A diagnosis of Alzheimer’s disease has profound implications on the health and daily life of an individual but also on their legal status and capabilities. As the disease progresses, cognitive decline can impair decision-making abilities. If you or a loved one are diagnosed with Alzheimer’s disease, dementia, or any other condition that impairs cognitive function, it’s vitally important that you take care of legal matters to ensure that your wants and needs are honored.
Bottom Line Health spoke with Bryan J. Adler, Esq., a board-certified elder law attorney through the National Elder Law Foundation, to find out what you need to do to protect yourself. He advises his clients to take a multipronged approach to planning that involves consulting with a doctor about the progression of the disease, and simultaneously starting discussions about legal and financial planning. This dual approach ensures that as the disease progresses, all necessary measures are in place to manage the varying aspects of care and support.
He recommends focusing on three key aspects:
- Securing Care: Determine what, if any, immediate care is needed and how to access it. Once care needs are established, it’s important to assess whether the person with Alzheimer’s can engage in planning.
- Advocacy: Learn how to effectively advocate for necessary services and support.
- Financial Management: Plan strategically to avoid depleting your life savings due to the high costs of long-term care.
Essential legal documents
There are some key legal documents that need to be created or updated as soon as possible. They should be prepared while the individual with Alzheimer’s is still deemed to have the necessary legal capacity to make these decisions.
- Living will. This document provides instructions for medical care, particularly concerning life-sustaining treatment.
- Power of attorney. A POA appoints an agent to make financial decisions on behalf of the person with Alzheimer’s.
- Health Care Proxy or Medical Power of Attorney (MPOA). This designates someone to make health care decisions when the person is no longer able. The POA and health POA do not need to be the same person.
The POA and MPOA documents are a higher priority than a will at this time as they allow for ongoing decision-making regarding finances and health.
Adler reports that many clients he has worked with have inadequate POAs, usually generic forms downloaded from the internet. These may not be tailored to a person’s specific needs. It’s important to note that being married does not eliminate the need for these documents. Every situation is unique, requiring specific legal instruments to ensure proper care and management of assets.
Financial strategies
Estate planning is another critical aspect that should be addressed early. Without legal documents like a power of attorney in place, an individual’s financial assets could be left unprotected. This situation can lead to mismanagement of assets. Without a designated financial decision-maker, assets may be poorly managed as the person’s cognitive abilities decline. There is also a significant risk of fraud and exploitation as the individual becomes more susceptible to scams and financial abuse, potentially leading to significant financial losses. From transferring assets to creating trusts, financial planning involves protecting assets to ensure the availability of funds for long-term care without going broke. This may involve accessing various accounts and handling assets carefully, selling life insurance policies, or—in limited cases—using reverse mortgages.
At Adler’s firm, which specializes in elder law, legal representatives work with financial advisors to restructure clients’ portfolios not just for growth but also to manage expenses related to personal care. They also collaborate with accountants to plan for potential taxes and exploring benefits like Medicaid, which might require spending down assets.
Guardianship
The importance of having a POA effective immediately rather than waiting until incapacitation cannot be overstated. It’s crucial to establish trust with the person designated to handle affairs and to ensure all legal documents are recognized and accepted by financial institutions and health-care providers.
If a POA is not established and the individual becomes incapacitated, guardianship might be necessary. This requires a court process and can be restrictive and complex, especially with family dynamics that include second marriages or estranged relatives. Guardianship gives a designated guardian the legal authority to make personal and health-care decisions, while conservatorship involves appointing a conservator to manage financial affairs.
Both require a court process. This can be a lengthy and costly process, and there is no guarantee that a spouse or adult child will be named guardian. A judge may appoint a professional guardian as well. Being placed under guardianship or conservatorship can significantly reduce an individual’s control over personal and financial decisions, affecting their sense of autonomy and dignity.
Communicating wishes
One of the largest areas of contention and confusion can arise from a lack of clear communication about end-of-life wishes and financial intentions. Parents and individuals must articulate their desires clearly to avoid misunderstandings and conflicts among family members.
The overall burden on family members can be overwhelming when no legal preparations have been made. Family members may find themselves having to make difficult decisions without guidance, increasing emotional stress and potential guilt. Furthermore, the costs associated with legal proceedings, health care, and potential financial mismanagement or fraud can create significant financial stress for the family.
Plan ahead
Like planning a trip, managing Alzheimer’s disease requires careful, proactive planning to ensure that all arrangements are in place when needed. Legal and financial planning should not be deferred: Failing to establish clear directives and protections can lead to significant hardships and emotional distress for everyone involved. Engaging with specialists in elder law and financial planning early in the process ensures that the rights and wishes of the individual with Alzheimer’s are protected and respected throughout their journey with the disease.
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