Planning for a Loved One with Dementia

Having the conversation about dementia with a loved one is never easy says The Tribune-Democrat’s recent article entitled, “Dealing with dementia | Planning ahead: ‘Have the conversation.’” But, it is important to discuss the future and ensure your loved one is well-cared for.

First, it is important not to wait too long to have this conversation.  Once there is a diagnosis or symptoms, it’s time to act.  Dementia and similar diseases are degenerative so they won’t get better on their own.  Delay in confronting this issue won’t make things better, and can limit your options on how to address it.

Plus, you want to get as much input from your loved one with dementia as you can.  As the disease progresses, they will have a harder time making their own choices, considering their situation and offering direction and preferences for their own welfare.  This could be everything from living arrangements, care plans, estate planning, to bucket list items.  Starting early includes your loved one as much as possible and preserves their own wishes and choice.

Next, address the legal documents and define the future care. Of course, you should have an estate plan in place long before this.  But, dementia will affect a person’s capacity which may make them unable to create a new plan.  So, this may be the last, best opportunity to review and update the estate plan.

You should especially review the incapacity planning documents such as powers of attorney or trusts.  These documents can help prevent the person from being placed in guardianship by the court, which is an expensive, difficult process for families. When granted, the court appoints a decision-maker, taking away the individual’s ability to make decisions – either in whole or in part. This court oversight continues throughout the individual’s life or until capacity returns.

You especially want to review who your fiduciaries are (such as your agent to make financial decisions for you) and the powers you’ve given them.  For example, if you want to use Medicaid to help pay for your long-term care, the power for your agent to make gifts may become important where it wasn’t 15 years ago when you first executed the power of attorney.

Similarly, it is important to update your medical powers of attorney and directive to physicians, as well as discussing your wishes and preferences with your agent.  These documents appoint a person to make medical decisions on your behalf if you can’t, including end-of-life care.  Having the conversation with your agent about your preferences will prepare your agents to make those decisions and relieve the burden of worrying they are making the wrong decisions.

As a final point here, you should discuss the future care plan with your loved one. Is the plan to live at home?  Will family assist with care?  Will in-home care workers be hired to assist, or is an assisted living or nursing home a better idea?   What’s more, how do you pay for it?  It is often important to discuss these question with your financial advisor and an elder law attorney so that you can make an informed choice.  You may also consider whether and how to use Medicaid or other long-term care programs to help pay for future care.  The answers to these questions also impact your estate planning.

Reference: The Tribune-Democrat (July 29, 2023) “Dealing with dementia | Planning ahead: ‘Have the conversation’”

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6 Things Seniors Should Consider Before Marrying

Seniors in particular think about marrying with an understandable degree of concern. Maybe your last relationship ended in a divorce, or it’s been a long time since they were married. However, according to a recent article from MSN, “Planning to remarry after a divorce? 6 tips to protect your financial future,” there are some steps to take to make relationships easier to navigate and protect your financial future.

Not all of them are easy, but all are worthwhile.

1.No marrying without a prenup. Everyone thinks of prenups as pertaining to divorce.  They can address divorce, but prenups do much more.  They clarify property in the marriage, such as whether it will belong to one spouse or to the other or both.  Prenups clarify many issues: full financial clarity, financial expectations, the marital rights of the couple and clear details on what would happen in the worst case scenario. This is especially important to putting each of the couples’ respective families at ease as they marry.  Getting all this out in the open before you say “I do” makes it much easier to go forward.

2.Trust…but verify. Estate planning ensures that assets pass as you want. A revocable living trust set up during your lifetime can be used to ensure your assets pass to your offspring. Unlike a will, the provisions of a revocable trust are effective not just when you die but in the event of incapacity. A living trust can provide for the trust creator and their children during any period of incapacity prior to death. At death, the trust ensures that beneficiaries receive assets without going through probate.

3.Estate planning. While you are planning to marry is a good time to check on account titles, beneficiary designations and powers of attorney, both medical and financial. Couples should review their estate plans to be sure planning reflects current wishes. This will go a long way to avoiding fights between the respective families who just recently joined together.

4.Check beneficiaries. Especially after divorce and before a remarriage, check beneficiaries on 401(k)s, pensions, retirement accounts and life insurance policies. If you marry, state law may require you to give some portion of your estate to your spouse or otherwise affect your ownership of property.  In many cases, this can be addressed by a prenup, but you still want to consult an estate planning attorney to guide you through any changes to beneficiaries.

5.Medicaid Planning.    On the negative side, you should consider the likelihood that either party will need help paying for long term care BEFORE marrying.  Medicaid, which is a government benefit that helps pay for long term care, has different eligibility based upon the marital status of the applicant.  Medicaid also expects both spouse’s assets to be used for care which has nothing to do with the prenup.  So, for some individuals, it doesn’t make sense financial to marry where one party will need long term care.

6.Choose fiduciaries wisely. The fiduciaries named in your estate plan are the people who have tasks to fulfill.  This could be a trustee, an executor, an agent and so on.  Consider carefully who should fill these roles as they may have to be between the two families.  Consider the advantages of a corporate trustee, who will be neutral and may prevent tensions with a newly blended family. If an outsider is named as an executor, or to act as a trustee, they may be able to minimize conflict. They’ll also have the professional knowledge and expertise with legal, tax and administrative complexities of administering estates and trusts.

