Before It’s Too Late – The Importance of Legal Planning for People with Alzheimer’s

In order to treat the more than 5 million Americans living with the disease, it will cost American society an estimated $214 billion, including $150 billion in costs to Medicare and Medicaid. Further, the out-of-pocket spending for individuals with Alzheimer’s and other dementias is estimated at $36 billion.

Alzheimer’s disease, the most common form of dementia, is a physical and terminal illness that causes difficulties with memory, thinking, and behavior. It is not a normal part of aging.

Alzheimer’s disease begins slowly. The most common early symptom of the disease is difficulty remembering newly learned information, because changes usually begin in the part of the brain that affects learning.

Over time, the symptoms progressively worsen, and include disorientation; mood and behavior changes; deepening confusion about events, time, and place; unfounded suspicions about family, friends, and professional caregivers; increasingly serious memory loss; and behavior changes, including wandering away from home and difficulty speaking, swallowing, and walking. Eventually, the person will require total care. This can cause great stress on family members and loved ones.

Although it is important for everyone to plan for their future, legal planning for those diagnosed with Alzheimer’s disease takes on heightened importance. Early planning allows your loved one with the disease to be involved and express their wishes for future care, which eliminates guesswork.

Once an individual with Alzheimer’s disease has lost capacity, it is too late for him or her to designate the person or people they wish to make their healthcare, financial, and estate-planning decisions. It is imperative to note that most people in the early stages of Alzheimer’s disease do have the capacity to execute estate-planning documents.

When a client initially meets with an attorney, the attorney must determine whether or not the client has the mental capacity necessary to reasonably articulate their wishes concerning their legal affairs. ‘Testamentary capacity’ is the legal term that refers to a person’s ability to be of sound mind in reference to creating or altering estate-planning documents. Unfortunately, legal testamentary capacity or competence is not a black-and-white determination.

The Massachusetts Supreme Judicial Court provides the following standard definition of capacity to execute wills: “Testamentary capacity requires ability on the part of the testator to understand and carry in mind, in a general way, the nature and situation of his property and his relations to those persons who would naturally have some claim to his remembrance. It requires freedom from delusion, which is the effect of disease or weakness, and which might influence the disposition of his property. And it requires ability at the time of execution of the alleged will to comprehend the nature of the act of making the will.”

Although this language may seem complex, in general, the requirements of testamentary capacity are fairly simple. Your loved one with Alzheimer’s disease must meet the above requirements at the moment the estate-planning documents are executed. Therefore, documents may be valid even if the testator is in the midst of delusion immediately prior and subsequent to execution, as long as he or she possesses the requisite testamentary capacity at the moment of execution.

If you have a loved one with Alzheimer’s disease or any form of dementia, the following should be considered immediately in the event that your loved one does not have a current or updated plan in place.

Estate planning, in its most basic essence, is a process for nominating a trusted person to make medical and financial decisions when you are no longer able, and planning for the disposition of your assets upon death. Regardless of the size of your estate, there are several important considerations.

Everyone needs a will, the most basic estate-planning document. It provides for the orderly distribution of your estate upon death.

Another essential estate planning tool is a healthcare proxy. This document allows a designated person, called a healthcare agent, to make health-related decisions for you if you become incapacitated and cannot make them yourself.

This document is particularly essential when Alzheimer’s disease progresses, as your loved one will understand your wishes regarding care and end-of-life decisions. In the event that no healthcare proxy is in place, loved ones will have to petition the court to become a legal guardian, which is an expensive, time-consuming, and public process.

Another critical estate-planning tool is a durable power of attorney. This document gives the attorney-in-fact the ability to handle your financial affairs during your lifetime when you are incapacitated. This will prevent your loved ones from having to go to court and obtain a conservatorship, which, like guardianship, is expensive, time-consuming, and public.

While most families prefer to keep their loved one at home as long as possible, it is common for an individual with Alzheimer’s to have to be relocated to a skilled-nursing facility when family members can no longer provide the necessary round-the-clock care. Due to the characteristics of the disease, Alzheimer’s residents typically reside in nursing homes longer than residents without dementia.

Since the average cost of a nursing home in Massachusetts is in excess of $10,000 per month, long-term-care financing is a critical component of the planning process for a loved one with Alzheimer’s disease. As such, effective planning for long-term-care financing is a must to preserve your family’s assets against being drained by the costs of nursing care.

The available options to pay for nursing-home care include private payment, long-term-care insurance, and Medicaid. Private payment can quickly deplete a lifetime of savings and significantly limit the amount passed to heirs, so it is generally preferred to find an alternative form of payment. Medicaid planning, most often, requires the assistance of an experienced elder-law attorney.

Even if a loved one is afflicted with Alzheimer’s disease and does not have a plan in place, it may not be too late. It is important, however, to see a qualified estate-planning and elder-law attorney as soon as possible to ensure that the ever-changing, intricate laws and requirements regarding estate planning and long-term-care planning are followed. Such an advisor is the best resource for determining how to draft an effective plan that can help preserve your family’s resources.