Caring for a loved one with dementia is a challenge that countless families face every year. As a caregiver, itās crucial to understand how dementia impacts your loved oneās ability to make legal decisions. Proper planning not only ensures their wishes are respected but also allows you to provide them with the care and support they deserve.
In this post, we'll explore why estate planningāeven after a dementia diagnosisāis the best way to protect your loved one's rights and ensure they are cared for by those they trust.
Understanding Incapacity
Dementia is a progressive condition that affects memory, decision-making, and daily living. As the disease progresses, your loved one may reach a point where they are no longer able to make decisions about their finances, healthcare, or overall well-being. This stage, known as incapacity, means they can no longer legally make those decisions on their own.
Seeing someone you love struggle with their cognition is hard enough without having to worry about legal hurdles. But the good news is, with thoughtful planning, you can make sure that your loved oneās needs are met, even if they lose the ability to advocate for themselves. And yesāeven if theyāve already been diagnosed with dementia, they can still create a legally binding estate plan while in the early stages.
Estate Planning in the Early Stages of Dementia
Everyone, regardless of health, should have certain legal documents in place to protect their wishes and rights. This is especially true if your loved one has been diagnosed with dementia. The key is ensuring they still have the mental capacity to make legal decisions at the moment they sign their estate planning documents.
The good news? A person with dementia doesnāt need to be mentally alert all the time to create a valid estate plan. As long as they have the capacity at the moment they sign the documents, the plan will be validāeven if their mental state declines afterward.
If your loved one is in the early stages of dementia (or ideally, before any health problems arise), these are the estate planning tools they should have:
1. General Durable Power of Attorney (POA)
A General Durable Power of Attorney is a powerful tool that allows your loved one to appoint someone to handle their financial and legal decisions. This person, known as the agent, can manage everything from paying bills to maintaining their home and overseeing investments.
Encourage your loved one to name someone they trust while theyāre still able to make this decision. As dementia progresses, this document becomes essential to keep their affairs in order without the need for court involvement.
2. Revocable Living Trust
While a General Durable Power of Attorney is important, some financial institutions impose limits on the use of a POA, or they may not recognize it at all. To avoid these issues, itās wise to encourage your loved one to establish a Revocable Living Trust and transfer their assets into it.
A Trust allows them to name a successor trusteeāsomeone they trust to manage their assets when theyāre no longer able to. Itās essential to not only create the Trust but also to retitle the assets and update beneficiary designations to ensure everything is covered. Without this step, the Trust wonāt be fully effective, and your family could end up in court.
We help our clients decide who should serve in these key roles and at what point control should shift from your loved one to the trustee. Itās always better to get these tools in place early. Waiting until itās too late may leave your family with no option but a court process.
By taking these steps now, youāll have peace of mind knowing that the people your loved one knows and trusts will be able to step in and manage their affairs as needed. Weāve seen families experience a sense of relief when theyāve taken care of these important tasks before the dementia progresses. Theyāre able to focus on their time together without the constant worry about what might happen.
3. Power of Attorney for Healthcare
Just like a General POA, a Healthcare Power of Attorney appoints someone to make medical decisions when your loved one canāt. Establishing this early ensures their medical wishes are respected when they can no longer communicate them.
Itās also important to include a Living Will or Declaration to Physicians, which outlines their preferences for end-of-life care. This document helps avoid confusion later and ensures their desires around life-sustaining treatment and resuscitation are clear to everyone involved.
The cost of caring for someone with dementia can be substantialāranging from $2,500 to over $10,000 per month. The time to discuss these financial realities, and what your loved one wants, is nowāwhile they still have the capacity to make these important choices.
Plan Early for Peace of Mind
The most important thing you can do for your loved one is to help them complete their estate planning while they still have the capacity. Waiting too long can limit their options and create unnecessary stress for the whole family. By addressing these legal matters now, you can ensure that their wishes are honored and their affairs are managed by the people they trust, without the need for court involvement.
If your loved one is already in the more advanced stages of dementia, stay tuned for part two of this blog, where weāll explore late-stage estate planning options and ways to avoid family and legal conflict.
If youāre ready to take the next step, call us today at (470) 458-7878, to schedule a complimentary 15-minute call with our office. Letās make sure your loved one is protected.
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