PLANNING FOR MENTAL DECLINE

by Monte L. Schatz

When the topic of estate planning comes to mind, most individuals think about the distribution of their assets at death.   The increased longevity of our population requires equal attention to diminished cognitive skills caused by dementia or other diseases that affect normal cognitive functioning.

Dementia is a syndrome in which there is deterioration in memory, thinking, behavior and the ability to perform everyday activities.  An estimated 5.5 million Americans of all ages have Alzheimer’s disease.  One in 10 people age 65 and older has Alzheimer’s dementia.  The average survival time for people diagnosed with dementia is about four and a half years, new research shows. Those diagnosed before age 70 typically live for a decade or longer.  The time frame from mild cognitive decline to the onset of dementia averages seven years.   Typically, when an individual is in the moderately severe cognitive decline, assistance may be required for daily activities and management of the person’s financial affairs.

The difficulties that families encounter is determining when the person no longer can manage their own affairs or maintain his or her own physical well-being.  The ultimate question of capacity is a legal determination and in some cases a judicial determination, not a clinical finding. A clinical assessment stands as strong evidence to which the lawyer must apply judgment considering all the factors in the case at hand.  While psychologists and other health professionals may use different terms than lawyers, conceptually the clinical model of capacity has striking similarities to the legal model.

The best estate planning approach is to take proactive legal steps ahead of mental decline to assure adequate personal and financial care and to minimize unnecessary legal costs or litigation expenses.  The legal tools available to circumvent legal capacity issues include:

  • A will drafted in advance of cognitive decline to minimize heirs contesting an estate.
  • A living trust should be considered to assure proper management of assets and continuity of financial management by a trustee for the incapacitated person’s benefit.
  • A durable power of attorney for financial matters designating a trusted and financially responsible individual to manage assets upon the onset of mental incapacity.
  • A health care power of attorney or directive that provides for a designated person to make health decisions in the event of incapacity.
  • A living will that outlines, in advance, the wishes of a person who receives artificial life sustaining treatment.

Thoughtful estate planning in advance of mental decline can help avoid expensive court alternatives that can include court conservatorships or guardianships during life and/or estate litigation after the person’s death.  More importantly, well designed advanced planning minimizes the possibility of disputes among heirs that may disrupt family relationships.

© 2017 Vandenack Weaver LLC
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How Can a Lawyer Help Me With Artificial Reproduction?

A Video FAQ with Mary E. Vandenack.

The technical term is assisted reproduction, at least from a legal perspective, and a lawyer can help in a variety of ways. One thing that is really important is that each state’s laws vary on different aspects of  the assisted reproduction process.  You need to understand the state law and the state you are working in. Those laws affect such things as who the parents are. You also need to consider updating your wills and trusts to identify who your heirs are. So you might have a grandparent and one of their grandchildren is the child of assisted reproduction and you need to make decisions about including or excluding, exactly what you mean, when you refer to children and grandchildren in your trust and will documents.

© 2014 Parsonage Vandenack Williams LLC

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What Are the Important Laws Related to Artificial Reproduction?

A Video FAQ with Mary E. Vandenack.

There are a variety of laws that relate to what is actually called assisted reproduction. Most states have some version of a Uniform Parentage Act or some type of law like that. What those laws do is to specify who the father is in the case of a sperm donor and other similar issues. There are also surrogacy laws that define whether surrogacy is permitted, whether it can be paid for, and what type of things you can do in contracts. If you enter into any type of contract related to assisted reproduction, there are a variety of things to consider and each state’s laws govern those aspects.

© 2014 Parsonage Vandenack Williams LLC

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Do I Need a New Asset Protection Plan, Trust or Will If I Move to a New State?

A Video FAQ by Mary E. Vandenack.

Certain aspects of estate planning are governed by federal law and certain are governed by state law. It is important when you move from one state to another to give consideration to that state’s law. The asset protection piece of your plan would be very important as the protections provided by each state vary. The trust that you have is going to depend on the type of the trust and its purpose, but there are differences in state law and, at a minimum, you should have the trust reviewed. The same is true with your will. More importantly, you are going to want to review any powers of attorney for health care or legal powers of attorney. There are fairly significant differences in those documents from state to state. On the positive note, most states do have laws respecting documents that have been properly created in another state.

© 2014 Parsonage Vandenack Williams LLC

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Should I Have a Power of Attorney for Health Care?

A Video FAQ with Mary E. Vandenack.

In general, what a power of attorney for healthcare does is to create an agent that will be between you and the health care system at such a time that you become incapable of making your health care decisions. There are certain things you can specify in a document that don’t require an agent, but in most cases you will be well-served to have someone between you and the health care system if you are unable to make decisions for yourself.

In executing a durable power of attorney for healthcare and naming an agent, you should give careful consideration to what you would want to happen in an emergency, in the event that happens, and make sure you inform your agent of those desires.

© 2014 Parsonage Vandenack Williams LLC

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What Happens If I Die Without a Will?

A Video FAQ with Ronald K. Parsonage.

The state provides an estate plan for you if you die without a will. In other words, there is a statute called Intestate Succession which specifically provides where the assets will go. It is the state’s best guess as to who should really receive the benefits. Ordinarily, most of them pass to the children and spouse; however, if you have a need for distribution to other people, the state will not take into consideration your wishes.

Additionally, you can do intestacy by using joint titling and beneficiary designations in order to cause an estate to pass both probate-free and tax-free; however, most people do not coordinate those activities very well.

© 2014 Parsonage Vandenack Williams LLC

For more information, contact us