What Do We Know about Early-Onset Dementia?

There is an increase in early-onset dementia cases which presents unique issues for families. Consider early testing and long-term care insurance to help.

Rita Benezra Obeiter, 59, is a former pediatrician who was diagnosed several years ago with early-onset dementia, a rare form of the disease. When this occurs in people under age 65, the conditions cause additional and unique issues because they are so unexpected and because most of the potentially helpful programs and services are designed for and targeted to older people.

One issue is that doctors typically don’t look for the disease in younger patients. As a result, it can be months or even years before the right diagnosis is made and proper treatment can start.

WLNY’s recent article entitled “Some Health Care Facilities Say They’re Seeing More Cases Of Early-Onset Dementia Than Ever Before” reports that her husband Robert Obeiter left his job two years ago to care for her. She attends an adult day care, and aides help at home at night.

If Dementia is a generic term for diseases characterized by a decline in memory, language, and other thinking skills required to perform everyday activities, Alzheimer’s is the most common. The National Institute of Health reports that there’s approximately 200,000 Americans in their 40s, 50s, and early 60s with early onset Alzheimer’s.  These numbers have lead to the consideration of Alzheimer’s legislation.  See here.  https://galligan-law.com/elder-law-community-follows-proposed-new-alzheimers-legislation/ 

One conference discussed a rise in early dementia because of the processed foods and fertilizers or the other environmental hazards, and there are definitely some genes more associated with Alzheimer’s—more so with early onset.  There is no clear answer, and most of the treatments help to slow down the progression.

There is some research showing the Mediterranean diet can be protective, as well as doing cognitive exercises like crossword puzzles and Sudoku.

It’s true that no one can predict the future of their health, but there are ways financially that families can prepare for early-onset dementia. It can cost $150,000 a year or more. That’s why you should think about purchasing long term care insurance starting at the age of 40.  You should also have your estate plan reviewed well before memory becomes a significant issue to make sure the plan facilities long-term are planning.

Long-term health insurance can pay for an aide to come into your home, and it can pay for the cost of assisted living. And, remember that health insurance doesn’t cover long-term care, nor does Medicare.  Making sure you have a financial power of attorney prepared by an elder law attorney will provide your family with the flexibility they need to handle your financial needs, bills and so on.

If you are faced with this condition or have a family history of it, consider long-term care insurance early and make sure to review your estaet plan every few years to stay up to date.

Reference: WLNY (Feb. 12, 2020) “Some Health Care Facilities Say They’re Seeing More Cases Of Early-Onset Dementia Than Ever Before”

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Stretch IRA Alternatives under the SECURE Act

The SECURE Act reduces the amount of retirement assets left to most beneficiaries. Here are 3 stretch IRA alternatives to consider for your loved ones.

The majority of many people’s wealth is in their IRAs or retirement plans that are saved from a lifetime of work. Their goal is to leave their retirement plans to their children, says a recent article from Think Advisor titled “Three Replacements for Stretch IRAs.” The ability to distribute IRA wealth over years, and even decades, was eliminated with the passage of the SECURE Act.  This accelerates taxation and ultimately reduces wealth passed to beneficiaries.  As a result, clients are seeking stretch IRA alternatives.

Now, this blog won’t address all of the details of the SECURE Act, it is instead going to focus on what I’m calling stretch IRA alternatives as a way to pass more wealth to your beneficiaries under the new rules.  Mary Galligan from our office did an excellent webinar on the SECURE act itself as well as an overview which you can find here https://galligan-law.com/-the-secure-act-/  You can also review my past blogs on the topic here https://galligan-law.com/how-the-secure-act-impacts-your-estate-plan/.

That said, keep in mind that existing beneficiaries of stretch IRAs will not be affected by the change in the law. But for retirement plan holders who die January 1, 2020, most retirement plan beneficiaries, —with a few exceptions, including spousal beneficiaries for example—will have to take their withdrawals within a ten year period of time instead of over their life expectancy.

The estate planning legal and financial community is currently scrutinizing the law and looking for strategies will protect these large accounts from taxes. Here are three estate planning approaches that are emerging as front runners as stretch IRA alternatives.

Roth conversions. Traditional IRA owners who wished to leave their retirement assets to children may be passing on big tax burdens now that the stretch is gone, especially if beneficiaries themselves are high earners. An alternative is to convert regular IRAs to Roth IRAs and take the tax hit at the time of the conversion.

