By Ronald A. Fatoullah, Esq. and Eva Schwechter, J.D.
If a loved one has been diagnosed with Alzheimer's Disease, one of the first steps to take is to contact an elder law attorney to initiate a plan. There are several essential documents to help handle a person's affairs once he has become incapacitated, but if these documents are not already in place upon diagnosis, the plan should be implemented very shortly thereafter, while the individual has the capacity.
It is important to note that having dementia does not necessarily mean that an individual is not mentally competent to make planning decisions. The level of capacity a person must have to sign many estate planning documents is that of "testamentary capacity," which simply means that he or she must understand what he/she is signing, and the implications of what is being signed. Simply having a form of mental illness or disease does not mean that a person automatically lacks the required mental capacity. As long as the individual has periods of lucidity, he or she may still be competent to sign planning documents. An individual's capacity is determined on a case-by-case basis.
The following are some essential documents for an individual recently 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 or another form of dementia. A power of attorney allows an individual to appoint someone to make financial decisions on his/her behalf. Without a power of attorney, family members and loved ones may be unable to pay an individual's bills, manage his household, or assist him in qualifying for government benefits such as Medicaid without going to court and petitioning for guardianship, which is a time-consuming and expensive process.
Health Care Proxy: A health care proxy allows a person to appoint someone else to act as his/her agent regarding medical decisions. This document will ensure that an individual's specific medical treatment instructions are carried out. In general, a health care proxy takes effect only when someone requires medical intervention and a physician determines that the individual is unable to communicate his wishes concerning treatment.
Medical Directive or Living Will: Medical directives and a living will explain what type of care a person would like if he or she is unable to direct his/her own care. A medical directive can be included in a health care proxy or it can be a separate document. It may contain directions to refuse or remove life support in the event that the individual is in a coma or a vegetative state, or it may provide instructions to use all efforts available to keep the person alive no matter what the circumstances.
Wills and Trusts: In addition to making sure agents are appointed to act on behalf of an individual with a recent diagnosis of Alzheimer's, and ensuring that the individual's wishes are clear, it is important to make sure his estate plan is up to date. An estate plan directs who will receive a person's property upon his passing and who will manage his affairs. Once a person is deemed incapacitated, he will no longer be able to create such a plan for himself. An estate plan usually consists of a will, and often a trust as well. A person's last will and testament is his legally binding statement specifying who will receive his property upon his death, while a trust is a mechanism for passing on one's property outside of the probate system. (There are various types of trusts, a discussion of which is beyond the scope of this article, but which will be addressed in future articles.)
In addition to executing these documents, it is also imperative to create a plan for long-term care. Long-term care is expensive and can be both emotionally and financially draining for family members. Developing a plan now for the type of care an individual would prefer and the method of paying for such care will help that person's family members later on. An elder care attorney should be contacted for assistance in developing an appropriate plan and for drafting the necessary documents.
Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Eva Schwechter, J.D. recently graduated from Hofstra University School of Law, where she was a member of the Hofstra Law Review. The law firm can be reached at 718-261-1700, 516-466-4422, or toll-free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management firm can be reached at 516-466-3300 or 800-353-3775.
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