A Guide to Estate Planning When Your Loved One Has Dementia

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It’s sad to see a loved one develop dementia. The forgetfulness, difficulty doing simple tasks, mood swings… Unfortunately, it is progressive. As hard as it may be, you need to get things in order and prepare for your loved one no longer being able to make decisions, care for themselves, and eventually needing long-term care. Here is a guide to help you prepare estate planning for your loved one with dementia.

What Is Dementia?

According to the Centers for Disease Control, dementia is not a disease, but an impaired ability to remember and make choices that interferes with everyday living. Alzheimer’s Disease is a form of dementia. The CDC estimates there are more than 5 million adults aged 65 and over with dementia and that number is projected to be nearly 14 million by 2060. 

Some signs that may indicate dementia are:

  • Forgetting the name of friends or family members
  • Loss of short-term memory
  • Getting lost in familiar areas
  • Not able to complete tasks independently
  • Trouble reasoning or problem solving

The main cause of dementia is damage to brain cells. In some cases, it may be caused by vitamin deficiencies or thyroid problems, which can be treated. But some dementia cases degenerate and lead to the onset of Alzheimer’s Disease, which currently has no cure.

Although there are medications that can temporarily slow the progression of dementia, patients’ cognitive abilities usually decline over time.

Estate Planning for Dementia

If your spouse or parent has been diagnosed with dementia, it’s time to start a plan of action. Time is of the essence, because your loved one may have a limited time in which they can make important decisions before their condition deteriorates to incapacity

First up, you should call a family meeting, including your loved one with dementia. You need to figure out what role siblings or other family members will take on; Who will be your loved one’s Power of Attorney? Who will serve as their Health Care Proxy?   

Related: Estate Planning: Your Guide to Get Started, Conversations to Have, and More 

If your loved one is still able to make decisions, ask what they want when it comes to choosing beneficiaries for their Will and who should get what assets. Also, ask what medical treatments they would want or not want if their condition worsens. Would they want life support? Be resuscitated? Have mechanical ventilation? Artificial feeding? When to end life sustaining treatment?

You need to compile a list of your loved one’s assets: 

  • Properties
  • Bank/Investment/Retirement Accounts 
  • Vehicles
  • Digital Assets
  • Valuables

Additionally, you will need to locate important documents like insurance policies and get access to any digital assets such as online credit cards, financial accounts and social media accounts.

Estate Planning Documents Your Parent or Spouse Needs

Having an estate plan for someone with dementia is crucial so their estate and assets will be protected, and their wishes and choices will be carried out when they can no longer make their own decisions. These are the documents your parent or spouse needs:

1. Health Care Proxy – This is the person appointed to represent your loved one when their medical decisions need to be made if they can no longer make them. Depending on your state, treatment preferences may be listed in this document.

2. Living Will – This lists health care treatment choices and works with the Health Care Proxy document. A Gentreo Health Care Proxy includes an option to answer end of life questions which are addressed in a Living Will.

Related: Planning for Incapacity: Documents to Have and Steps to Take

3. Power of Attorney – Your loved one’s appointee manages the estate’s finances; pays bills, files income taxes, and takes care of all bank and investment accounts. 

4. Last Will and Testament – This ensures that your loved one’s last wishes about how their estate should be distributed are followed after they pass. 

5. Trust – Your loved one may consider setting up a Trust where they can transfer ownership of their home and bank accounts so they can’t be touched by a nursing home to pay for care. The assets pass directly to the named beneficiaries upon the death of the settlor (the person who created the Trust), usually without going through probate.

These documents need to be signed by the loved one with dementia. As long as they have mental capacity and understand what they are signing, the documents can be endorsed by the dementia patient. 

Related: Handling an Estate When Someone Has Lost Capacity

Store your estate plan and other important documents such as life insurance policies in an online vault, like the Gentreo Digital Family Vault. All your documents are in one secure place that can be accessed anytime from anywhere when needed.

Estate Planning for After Dementia

If the dementia has reached a point where the person can no longer make their own decisions, you cannot create or modify their estate plan. This is why it is so important to get ahead of a worsening situation.

Without legal documents in place, your loved one’s fate may end up in the hands of a judge. You or your family members would have to petition the court for guardianship to make healthcare decisions or conservatorship to manage their finances.

If someone dies without a Will, the estate’s assets will pass under your state’s intestacy law as enforced by the probate court. 

If your loved one has an estate plan and the dementia reaches a critical stage, you can have peace of mind knowing their choices will be honored.

Related: Why You Should Update Your Documents After a Death in the Family

Estate Planning for Yourself When Your Spouse Has Dementia

If your spouse has dementia, make sure their estate plan is up to date and reflects their wishes while they are still cognitively able to update their plan.    

Even if your spouse has an estate plan, YOU need your own. Create a Trust to hold all assets, so that you can manage the Trust and if something happens to you, the assets will pass seamlessly to the beneficiaries in your Trust. 

You also should set up a Power of Attorney and Health Care Proxy and create or update your Will.

Conclusion

An estate plan gives your parent or spouse the power to choose what they want and ensures their dignity as they struggle with dementia. Make preparations as early as possible to avoid heartache, stress, and legal proceedings.

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