There is no guarantee that the Roth IRA will never be taxed, but tax rates right now are relatively low. If tax rates go up, it might make converting the Roth IRAs too expensive.

Life insurance. This is being widely touted as the answer to the loss of the stretch, but like all other methods, it needs to be viewed as part of the entire estate plan. Using distributions from an IRA to pay for a life insurance policy is not a new strategy.  It also assumes the retirement plan holder is insurable, which might not be true given their health and age.  Life insurance also works well with all variety of beneficiaries, including trusts for your loved ones.

Charitable Remainder Trusts (CRT). The IRA could be used to fund a charitable remainder trust.  A Charitable Remainder Trust allows the benefactor to establish an income stream for heirs with part of the IRA assets, with the remainder going to a named charity. The trust can grow assets tax free. There are two different ways to do this: a charitable remainder annuity trust, which distributes a fixed annual annuity and does not allow continued contributions, or a charitable remainder unitrust, which distributes a fixed percentage of the initial assets and does allow continued contributions.  This also also a potentially much longer stream of income to beneficiaries compared to a 10 year payout.

If you plan to leave retirement assets to your loved ones and want to maximize their legacy, please contact of office to schedule an appointment and discuss with your financial advisor about what options may work best in your unique situation.

Reference: Think Advisor (Jan. 24, 2020) “Three Replacements for Stretch IRAs”

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Making End of Life Decisions Part of your Estate Plan

End of life decisions are an important part of your estate plan.

If your end of life decisions are important to you, there are a handful of documents that are typically created during the process of developing an estate plan that can be used to achieve this goal, says the article “Choosing a natural end” from The Dallas Morning News.

The four documents are the Medical Power of Attorney, the Directive to Physicians, the Out-of-Hospital Do-Not-Resuscitate, and the In-Hospital Do-Not-Resuscitate. Note that every state has slightly different estate planning laws. Therefore, you will want to speak with an experienced estate planning attorney in your state. If you spend a lot of time in another state, you may need to have a duplicate set of documents created. Your estate planning attorney will be able to help.  In Texas, attorneys often prepare the Medical Power of Attorney and Directive to Physicians, and Do-Not-Resuscitate Orders are prepared by medical systems.  See Mary’s excellent blog for further background https://galligan-law.com/living-wills-and-medical-powers-of-attorney-why-they-are-important/.

For the Medical Power of Attorney, you are appointing an agent to make health care decisions if you cannot. This may include turning off any life-support systems, refusing life-sustaining treatment and other end of life decisions. Talk with the person you want to take on this role and make sure they understand your wishes and are willing and able to carry them out.  You have the right to change your agent at any time.

The Directive to Physicians, which is basically the Living Will of Texas, is a way for you to let physicians know what you want for comfort care and any life-sustaining treatment in the event you receive a diagnosis of a terminal or irreversible health condition. You aren’t required to have this, but it is a good way to convey your wishes. The directive does not always have to be the one created by the facility where you are being treated, and it may be customized to your wishes, as long as they are within the bounds of law. Many people will execute a basic directive with their estate planning documents, and then have a more detailed directive created when they have a health crisis.  It and the Medical Power of Attorney serve to nominate and provide guidance to your healthcare decision-maker on end of life decisions.

The Do-Not-Resuscitate (DNR) forms come in two different forms in most states. Unlike the Directive to Physicians, the DNR must be signed by your attending physician. The Out-of-Hospital DNR is a legally binding order that documents your wishes to health care professionals acting outside of a hospital setting not to initiate or continue CPR, advanced airway management, artificial ventilation, defibrillation or transcutaneous cardiac pacing. You need to sign this form, but if you are not competent to do so, a proxy or health care agent can sign it.

The In-Hospital DNR instructs a health care professional not to attempt CPR, if your breathing or heart stops. It is issued in a health care facility or hospital and does not require your signature. However, the physician does have to inform you or make a good faith effort to inform a proxy or agent of the order.

If you have specific wishes for your end of life decisions, especially if you want a natural end, speak with your estate planning attorney about how to legally prepare to protect your wishes.

Reference: The Dallas Morning News (Jan. 12, 2020) “Choosing a natural end”

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