we can make the very best use of your time and not waste your time by leaving voicemail after voicemail back and forth. And, we ensure the most important details of your planning are followed through on and your plan continues to work throughout your lifetime. We have a funding coordinator to ensure your assets are owned the right way throughout your lifetime and none of your assets will end up going through a long, expensive court process or being lost to the state because they were missed after your death. Weve created unique membership programs to keep your plan up to date year in and year out as well as give you access to our Trusted Team of Legal Experts for guidance on ANY legal or financial matter. One day you will need a lawyer. I dont know why and I dont know when, but when you do, you will be grateful you can call on us and well be here to advise you or get you out of a jam. We Help You Transfer Your Life and Legacy Lastly, we believe your financial wealth is only a small part of your overall Life and Legacy Planning which is made up of your far more valuable and most often lost upon incapacity or death intellectual, spiritual and human assets. These assets are what make you who you are, and sum up whats most important to you. And, a survey of inheritors has revealed that what they care about even more than inheriting your money, is inheriting these intangible assets. Most estate plans only focus on the transfer of your financial wealth to the next generation. Most people have such great intentions of passing on the intangible, but very few ever get around to it. Its just not a priority, until its too late. How much do you know about your grandparents values? Their most prized personal possessions? How they felt about you? What they had learned during their lifetime? If you are like most people, you know very little. Thats why we build the capture and passage of these most valuable assets into every estate plan we create. Not only will we help you pass on your money, but also your values, your insights, your stories and your experience the truly valuable assets your loved ones care about the most. Weve developed a tool that allows us to capture and pass on your whole family wealth, including your Intellectual, Spiritual and Human assets. I cant go into all of the details here, but well definitely talk about it when you come in for your Life and Legacy Planning Session.