Estate Planning Considerations: Dementia and How It Will Impact Your Financial and Healthcare Decisions

When you make financial and healthcare decisions in your estate plan, you need to be of sound mind. This is for your protection to make sure that no one is taking advantage of you and that decisions you make on your own are properly reasoned. If you have dementia, you will lose this mental capacity. For this reason, it’s important to plan ahead when you’re healthy and to act even more urgently if you suspect dementia.

What Does Dementia Do?

You’ve probably seen extreme examples of dementia on TV where a dementia patient can’t remember their own spouse or children from one day to the next. Long before that, dementia causes problems with memory and complex reasoning. The symptoms are often hard to spot early on but get worse over time. There is nothing you can do other than to prepare while you still have your full mental abilities.

When Does Someone With Dementia Lose Legal Capacity?

There is no clear line for when dementia causes you to lose your legal capacity to make decisions on your own behalf. The general rule for having legal capacity is that you have sound mind, understand what’s going on, understand the impact of your decisions, and aren’t improperly influenced. This is a decision that a judge will make with the assistance of your doctors.

If you’re diagnosed with the early stages of dementia, it’s important to act quickly while you still have the mental capacity to make the plans you need to. Your doctor can help you and your family determine whether you still have sufficient mental capacity or it’s time for a family member to step in. Your medical records can also help prove the validity of your will or other planning documents if someone later challenges that you didn’t have adequate capacity when you signed them.

What Kind of Plans Do You Need to Make?

You need to make plans to have someone make all healthcare and financial decisions on your behalf as you’d want them to be handled. You also need to make plans for your estate and the care of your family after you’re gone. Everything should be in proper legal form both to avoid disputes between your family members and in case you, under diminished mental capacity, ask for something that isn’t in your best interests. Some of the tools you may use might include the following.

• A durable power of attorney
• Healthcare power of attorney or proxy
• Living will
• Nomination of guardian
• Will
• Trust

There is no one-size-fits-all approach, and what you should do will depend on your exact wishes and situation.

Talk to Your Attorney

Your attorney can help you put a plan in place that’s right for you and periodically review your plan to help make sure it still meets your needs. Contact us now to schedule a consultation.