Early and ongoing legal and financial planning and review are critical for families impacted by Alzheimer’s disease and other forms of dementia. Unfortunately, many families are not prepared to manage the legal and financial impacts of an Alzheimer’s or dementia diagnosis. Medical, legal, and financial experts encourage seniors recently diagnosed with Alzheimer’s, dementia, or another serious illness that causes decline in mental and physical health to establish, review, and update advance directives as early as possible. The sooner legal and financial plans are put in place, the more likely the person diagnosed with Alzheimer’s or dementia will be able to participate in the planning process.
“Making legal plans in advance is important for several reasons,” according to the Alzheimer’s Association. “Early planning allows the person with dementia to be involved and express his or her wishes for future care and decisions. This eliminates guesswork for families, and allows for the person with dementia to designate decision makers on his or her behalf. Early planning also allows time to work through the complex legal and financial issues that are involved in long-term care.”
It’s critical that a person has legal capacity to make important decisions. The Alzheimer’s Association defines legal capacity as the “ability to understand and appreciate the consequences of one's actions and to make rational decisions. In most cases, if a person with dementia is able to understand the meaning and importance of a given legal document, he or she likely has the legal capacity to execute (to carry out by signing) it.”
Legal and financial advance directives including wills, living trusts, and a durable power of attorney for finances help to ensure that a person’s desired legal, financial, and health care plans are followed. The National Institute on Aging provides a brief overview of each document:
- Wills indicate how a person’s assets and estate will be distributed among beneficiaries after his or her death. Wills can specify: an arrangement for care of minors, gifts, trusts to manage the estate, and funeral/burial plans.
- Living trusts give a designated person (trustee) the authority to hold and distribute property and funds.
- Durable power of attorney for finances gives a designated person the authority to make legal and financial decisions on behalf of another person.
Important medical decisions can be documented through a living will, durable power of attorney for health care, and do not resuscitate order. The National Institute on Aging provides a brief overview of each document:
- Living will describes and instructs how the person wants end-of-life health care managed.
- Durable power of attorney for health care gives a designated person the authority to make healthcare decisions on behalf of another person.
- Do not resuscitate orders instruct healthcare professionals not to perform CPR in the case of a stopped heart or stopped breathing.
Elder law attorneys and geriatric care managers can help provide families with referrals, resources, and advice for navigating legal, financial, and health care planning options.
Are your family’s legal and financial affairs in order? Use this checklist, provided by the National Institute on Aging, to ensure that your family’s arrangements are in order before a serious illness or health care crisis occurs:
- Start discussions early with your loved ones and aging parents while everyone can still help make decisions.
- Create documents that communicate legal, financial management, health care, and end-of-life wishes for yourself and your senior parent.
- Review your plans regularly, and update documents as circumstances change.
- Put important documents in one place. Ensure that a trusted family members knows the location of the documents, and perhaps has copies. Also make copies of health care directives and place these copies in all medical files.
- Give permission in advance for a doctor or lawyer to speak directly with a family member or trusted caregiver.
- Reduce stress and anxiety about funeral and burial arrangements by planning ahead.
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