Planning for Alzheimer's and Dementia
If you or a loved one has been diagnosed with Alzheimer's disease, it is important to start planning immediately. There are several essential documents to help you once you become incapacitated, but if you don't already have them in place, you need to act quickly after a diagnosis.
Having dementia does not mean an individual is not mentally competent to make planning decisions. The person signing documents must have "testamentary capacity," which means he or she must understand the implications of what is being signed. Simply having a form of mental illness or disease does not mean that you automatically lack the required mental capacity. As long as you have periods of lucidity, you may still be competent to sign planning documents.
The following are some essential documents for someone diagnosed with dementia:
Power of Attorney. A power of attorney is the most important estate planning document for someone who has been diagnosed with Alzheimer's disease or some other form of dementia. A power of attorney allows you to appoint someone to make decisions on your behalf once you become incapacitated. Without a power of attorney, your family would be unable to pay your bills or manage your household without going to court and getting a guardianship, which can be a time-consuming and expensive process.
Advance Directive. An advance directive may contain directions to refuse or remove life support in the event you are in a coma or a vegetative state or it may provide instructions to use all efforts to keep you alive, no matter what the circumstances.
Long-Term Care Planning. If public benefits will be needed (for example Veteran’s Aid and Attendance or Medicaid) early planning is essential. Typically, you should be thinking about 36 months advance planning for VA pension and 60 months for Medicaid.
Will and Other Estate Planning Documents. In addition to making sure you have people to act for you and your wishes are clear, you should make sure your estate plan is up to date, or if you don't have an estate plan, you should draw one up. Your estate plan directs who will receive your property when you die. Once you are deemed incapacitated, you will no longer be able to create an estate plan. An estate plan usually consists of a will, and often a trust as well. Your will is your legally binding statement on who will receive your property when you die, while a trust is a mechanism for passing on your property outside of probate.
Developing a plan now for what type of care you would like and how to pay for it will help your family later on.