What should I know about dementia and estate planning?

Legal and financial tools can help families plan for Alzheimer’s, dementia, and the need for long-term care.

Alzheimer’s and dementia are terrifying diseases. Upon diagnosis, numerous fears present themselves, among them issues of estate planning. People diagnosed with Alzheimer’s disease and dementia fear that they will become a burden on loved ones, not be able to make medical decisions on their own behalf, and that they may become susceptible to financial fraud.

Estate planning after a diagnosis is not impossible, but there are issues to consider when entering into this process to ensure that your wishes are respected.

Creating an estate plan while having capacity

During probate, the court determines if your will is properly executed. Among its considerations, the court will determine if you were mentally fit to do so. Anyone whose claim to property in the will would be hurt if the will were valid may contest the will and attempt to convince the court that the will should not be given force.

Importantly, the courts have ruled that just showing you suffer from dementia or Alzheimer’s is not enough by itself to make a will invalid. You can create evidence through video, expert testimony, and other means to show that you still have capacity to execute a valid will.

Powers of Attorney

A comprehensive estate plan made while having the mental capacity to do so can account for future medical decisions. A power of attorney for health care can name an agent to act on your behalf with medical providers and also give instructions for your future treatment and medical care. This can greatly ease the burden on loved ones by clearly stating preferences for medical care and leave decisions in the hands of someone who is capable and trustworthy of doing so. A financial power of attorney allows the same regarding financial decisions, which can avoid conflict between family members.

Financial and long-term care planning

People diagnosed with Alzheimer’s may wish to begin reducing their estate without incurring penalties for Medicaid eligibility. Because Alzheimer’s usually requires treatment in a long-term care facility, it is important to begin creating a financial plan immediately upon diagnosis, if there is not one in place already. Because Medicaid has a “look back” period, gifts made prior to entering a long-term care facility may affect when Medicaid benefits kick in. Still, there are ways to legally reduce your estate without incurring Medicaid penalties, but this must be done carefully in order to allow your heirs and beneficiaries to inherit any of your assets.

The earlier the better

Ideally, a person should have an estate plan in place before becoming diagnosed with Alzheimer’s or dementia. According to the U.S. Department of health and Human Services, 70 percent of people age 65 and older will need long-term care at some point in their lives. That means even healthy people should have an estate plan in place.

No matter where you are in your health and wealth, there are legal and financial tools in place to help you on your journey.

At Jill M. Metz & Associates, our attorneys understand the importance you place on leaving your loved ones with as little burden as possible while wanting helping them by leaving the assets you’ve accumulated over a lifetime of hard work. Contact our offices to discuss your current situation and to tailor an estate plan to meet your needs.

Keywords: Estate planning, Alzheimer’s disease, dementia, long-term care planning, Medicaid, power of attorney for health care, financial power of attorney.