Estate Planning for Alzheimer’s
I was recently reminded that incapacity is something that can happen at any age.
Someone I know was diagnosed with early onset of Alzheimer’s disease at just 47 years of age. A new client has also been diagnosed with early onset of Alzheimer’s.
Most people mistakenly assume that Alzheimer’s only afflicts the elderly; however, according to the Alzheimer’s Association, of the more than 5 million American’s suffering with Alzheimer’s, approximately 5 percent develop the disease early, in their thirties, forties or fifties.
Alzheimer’s is a progressive condition that gradually disrupts memory and thinking and eventually leads to nerve death and tissue loss in the brain. There is no cure for Alzheimer’s yet, although there seems to be promising research:
- A new drug called aducanumab, has been shown to reduce buildup of amyloid plaque in the brain of Alzheimer’s patients, slowing cognitive decline;
- An experimental ultrasound treatment on mice also eliminated the amyloid plaque buildup, slowing cognitive decline;
- A commonly used diabetes drug called Liraglutide has been shown to prevent brain cell degeneration; and
- Research focusing on the role of tau protein as a driver of Alzheimer’s disease is underway, which could lead to improved treatment
Until a cure is found, those diagnosed with Alzheimer’s or other conditions that will result in physical and mental decline need to plan for their incapacity while they are still able to make important, well-informed decisions about their testamentary, financial, and health care wishes.
If you have been diagnosed with a serious illness that could result in your long-term incapacity, make it a priority to meet with an attorney as soon as possible to discuss the following documents.
Revocable Trust and Pourover Will
Although a durable power of attorney will typically allow your agent to manage your financial affairs, trusts are more readily accepted at some banks and financial institutions. Texas does not have a statute that requires a financial institution to accept a power of attorney, so some financial institutions may refuse to accept them, especially if the durable power of attorney is several years old. Those serving as trustee of a revocable trust, however, will likely not face the difficulties that an agent acting under a power of attorney may encounter.
You should also have a pour-over will, even though your trust will specify how your assets will be distributed when you die. The pour-over will directs that certain assets that may have beeninadvertently left out of the trust will be poured into the trust upon your death and distributed according to the terms of the trust.
Durable Power of Attorney
The fact that banks and financial institutions may sometimes refuse to accept them does not mean that you should not have a well-drafted durable power of attorney in place. A durable power of attorney may give your agent the authority to do many important things, such as transfer assets into your trust that may have been inadvertently left out, or amend your trust to take advantage of certain estate planning strategies or to avoid certain estate planning mistakes.
To minimize the risk that it will not be accepted, it’s best that the power of attorney be drafted to go into effect immediately as opposed to in your incapacity. Third parties are often more reluctant to accept powers of attorney that spring into effect upon the principal’s incapacity because they are often concerned that the triggering event has actually happened.
For more information, read: To Spring or Not to Spring a Durable Power of Attorney.
Medical Power of Attorney
You can designate someone you trust to make medical decisions for you with a medical power of attorney. The person you designate is called an agent. The agent is given broad authority to make any health care decisions for you if you become unconscious or mentally incapable of making those decisions for yourself.
To read more about the requirements of a medical power of attorney in Texas, read: What is a Medical Power of Attorney?
If you’ve tried to obtain medical information about a spouse or an adult child before, you have probably been informed that because of privacy regulations, the medical facility will not share information about a patient with anyone but the patient or an authorized representative.
The Health Insurance Portability and Accountability Act (HIPAA), regulates the use and disclosure of protected health information concerning a patient. Any health care provider or insurance company that uses computers in their normal course of business is subject to the law. Entities that violate HIPAA rules are subject to civil fines, as well as criminal penalties with possible jail time, which makes them extremely cautious about sharing medical information with anyone but the patient, even close family members such as spouses and children.
If you want your spouse, another family member, or close friend to be able to talk to doctors or insurance companies on your behalf, you need to sign a HIPAA authorization. A HIPAA authorization allows you to name an individual who can have access to your medical information so that your health care provider or insurance company have no reservations about sharing your protected medical information with them.
Directive to Physicians
A Living Will, also known as a Directive to Physicians, is a document that allows you to instruct your physicians to administer, withdraw or withhold artificial, life-sustaining treatment in the event you are diagnosed with a terminal or irreversible condition and are unable to make your own health care decisions.
It puts you in control of whether you want doctors to withhold all treatment other than those required to keep you comfortable, or in the alternative, whether you would like to be kept alive in your condition using available life-sustaining treatment.
The goal with all these documents is to make sure people you trust are in place to carry out your wishes without a court proceeding. If these documents are not in place and you become incapacitated, a guardianship proceeding may be necessary to give someone the authority to act on your behalf.
With these estate planning documents in place, all these matters can remain private and handled out of court. But it is important that you sign the documents while you still have the capacity to understand the documents you are signing and the ramifications of signing them.
Once you become incapacitated, it is generally too late.