By Mary Ellis Patton
Whether it is Alzheimer’s disease, dementia, Huntington’s, ALS, MS or another illness, when a family member has been dealt a life-altering diagnosis, it changes the way you must plan for the future. A family with a person who has received such a diagnosis should seek legal advice as soon as possible. Even if the individual with the diagnosis is cognitively impaired, it does not mean that they cannot be a part of the planning process. Many times, the impaired individual can be actively involved.
Any individual should immediately make sure that they have current Power-of-Attorney for legal and healthcare. A diagnosis of dementia or Alzheimer’s disease does not mean that a person is no longer competent to sign POAs. He or she may still be legally competent to sign legal documents. (We suggest you consult an Elder Law attorney to discuss the legal definition of “competency.”)
You should carefully consider what authority is necessary to give an attorney-in-fact or an agent. Does the agent need authority to buy or sell real property, make gifts, or manage business affairs? Powers-of-Attorney should be as specific as possible.
Each person should have at least one back-up agent in addition to the primary on their POA. In the case of spouses, if one member of the couple is impaired, you should consider adding multiple back-up agents. You want to be sure that if the non-impaired spouse meets with an untimely end, that there is another person able to assist the impaired spouse.
2. Special Needs Trusts
The individual or their family can create a Special Needs Trust (also called a Supplemental Needs Trust) to benefit the individual without disqualifying them from government benefits. If the individual is likely to inherit from another person, planning needs to be done to make sure that any inheritance will not put the individual’s benefits in jeopardy. This may involve directing the assets to a Special Needs Trust.
Importantly, the law permits a spouse to create a Special Needs Trust but the trust can only be created in the will. This is an important distinction. Spouses cannot simply protect their assets (or become Medicaid qualified) by placing all their assets in a living trust. If the impaired spouse suddenly becomes the owner of substantial assets, his or her government benefits may be at jeopardy. The Spousal Special Needs Trust avoids this problem by setting aside assets owned by one spouse for the surviving spouse in a protected trust. This trust is administered to supplement and enhance the surviving spouse’s lifestyle because the future is uncertain, couples who are not currently impaired can have a Spousal Special Needs Trust in their will with a “trigger” clause to change the estate distribution to this trust if their spouse should become impaired in the future.
3. Living Wills
A living will is not the same thing as a “will” or last will and testament. A living will is a written document wherein you indicate what your choices are for your future health care, specifically involving life-support, artificial hydration, feeding tubes, and organ donation. These instructions only take effect when you are unable to communicate or are permanently unconscious or terminally ill. A living will gives you control over your medical care even if you are no longer able to communicate these choices yourself. Providing instructions and indicating your preferences ensures your wishes will be followed. Additionally, a living will provides great comfort and guidance to your loved ones and lessens the burden of having to make difficult decisions.
We recommend that you consult an attorney before executing a living will. However, more information is available here.
Diagnosis is not the end. With the proper planning, families can enjoy and care for their loved one without the burden of crisis legal planning. The recommendations above are also great for couples and individuals who have not received a diagnosis. However, any family facing an uncertain future should consult a qualified Elder Law attorney to make sure they are taking the right steps for their specific situation. If you are facing this situation, contact us today.