Reference: MSN (Feb. 11, 2023) “Planning to remarry after a divorce? 6 tips to protect your financial future”

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Top 10 Success Tips for Estate Planning

Unless you’ve done the planning, assets may not be distributed according to your wishes and loved ones may not be taken care of after your death. These are just two reasons to make sure you have an estate plan, according to the recent article titled “Estate Planning 101: 10 Tips for Success” from the Maryland Reporter.

There are several other key tips for estate planning for you to consider, here are 10 of them:

Gather Asset Information.  This should include all your property, real estate, liquid assets, investments and personal possessions, and not just assets you think your Will will control, gather it all.  With this list, consider what you would like to happen to each item after your death. If you have many assets, this process will take longer—consider this a good thing. Don’t neglect digital assets. The goal of a careful detailed list is to enable your fiduciaries to quickly identify, gather and ultimately distribute your assets.

One more key thing, put this list in a place that’s accessible.  Don’t assume technology will make that possible as an era of passwords and high security, although great in most contexts, makes accessibility difficult for your family.  Instead, consider sharing information with them in advance so they are prepared to deal with this.

Meet with an estate planning attorney to create wills and/or trusts. These documents dictate how your assets are distributed after your death. Without them, the laws of your state may be used to distribute assets. You also want to pick the person whose job it is to wind-up your affairs, and these documents name the person responsible for carrying out your instructions.  If you already have estate planning documents, you should have them reviewed from time to time as clients sometimes out grow their estate plans, or have better options on how to accomplish their goals.

Anecdotally, I participate in estate-related study groups, message boards and other groups in which lawyers workshop estate problem.  The hardest cases to figure out and the hardest cases to get a satisfactory conclusion for are very typically cases where no estate planning was done.

If you don’t have an estate plan and want ideas on how to start the process, see this article:  https://galligan-law.com/how-to-begin-the-estate-planning-process/

Guardians for minors, the person who will raise your minor children if you should pass.  You can nominate who will serve as their guardians.

Beneficiaries named?  Now, very frequently people tell me in consultations that they don’t need an estate plan, because they have beneficiaries named on all of their assets. That is virtually never true, however, for this list’s purposes, I say it is worth reviewing which assets should name beneficiaries (e.g. life insurance or retirement funds) and confirm they match what you want.

One of the difficulties with beneficiary designations is that they are like old estate plans, people set them, and then never change them.  I’ve seen ex-spouses left on them, mistakes like naming only one child to receive everything because they will “do the right thing,” not having contingencies if the named person predeceased, and so on. They also write their own rules on contingencies.  So, if you leave your IRA to 3 named children, but one of them is deceased, their portion may go to their siblings, or maybe their children, or even possibly your estate.  The answer lies in the plan documents, so it is important to consider them in your estate plan.

Also, clients may have excellent wills that address all form of concerns.  But, then names one child as beneficiary of their assets.  That typically means the will has to be probated (did you have a beneficiary on your house?), but zero cash to fund it.  That is not an enviable position for the executor.  Plus, if the will establishes trusts, plans for minors or incapacitated beneficiaries, or any of the many other problems you can proactively plan for, but the asset goes directly to a person instead, all of those protections and solutions were circumvented.  So, speak with your estate planning attorney to ensure the beneficiary designations work with your estate plan.

Make your wishes crystal clear. Legal documents are often challenged if they are not prepared by an experienced estate planning attorney or if they are vaguely worded. You want to be sure there are no ambiguities in your will or trust documents. Consider the use of “if, then” statements. For example, “If my husband predeceases me, then I leave my house to my children.”  This is especially true in contingencies, which I’ve found people typically haven’t considered.

Trusts may be more important than you think in estate planning. Trusts allow you to take assets out of your probate estate and have these assets managed by a trustee of your choice, who distributes assets directly to beneficiaries. You don’t have to have millions to benefit from a trust.  I’ve written extensively about the benefits of trusts, so you can find several articles elsewhere on that topic.

List your debts. This is not as much fun as listing assets, but still important for your executor and heirs. Mortgage payments, car payments, credit cards and personal loans are to be paid first out of estate accounts before funds can be distributed to beneficiaries. Having this information will make your executor’s tasks easier.

Plan for digital assets. If you want your social media accounts to be deleted or emails available to a designated person after you die, you’ll need to start with a list of the accounts, usernames, passwords, whether the platform allows you to designate another person to have access to your accounts and how you want your digital assets handled after death. This plan should be in place in case of incapacity as well.

Plan for Incapacity.  All too often, clients only think of estate planning in the context of their passing.  That is of course part of it, but sometimes it is even more critical to consider incapacity.  What happens with your assets if your health doesn’t permit you to handle your own finances?  Who would speak for you?  Do you want them to do whatever they want, or do you want to give them direction?  This is extremely important as it directly affects your well-being as this person will pay for your daily needs and medical expenses.

Plan for Long Term Care. The Department of Health and Human Services estimates that about 70% of Americans will need some type of long-term care during their lifetimes. Some options are private LTC insurance, government programs and self-funding.

The more planning done in advance, the more likely your loved ones will know what to do if you become incapacitated and know what you wanted when you die.

Resource: Maryland Reporter (Sep. 27, 2022) “Estate Planning 101: 10 Tips for Success”

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