Facing a Dementia Diagnosis? Take These Legal Steps to Protect You and Your Family

A dementia diagnosis is scary. You and your loved ones may be feeling overwhelmed and anxious about what lies ahead. The period after receiving a dementia diagnosis is time best spent with family and friends. However, you may also be worried about what lies ahead for your loved ones and for yourself. To alleviate some worry, and to ensure that both you and your loved ones are protected, there are some legal steps you can take immediately following a dementia diagnosis.

Gather All Documents

It may have been some time since you’ve revisited your estate plan. Or, it’s possible you never got around to creating one. Now is the time to gather your documents and make an appointment with an attorney to review and update your estate plan.

If you already have a will, power of attorney, and advance health care directive, that’s great. Get all those papers together, along with a list of your current assets, personal property, and financial institutions that hold any accounts. It is important to revisit these documents now to ensure that changed circumstances, such as deaths, marriages, divorces, and births in the family, are accommodated.

If you’ve never created one or more of these documents, don’t panic. First, you will need to round up any paperwork you can find that lists real estate, vehicle ownership, personal property, bank accounts, brokerage accounts, retirement accounts, pension information, social security benefits, life insurance, and any other documents that may be a part of your estate. Don’t worry too much about getting these documents in order or figuring out the total value of your estate. An experienced estate planning attorney can look through your paperwork and work with you to create an estate plan that best suits your needs.

Write a Will 

Creating a will is the simplest form of estate planning. A will is simply a document that you write up and have signed by a witness in accordance with state law, communicating to the probate court your preferences about how you want your estate distributed. You can also include preferences such as naming a guardian for any minor child or adult with disabilities that is currently in your care and an executor to administer the distribution of your estate.

Protect Your Assets

Most people will require a will to distribute assets when they pass. However, any will has to be reviewed by a probate court, published in the public record, and opened up for challenges by family and friends. Probate court can be costly, time-consuming, and a difficult process for your loved ones. Many people prefer to go through their assets with an attorney and try to distribute as much of their estate as possible outside of probate. To keep assets out of probate, you can set up trusts for the benefit of certain family members, and you can confirm that beneficiary designations are up to date for all financial assets.

Trusts can be set up in a number of ways, and they are highly customizable to suit the needs of your loved ones and your preference. A revocable living trust, for example, is a trust over which you retain control as the primary trustee until you are no longer able to do so. At that time, the trust will become irrevocable and the administration of the trust will pass to the secondary trustee. An irrevocable trust cannot be changed after it is set up, but it can provide for your loved ones while being shielded from some creditors. You can even set up a trust to provide for your own medical care if you are concerned about the cost of prolonged medical attention impacting your estate.

Beneficiary designations can be made on insurance policies, bank accounts, retirement accounts, and even digital assets. If you have filled out a beneficiary designation, even if it was years ago, it will control over conflicting language in your will, so it is essential to revisit all of your documents and make sure they are updated.

Execute Powers of Attorney and Advance Healthcare Directives

In addition to making sure that your loved ones will be cared for after you pass, you are likely concerned about the medical attention and nursing care you will require. Dementia affects people in many different ways, and the level of care you require will change over time. At some point, however, it is likely that you will be unable to continue making decisions regarding your finances and your medical care.  At that time, it will be essential that you have executed power of attorney and an advance health care directive.

Power of attorney is a document that designates a trusted individual who will be able to step in as a financial surrogate if you become unable to make decisions by yourself. This surrogacy allows the person with power of attorney to pay bills, make investment decisions, and manage property. When choosing a person to name as a surrogate, make sure that you communicate your wishes and ensure that they are willing and able to take on the responsibility.

An advance health care directive is a document through which you can outline your health care preferences and name a health care proxy. This person will be responsible for making health care decisions when you are unable to do so. Again, it is essential to discuss your preferences with your chosen proxy ahead of time. Make sure that they agree to fulfill the responsibility and that they understand your stated preferences. If the proxy believes that he or she will be too emotional or does not agree with your health care preferences, it may be better to choose a different person.

Communicate with Loved Ones

When processing a recent diagnosis and reviewing your estate plan, communication with loved ones will be the key. Your loved ones are concerned about you, and they want to know that your wishes are carried out. Having a carefully executed estate plan is a great way to avoid unnecessary stress, pain, and conflict after you pass. For those family members or friends that you have named as executors, trustees, surrogates, or proxies, make sure that they understand the responsibilities associated with these roles and your stated preferences. For all other loved ones, make sure that they understand and accept your decisions. Be clear and open about your estate plan, and this will avoid unpleasant surprises in the future.

Most importantly, take time to enjoy the company of your loved ones. It’s okay to ask for help, especially from an experienced professional. Choose an attorney you trust and allow them to help you. The sooner you take care of these legal matters after a diagnosis, the sooner it will be off your mind. Imagine the relief of having a solid estate plan that provides for both you and your loved ones. If you are caring for someone with dementia or want to ensure your future is protected by making the most informed decisions for yourself and your loved ones, start by calling The Tyra Law Firm at (301) 315-0811.

Written by Neil Tyra