A diagnosis of dementia, a category of diseases affecting memory and thinking that includes Alzheimer’s disease, can feel overwhelming and upsetting. You might worry that you will lose control over your life and ability to make your own decisions. Fortunately, receiving a diagnosis of dementia or Alzheimer’s does not mean that you cannot execute legal documents or make decisions about plans for your future finances and health care.
People with dementia can execute legal documents to plan for their futures when they have the mental state — or capacity — to do so. Capacity refers to your ability to understand the contents of a legal document, such as a will, and know the consequences of executing it. If you know who your family is, understand your assets, and comprehend your will, you can execute a valid will and plan for the distribution of your estate after your death, provided you understand what you are signing and its effect on your life.
The following can help you in planning where you wish to live, what kind of care you receive, and what happens to your assets if you get severely ill or pass away.
Health Care Power of Attorney
Consider appointing a health care agent to make medical decisions if you become incapacitated. You can name a health care agent using a health care power of attorney, sometimes called a medical power of attorney or a durable power of attorney for health care. Your health care agent can make medical choices if you can no longer do so.
Picking someone you trust, such as a responsible child or spouse, or another family member, can give you peace of mind that they will have your best interests and desires in mind when they make decisions. For instance, dementia patients who prefer receiving in-home care can express this wish to their agent.
In the power of attorney document, you can also state your intentions regarding health care and limit your agent’s capabilities if you wish.
For an added layer of protection, you can also draft an advance directive or living will that states your desires regarding medical treatment if you are unable to communicate with your physician. Your living will can express whether you want treatment to prolong your life.
Financial Power of Attorney
Using a financial power of attorney, known as a power of attorney for property, you can select a trusted individual to handle your financial affairs if your disease progresses such that you can no longer make financial decisions. Your financial agent can manage your money and pay bills on your behalf, but they cannot use your money for themselves.
In the power of attorney for property document, you can restrict your agent’s powers. For instance, a person might specify that the agent can manage personal accounts, but not sell the family home.
Long-Term Care Planning
After a dementia diagnosis, consider whether you would like to receive long-term care at home or in a facility, and whether you intend to apply for Medicaid or long-term care insurance. If you want to apply for Medicaid, you might need to prepare your finances to become eligible.
Last Will and Testament
Making a last will and testament, also known as a will, can help ensure your assets go to your family and friends when you pass away. You can determine how much of your money each beneficiary will receive and make bequests to individuals. For example, if you have items of sentimental value, you can leave them to specific people. Without a will, your assets will transfer to your heirs according to the law in your state.
How frequently you should review your estate plan depends on how old you are and whether there has been a significant change in your circumstances. If you are over age 60 and you haven't updated your estate plan in many decades, it's almost certain that you need to update your documents. After that, you should review your plan every five years or so. But if you're younger, you don't need to do so nearly as often.
Here are a few age ranges and what they mean in terms of estate planning:
18-30 Everyone needs a durable power of attorney, health care proxy and HIPAA release so that they have people they choose to step in and make decisions for them in the event of incapacity.
30-40 Once you begin accumulating assets, get married, and have children, it's important to create an estate plan to care for your loved ones in the event of your death. It also can't hurt to update your durable power of attorney, health care proxy and HIPAA release, since the people you may have appointed at 18 (your parents?) may not be the people you want in these roles at 35.
40-60 Unless there's been a change in your circumstances, and assuming you've set a good plan in place during your 30s, you probably don't need to review your estate plan during your 40s and 50s.
60-70 Once you've hit your 60s, it's time to take a look. Your children are probably grown. You may have grandchildren. And, hopefully, you've accumulated some wealth. The people you appointed to step in in the event of incapacity when you were 35 may not be in a position to assist when you're 65. You may have retired or are contemplating doing so. And, unfortunately, the chances of disability or death increase with every year.
70+ Now it's time to review your plan every three years or so. Changes happen -- to your health and that of your loved ones, to the tax laws, to the programs supporting long-term care or disability care. It's important to have a plan in place and to adjust it as circumstances change.
Change in Circumstances
While the timeline above outlines when you should review and perhaps update your estate plan, it needs to be supplemented by the following potential changes in circumstances that would warrant a review of your plan to see if it still meets your goals and needs:
Marriage. You're likely to want your assets to go to your spouse and to name him or her to be your agent in the event of incapacity.
Divorce. Likewise, if you get divorced, you probably won't want your assets to go to your ex-spouse or to rely upon him or her to step in if you were to become incapacitated.
Children. Once you have children, you'll want to provide for them and to name someone to step in as guardian in the event of your death or incapacity and that of their other parent, if any. Generally, once you have a plan in place you do not have to update it unless you have more children.
Disability. If you or someone who would inherit from you becomes disabled, you will need to plan to protect and manage your assets, whether for yourself or for your beneficiaries.
Wealth. If you accumulate sufficient assets to exceed the thresholds for state and federal estate taxes -- $11.4 million federally -- you may want to plan to reduce or eliminate such taxes.
