Don't Wait Until It's Too Late
Individuals diagnosed with dementia need a trusted family member or friend to make a commitment to help them make important financial and medical decisions when they no longer can do these tasks. According to an article in Money, "5 Essential Documents for Protecting a Loved One with Dementia," the time to complete this task is when the person is still mentally competent and has the legal capacity to make sound decisions.
If you delay with the paperwork, your family member's dementia may progress to the point where he or she cannot legally turn over power. At that point, your only option is to petition for guardianship and ask a judge to declare the person incapacitated. That can take a long time and is often expensive. It can get even worse if your loved one—or another family member—contests the application.
Laws vary by state, and mistakes can be costly. You should talk to your estate planning attorney about incorporating planning for incapacity into your estate plan. Here are the key documents that are recommended:
Durable Power of Attorney. This gives you the authority to make financial decisions for your loved one, like writing checks to pay his or her bills, handling tax returns, and selling a home. A "durable" power remains in place if the person for whom you are making decisions becomes incapacitated and can't make decisions for himself or herself, as opposed to a regular power of attorney, which terminates if the person who issued it becomes incapacitated. Avoid some headaches and visit the institution with the family member granting you power of attorney to complete any proprietary forms in advance. If your loved one spends a significant amount of time in another state, you should also have a power of attorney drafted according to that state's laws. Coordinating with financial institutions to ensure these powers of attorney are accepted is crucial and at Heritage Law Group, PLLC, we incorporate this into our process of aligning, verifying and tracking assets.
Health Care Proxy. This is really a power of attorney for medical decisions, allowing your loved one to select an agent or proxy to make choices about treatments, doctors, and other health-related matters if they are not able to do themselves.
Living Will. This is also called an advance directive for health care. It lets your loved one specify the medical treatment that he or she wants—or doesn't want—near the end of life. In some states, including Massachusetts, a Living Will is not officially recognized, but this document may provide helpful guidance to a health care agent about your loved one’s wishes.
Updated Will. A will gives instructions as to what happens to any of your loved one’s assets after they pass away. Your loved one’s will needs to be reviewed periodically to reflect changes in their life. However, having only a will guarantees going through the probate process, which could be long, costly and very public for your loved ones.
Living Trust. A living trust may be a good solution if the person with dementia has significant non-retirement assets, i.e., real estate and investments. The benefit of the living trust is that it may allow the estate to avoid probate when the person dies and assets are to be distributed. It can also make it easier for the trustee to manage the person's assets. However, this is not a do-it-yourself project. Meet with an experienced estate planning attorney to find out if this kind of trust is appropriate for your situation.
About the Company:
Heritage Law Group, PLLC is a boutique Estate Planning and Elder Law firm assisting residents in Tennessee and Kentucky. We are dedicated to providing client-centered, professional legal services that are individualized through one-on-one consultations. We delight in empowering our clients and community through education and providing specialized resources. Our integrity-driven team will help you protect your legacy while delivering outstanding quality at a reasonable cost.
Owner, Jake Mason, J.D., LL.M. (Elder Law & Estate Planning), EPLS, is board-certified in Estate Planning and Probate, accredited by the United States Department of Veterans Affairs, and licensed in Kentucky and Tennessee. Contact us to schedule a consultation at (615) 989-7054 or email@example.com.
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Reference: Money (December 11, 2015) "5 Essential Documents for Protecting a Loved One with Dementia"