Estate Planning for Alzheimer’s and Dementia

Dementia is a term that refers to a set of symptoms; memory loss, unclear thinking, a decline in problem-solving skills. Several diseases can cause these symptoms. Alzheimer’s is one one example of a disease that destroys the brain and can cause dementia. Other common causes are vascular dementia, Dementia with Lewy bodies, Mixed Dementia, Parkinson’s Disease Dementia, Frontotemporal Dementia, and Huntington’s Disease.

Estate Planning for Alzheimer’s or Dementia is Vital

It is painful to think of a future where you may suffer from dementia, but if you don’t plan for the possibility, you not only put your estate at risk, you may put your family and your care at risk. Once dementia reaches the point where the person is unable to understand their assets, the documents’ purposes, or remember family members, a person can no longer create or modify an Estate Plan. Once the Dementia has progressed that far, the only option your family has is to file for Guardianship. Petitioning the court for a Guardian becomes necessary if you have not executed a Power of Attorney giving an agent of your choice the authority to act for you financially, or a Health Care Power of Attorney giving an agent authority to make medical decisions.

If you have no estate plan, then at your death, your assets pass under the State’s Intestacy Rules. Also, without a Will, there are no protective trusts to shelter assets for your loved ones. The Intestacy Rules do not take your wishes into consideration. A Will allows you to craft a plan that reflects your real desires.

• Read more about the Pennsylvania Intestacy Rules.
• Read more about the New Jersey Intestacy Rules.

Estate Planning When Your Spouse Has Dementia

It is equally important to have an Estate Plan in place for yourself when your spouse has dementia. Dementia does not mean that your spouse will die before you, nor is there a guarantee that you will remain healthy enough to provide for your spouse’s care unassisted. While your spouse certainly needs to prepare an estate plan, so do you. 

Essential Documents for Your Estate Plan If Your Spouse Has Dementia

Revocable Trust: One technique that has worked well for other families is for the formation of a Revocable Living Trust for the healthy spouse. All assets pass into this trust, leaving nothing in the ill spouse’s name. Putting all assets under the well spouse’s control gives the healthy spouse the ability to manage assets and pay bills. But, the 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, this person can seamlessly take over managing the trust. Care is provided to both spouses. But, no assets ever pour into the name of the ill spouse. This Revocable Trust must be carefully drafted to address both spouses’ needs as well as complex tax and special needs provisions.

Will: If you have a Revocable Trust, then it will determine where your assets pass at death. But, if you have decided not to use a Revocable Trust, then you should have an updated Will that reflects your wishes. Without a Will, the state determines where your assets pass at death. The State provides no protective trusts and disregards your wishes. A properly drafted Will ensures your assets provide for your spouse’s care.

Financial Power of Attorney: A Durable General Power of Attorney appoints the person or persons you wish to manage your assets once your dementia advances. Your current document might name your spouse, requiring an update.

Medical Power of Attorney and Living Will: In your Medical Proxy and Living Will, you choose the person who will make your medical decisions if you are unable. Your current document might name your spouse, which must be updated.

Irrevocable Trust: An Irrevocable Trust formed during your life is an excellent tool to protect assets from creditors, keep assets separate from your spouse’s assets, reduce estate and inheritance taxes and remove property that might cause a dispute between your spouse and children at your death. An Irrevocable Trust can hold assets for your spouse, but shelter the assets from your spouse’s creditors or from predatory persons who would otherwise steal your spouse’s money. Irrevocable Trusts address many different situations and protect your spouse should you non longer be there to do so.

What Can Happen If You Do Not Have a Will

Guardianship: You could fall ill and become incapacitated while your spouse has advanced dementia. If you have not executed a Durable General Power of Attorney giving an Agent authority to act for you financially, or a Health Care Power of Attorney giving an Agent authority to make medical decisions, it will be necessary to petition the court for a Guardian. This process can become complicated if your spouse is unable to care for you but battles family members for this right. Family conflict can end in permanent damage to relationships.

Intestacy: If you do not have a Will or estate plan, then, upon your death, your assets will pass under the State’s plan. The intestacy rules might give all your assets to your incapacitated spouse, who is unable to manage these assets. Or, worse, a spouse who is vulnerable to other people’s deceptions. Also, without a Will, there are no protective trusts to shelter assets for your loved ones. The Intestacy Rules do not take your wishes into consideration. A Will allows you to craft a plan that reflects your real desires.

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If you have any questions about estate planning when your spouse has Alzheimer’s, Dementia or any other estate planning topics, please contact us to schedule a free consultation. For more than two decades Klenk Law has focused only on Estate Law. We’ve seen it all, and this experience allows us to explain complex estate planning techniques clearly and concisely. We make it easy for you to understand estate planning so you can make the best decisions for yourself and your family.