Moving. If you move to a new state or country, it will be important to have your estate plan reviewed to make sure it works in the new jurisdiction.
In short, until you reach age 60 or 70, reviewing your estate plan every five years probably is overkill. But do so whenever you have a change in circumstances such as those listed above. If you're over 60 and haven't updated your estate plan in many years, now's the time. Then, having a review every five years is definitely a good rule of thumb.
It’s quite a contrast to Jackie Kennedy Onassis’ will, who generously instructed that each of Lee’s children were to be given $500,000. However, the relationship between the ex-princess and her daughter-in-law Carole allegedly waxed and waned, after her son Anthony’s death from cancer. Lee herself was said to be hard pressed for cash, because of an extremely extravagant lifestyle. However, her own mother had set up a trust for her benefit decades ago.
Radziwill’s last will and testament was signed on Sep. 20, 2018, less than five months before she passed away. She died at age 85 of apparent natural causes in her apartment in New York City.
Her daughter-in-law, Carole DiFalco Radziwill, had appeared on “The Real Housewives of New York City.”
Because her son Anthony predeceased his mother, her will stated that she has one child, named Christina. She directed her executors to sell her New York City co-op apartment as soon after her death as may be practicable and to dispose of the proceeds, as part of her estate. She split her time between New York City and Paris, where she kept an apartment that was sold in 2017.
Throughout her high-profile life, Lee would reportedly turn to her sister Jackie and ask for funds to finance her lavish lifestyle. In response, Jackie did not leave any money for her sister in her own will, explaining simply that she had provided for her sister during her lifetime.
Lee was married to three men, who left her substantial funds. The last was Herbert Ross, a wealthy director and producer. However, in her own will, light is shed on a trust set up for her by her mother, Janet Lee Auchincloss, a leading member of American society in Newport RI, and Washington, D.C. The trust was created in 1975, an agreement between Jackie as grantor and Lee and the U.S. Trust Company of New York as trustees and revealed that Christina becomes the beneficiary of this and any other trusts that are in her and her mother’s name. The value of the trust was not revealed.
The executor of Lee’s wills are two friends, one who lives in Cornwall CT and another who lives in Harding Township, NJ.
Lee’s relationship with her daughter-in-law received a nice grace note, when Carole wrote about her mother-in-law and said that even though her husband was gone and there were no grandchildren, which often bonds in-laws, Lee always introduced her as her daughter-in-law, and even after long absences, she never wavered.
Ironically, the first item in her estate states that all debts and funeral expenses be paid as soon as practicable, and that no extraordinary means or special accounting loopholes be taken to avoid paying any death taxes. That’s an interesting comment from someone who was blessed with wealth, glamour and connections, but never had enough money to fund her own lifestyle.
“To many, will planning and estate planning are the same. While the terms may seem interchangeable, they are actually very different processes.”
Will planning and estate planning are very different processes. Both provide family members with instructions on how assets should be distributed after death, but estate planning goes beyond that, to provide instructions on your health, finances and more while you are living, according to an article from Lexology titled “The Differences Between Will Planning & Estate Planning.”
An estate planning lawyer can help you determine exactly what kind of planning you need, help you create the documents that will support your needs and give you and your family guidance in more complex matters.
Will planning is a relatively simple process that involves creating a document known as a last will and testament. It conveys instructions for after you have died. That may include naming a guardian to rear your children or who should take over your business, who should be in charge of your estate, the executor and who will receive your assets.
Everyone needs a will. It avoids family disputes about property, saves money on legal expenses that occur when there is no will and makes many decisions about your estate much easier. It is a kindness to your loved ones, to have a will.
Estate planning is a little different. It is more detailed and involves tax planning and certain protections for you while you are living. A living will is used to convey your wishes about what kind of medical care you want, if you should become unable to speak on your own behalf. The living will includes end-of-life care, the use of extraordinary measures, like a respirator or feeding tube and more. This is also a kindness to your loved ones, since it spares them from having to guess what your wishes might be.
You’ll also want to have a financial Power of Attorney created to instruct a named person regarding how to handle your money, your business and your investments, if you are unable to function. This person can do anything you could do, from transacting business to moving money into accounts, etc.
A living trust can be used to outline your wishes regarding your property and finances. An estate planning attorney will be able to review your assets and determine whether you need a living trust or if there are other trusts that may be more appropriate for your situation.
Beneficiaries are the individuals named on various accounts. They will receive assets directly from the institution that holds the assets, like insurance policies, retirement accounts, investment accounts and the like. It’s very important to understand that when there is a beneficiary named in a document, that beneficiary will get the assets, regardless of what your will says. These should be updated on a regular basis and if possible, you should always have a primary beneficiary and a secondary beneficiary.
An estate planning attorney will review your situation and talk with you about your goals for your family and your assets after your death. They will create a comprehensive plan with the necessary documents.
“Besides new exercise regimes and attempts at savings accounts, from a legal perspective, the new year is the perfect impetus for tackling life’s perennial to-do list.”
