How to Plan Ahead for Alzheimers (New York Life)

Planning can ease burden of dementia

As our population ages, dementia is rapidly growing in prevalence with around 4.1 million Americans disabled by it in 2013. The U.S. Census Bureau estimates that Americans age 65 and older will double to about 72 million over the next 20 years. Rates of dementia, which is a loss of brain function that affects memory, thinking, language, judgment, and behavior, increase with age, and unless a cure or new treatments are found, costs from dementia could come close to doubling by 2040, as the aging population increases and assuming the rate of dementia remains the same. The disease is not only debilitating, it’s also expensive. Alzheimer’s Disease, one of the more severe forms of dementia, costs families and society $159 billion to $215 billion yearly, according to a new study by the nonprofit Rand Corp which was published in the New England Journal of Medicine in April 2013. Those costs include drugs, medical treatments and the costs associated with day-to-day living and they top or equal the costs for other diseases like heart disease and cancer.
Based on those stats, it’s important you consider making an estate plan before you or a loved one is affected by the disease.
The following are some important points to help guide you through the process

Who should plan?

Everyone.

When should I begin planning?

Dementia affects one’s ability to think clearly and participate meaningfully in decision making, which makes early legal, estate planning even more important. Strive to get an estate plan in place as soon as possible, while you and your loved one is still of sound mind. If you wait until signs of dementia start showing, the estate plan could be invalid because the person wasn’t of sound mind.
Advance planning can help people clarify their wishes and make well-informed decisions about health care, financial and property arrangements.

Who should I ask for help?

Since laws vary from state to state, everyone’s situation is unique, and there are several legal documents that need to be prepared, please consult a qualified estate planning or elder-care attorney.

What steps can I take to prepare?

In general, you can prepare for estate planning in seven easy-to-follow steps:

1. Create a hard-copy document that includes all the information that someone might need about you in case of an emergency. Also, include contact information for your medical, financial and legal advisors. Make sure that your loved ones know where this information is and that it is easily accessible. If you put it on your computer, make sure a loved one knows the password to access it.
2. Collect and organize all your financial information and store in a secure place. This should include basic information about your income, property, investments, insurance, and savings. As many people today maintain their accounts online, it may be best to create one document with basic information including account numbers, account management and customer service contact information. Tell a trusted family member, friend, or professional advisor how they can access this information.
3. Designate a person to handle your financial and legal issues by creating a “power of attorney” or more specifically a “durable power of attorney for finances.” This legal document names someone to make financial decisions or execute instructions based on existing directives when you or a loved one no longer can. This important step prevents having to have state courts take action and possibly seize control of financial affairs from your family.
4. Ask your attorney to create advance directives for financial and estate management. This must be created while the person with dementia still can still determine what should be done. These directives usually include four basic documents:
   • A health care proxy that empowers someone to make medical decisions
   • A living will to communicate health care wishes
   • A will that determines how a person’s assets and property should be distributed upon death, custody of minor children, and funeral and/or burial arrangements.
   • A living trust to determine how assets should be managed during disability, illness and/or incapacitation.
5. Ensure that that insurance coverage is in order and that beneficiary designations have been properly filed.
6. Consider creating a heritage document that passes the intangible wealth you or your loved one has gained over a lifetime. This could be in the form of a letter to loved ones, a collection of photographs or mementos, or simply a document that conveys values or life lessons to heirs.
7. Finally, make sure that estate and financial plans are shared with pertinent advisors, family, and friends. This will make it easier for those involved, when and if there is an onset of Alzheimer’s that requires quick decisions.

Is there anything else I need to consider?

As with all long-term planning, it is important that you review estate plans over time. Any changes in situations such as divorce, relocation, a death in the family, as well as state laws, can affect the outcome of how estate plans are interpreted and executed.
This article is for more information purposes only. Please consult your medical professional for information to your situation. For information about planning for Alzheimer’s visit the National Institute on Aging’s page about Legal and Financial Planning for People with Alzheimer’s Disease Fact Sheet.
http://www.nia.nih.gov/alzheimers/publication/legal-and-financial-planning-people-alzheimers-disease-fact-sheet

Essential Planning for Seniors (Kiplingers)

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.

 

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© 2012 The Kiplinger Washington Editors, Inc.