6 Essential Documents for Alzheimer’s
Prepare these documents, and update older ones, while you still have the
decision-making capacity to do so.
the Editors of Kiplinger’s
Retirement Report, , , Kiplinger Washington Editors
KIPLINGER — 9:18 AM ET 11/05/12
Advance-planning documents can help ensure that all your financial and
medical wishes are carried out to the letter. This is especially important when
Alzheimer's disease and dementia come into play.
It's essential to draw up these
documents -- and update older ones -- while you still have the decision-making
capacity to do so. If you don't have the appropriate documents, a court may step
in and appoint a guardian for you. Because of the differences in state law and
the complexities involved in ensuring that your instructions are airtight, see a
lawyer for help in drawing up these documents.
Power of attorney for finances. This legal document allows another
person to manage your finances on your behalf. Naming a competent, trustworthy
agent is essential. Many seniors designate a family member for this task. You
can build in checks and balances by requiring that the agent provide a periodic
accounting to a third party, such as another relative or a lawyer. Or you can
require that another individual sign off on any gifts of your property.
Powers of attorney should state the agent's authority to handle specific
investment accounts, annuities and other assets -- details that aren't included
in some off-the-shelf documents.
Make sure the power of attorney is "durable,"
meaning that the agent's powers continue when the person creating the power of
attorney becomes incapacitated.
Living trust. This document can provide detailed guidelines on how
your property should be managed if you become incapacitated.
You transfer your
investments, real estate and other assets into the trust and name yourself as
trustee, so you maintain control of the property. You also name one or more
successor trustees to manage the property if you become incapacitated, and you
include detailed instructions on how the money should be used if you are
hospitalized or need long-term care.
After you die, the trust allows the successor trustee to transfer your
property to your beneficiaries without having to go through probate. If you have
a living trust, you still need a financial power of attorney to manage
transactions that may fall outside the scope of the trust, such as dealing with
credit card accounts. To provide checks and balances, it's best to name
different individuals as your living trust's successor trustee and as your agent
under a power of attorney.
Health care directives. A living will documents your wishes
regarding life-sustaining treatment. Find living will forms for each state at
www.caringinfo.org. Some states combine the living will with a health care power
of attorney in one form.
The health care power of attorney allows you to appoint someone to make
medical decisions for you if you become incapacitated. You also can include
specific instructions on how your agent should make your health care decisions.
Laws governing these documents can vary from state to state. Look at the
American Bar Association's health care power of attorney guidance, titled
Giving Someone a Power of Attorney for Your Health Care, at
www.americanbar.org.
Also, seniors looking to include more details in their advance directives
might consider the Five Wishes form, which meets legal requirements in more than
40 states. The form, available at www.agingwithdignity.org, allows users to
designate a health care proxy and outline the care they want under various
medical scenarios.
Standard will. The will identifies the individual's beneficiaries,
who will receive the assets in the estate. It also names the executor, the
person who manages the estate. The executor will have no legal authority until
the person dies. Separately,
individuals must designate beneficiaries of their
retirement plans on the plan documents themselves; naming beneficiaries for
retirement-plan assets in a will is not legally binding.
Letter of instruction. This document will provide your family the
financial and other information they need if you become incapacitated. At the
very least, the letter should list all of your investment accounts, insurance
policies, loans, cemetery plot records, real estate holdings, military benefits,
overseas assets and even frequent-flier memberships. It should also provide the
location of important documents and the names of key contacts, such as your
lawyer, financial adviser and insurance agent. Make sure to include the computer
passwords for all of your online accounts.
Your letter also could direct heirs to cancel club memberships and to call
current and past employers regarding company benefits and stock options. Include
funeral instructions and information you would like in your obituary. You can
place all of the documents in a binder. Consider using a booklet, the
Family
Love Letter (www.familyloveletter.com), as a guide. Make sure to note the
location of any items you may have hidden.
Special needs trust. This trust is set up to provide for an
incapacitated spouse if the well caregiver dies first. The amount put in the
trust will be based on the expected cost of care over the individual's lifetime.
Such trusts are drafted so that the assets are not considered to belong to the
disabled person. That protects eligibility for certain government benefits, such
as Medicaid benefits for nursing-home care, without requiring the ill patient to
first spend down all assets. Assets could be spent on extras, such as special
therapies, a geriatric care manager or a private nursing-home room. A trustee
would make spending decisions.
© 2012 The Kiplinger Washington Editors, Inc.