The New Year sees young adult clients calling estate planning attorney’s offices. They are ready to get their estate plans done because this year they are going to take care of their adult responsibilities. That’s from the article “Estate Planning Resolutions for 2019: How To Be A Grown-Up in The New Year” in Above The Law. It’s a good thing, especially for parents with small children. Here’s a look at what every adult should address in the New Year:
Last Will and Testament: Talk with a local attorney about distributing your assets and the guardianship of your young children. If you’re over age 18, you need a will. If you die without one, the laws in your state will determine what happens to your assets, and a judge, who has never met you or your children, will decide who gets custody. Having a last will and testament prevents a lot of problems, including costs, for those you love.
Power of Attorney. This is the document used to name a trusted person to make financial decisions if something should happen and you are unable to act on your own behalf. It could include the ability to handle your banking, file taxes and even buy and sell real estate.
Health Care Proxy. Having a health care agent named through this document gives another person the power to make decisions about your care. Make sure the person you name knows your wishes. Do you want to be kept alive at all costs, or do you want to be unplugged? Having these conversations is not pleasant, but important.
Life Insurance. Here’s when you know you’ve really become an adult. If you pass away, your family will have the proceeds to pay bills, including making mortgage payments. Make sure you have the correct insurance in place and make sure it’s enough.
Beneficiary Designations. Ask your employer for copies of your beneficiary designations for retirement accounts. If you have any other accounts with beneficiary designations, like investment accounts and life insurance policies, review the documents. Make sure a person and a secondary or successor person has been named. These designated people will receive the assets. Whatever you put in your will about these documents will not matter.
Long-Term Care and Disability Insurance. You may have these policies in place through your employer, but are they enough? Review the policies to make sure there’s enough coverage, and if there is not, consider purchasing private policies to supplement the employment benefits package.
Talk with your parents and grandparents about their estate plans. Almost everyone goes through this period of role reversal, when the child takes the lead and becomes the responsible party. Do they have an estate plan, and where are the documents located? If they have done no planning, including planning for Medicaid, now would be a good time.
Burial Plans. This may sound grim, but if you can let your loved ones know what you want in the way of a funeral, burial, memorial service, etc., you are eliminating considerable stress for them. You might want to purchase a small life insurance policy, just to pay for the cost of your burial. For your parents and grandparents, find out what their wishes are, and if they have made any plans or purchases.
Inventory Possessions. What do you own? That includes financial accounts, jewelry, artwork, real estate, retirement accounts and may include boats, collectible cars or other assets. If there are any questions about the title or ownership of your property, resolve to address it while you are living and not leave it behind for your heirs. If you’ve got any unfinished business, such as a pending divorce or lawsuit, this would be a good year to wrap it up.
The overall goal of these tasks is to take care of your personal business. Therefore, should something happen to you, your heirs are not left to clean up the mess. Talk with an estate planning attorney about having a will, power of attorney and health care proxy created. They can help with the other items as well.
“If you find yourself one of the successful snowbirds that we all envy, you may have already begun packing clothes and other necessities. Your car’s oil is likely changed, and you will not pull out of the driveway without a full tank of gas.”
Not everyone travels south for the winter in September. Many like to wait until after the holidays, so they don’t miss out on family gatherings. Then, on New Year’s Day or shortly thereafter, off they go, heading to a warm, sunny climate to enjoy the fruits of their labor.
If that’s your annual schedule, congratulations. However, before you go, advises LimaOhio.com in the article “Extra checklist before heading south for the winter,” make sure you’ve taken care of some personal legal business. It’s just four items—but they are very important tasks for snowbirds.
First, make sure that your general/financial power of attorney and healthcare power of attorney documents have been updated. Does your family have copies of these documents? Or do they have 24/7 access through a portal from your estate planning law firm?
Some law firms provide laminated cards for clients to give to family and friends that gives the holders of the cards access to these powers, while clients are out of town. Others are starting to use encrypted thumb drives, so that clients have documents wherever they go. Make sure you have these documents and that the people who will need them, either have them or can get them in a moment’s notice.
Second, review your living will with your estate planning attorney. Update them, if changes need to be made and get copies to your children and/or friends.
Third, make sure that your last will and testament is updated. Have you had any big changes in your life since the last time it was reviewed? Marriages, deaths, divorces, births and adoptions are the typical “trigger” events that signal a need for review. Who will have that document? If your estate planning attorney maintains original copies for clients, then make sure to have another original on your person or safely secured with a loved one.
Lastly, and this takes a little time but is well worth doing, create a list of all your assets. Make sure they are properly titled for your situation. Should you have all your bank accounts become Payable on Death to your spouse? When was the last time you checked your beneficiary designations? Chances are good there are beneficiary designations on your bank, investment, and retirement accounts and on your life insurance policies. Wherever you have a beneficiary designation, you should also have a contingency beneficiary.
Once you’ve gotten all your estate planning properly addressed, you’ll be able to enjoy the holidays and your warm weather fun, knowing you’ve taken care of these important matters.