In this article, 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
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. Thoughtful estate planning can ensure your loved one is cared for by the people they know and trust if they can no longer care for themselves, and even if your loved one has already been diagnosed with dementia, it’s 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
A person doesn’t 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 (or review and update) 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 financial power of attorney while they’re 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.
Creating a trust document alone isn’t sufficient. Assets must be retitled, and beneficiary designations updated to ensure all assets are covered by the trust, and that the named successor trustee can step in with ease when necessary.
As part of creating a trust, your loved one will name the person they want to manage their assets when they’re no longer able to do so. This person is called the trustee or successor trustee. The trustee and power of attorney are often the same person, but not always.
Determination of who should serve in what role, and at what point your loved one should give up control over their financial assets, is part of what we counsel our clients to decide. If you have any uncertainty whatsoever, please call us to discuss. It’s far better to get the right tools in place, and the right people named, early than it is to wait until it’s too late. Once it’s too late, it’s really too late, and your family could be stuck with a court process as the only path.
By having these two estate planning tools in place and the support of our proactive guidance, you can rest assured 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’re 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
By addressing legal matters early, you can ensure your loved one’s wishes are respected and their affairs are managed in the way they intended, by the people they trust, without the need for court involvement. To learn more, schedule a complimentary 15-minute call with our office.
AB Law, PLLC is a full-service business law and estate planning firm that serves clients throughout Texas. All consultations are free and no question is too silly, ridiculous, or complex. https://calendly.com/ablawpllc www.ab-firm.com