November is National Alzheimer’s Disease Awareness Month.
We understand it is painful for one to think of a future where they might suffer from Alzheimer’s or other forms of dementia. But if you do not make plans for your Estate right away, you are not only putting your assets at risk but also putting your family’s future at risk.
Once dementia reaches a stage where the person does not remember their family members or understand their assets and other documents, they will not be able to create or modify an existing Estate Plan.
Once the disease has progressed this far, the only option is for family members to file a Guardianship. Petitioning the court for a Guardian becomes necessary if one hasn’t executed a Financial or Health Care Power of Attorney.
Also, if the individual hasn’t created an Estate Plan at all, they would die Intestate. This means the Estate will be divided according to the State’s Intestacy Rules and not according to the individual’s wish.
Estate Planning Tools you can use to prepare for your future
Power of Attorney
A Power of Attorney is someone who ‘steps into your shoes’ in case of your sudden illness or incapacity. When you appoint a Power of Attorney for your financial matters, they are authorized to make legal, tax and financial decisions on your behalf.
Health Care Proxy
A Health Care Proxy, also known as Health Care Surrogate or Health Care Directive allows you to plan for difficult medical decisions. Through this, you can appoint someone to make health-related decisions for you in case you are unable to make them yourself. This avoids disagreements between family members as to who must decide on critical health matters (matters pertaining to your health.)
A Living Will allows you to state your wishes about your end-of-life medical care. This allows your health care directive or health care surrogate to carry out your health care wishes regarding life-sustaining procedures. Living Wills include a set of legal instructions about the treatment you wish to receive.
Estate Planning Tools to use if your Spouse has Dementia
One technique that has worked well for many is the formation of a Revocable Living Trust. All assets pass through this Trust, leaving nothing in the ill spouse’s name. Passing all assets to the healthy spouse ensures the assets are handled well and the pending bills are paid.
A Revocable Trust can also name a person of confidence as co-trustee with the right to act independently. If the healthy spouse falls ill or dies, the co-trustee can take over managing the trust.
If you do not choose to form a Revocable Trust, you need to have a Will to decide how to pass on your assets. Without a Will, your Estate will be divided according to the State’s Intestacy Rules. This means, your assets might not reach the person you wished it went to.
Power of Attorney
Your current Power of Attorney might name your spouse as an agent. If your spouse is diagnosed with Alzheimer’s or any other form of dementia, they will not be able to execute decisions on your behalf if you fall ill. Thus, your financial power of attorney and any other health care directive that names your spouse as an agent needs an update.
An Irrevocable Trust keeps your spouse’s assets separate from yours, reduces estate and inheritance taxes, protects assets from creditors, and removes property that might cause a dispute between your spouse and your children at your death.
An Irrevocable Trust holds assets for your spouse as well as shelter it from creditors or predatory persons trying to steal your spouse’s money. Irrevocable Trusts addresses many different situations and protects your spouse should you no longer be able to do it yourself.
We understand it is difficult to think about Estate Planning during trying times. But by preparing for our family’s future, we can make sure they live a comfortable and stress-free life.
This National Alzheimer’s Disease Awareness Month, talk to your attorney and create an Estate Plan if you haven’t done so already. Or, if you have an Estate Plan in place, you can decide to add a Health Care Directive or Revocable Trust so that your family’s future is secure.