DEMENTIA
February 18, 2017

Approximately 47 million people have dementia worldwide, over 20 percent of whom reside in the United States. Dementia, of which there are over 100 types, including, but not limited to, Alzheimer’s disease. However, Alzheimer's is the most common type of dementia, destroying brain cells and causing confusion, anger, mood swings, language breakdown and long-term memory loss. The Alzheimer’s Association provides 10 warning signs of Alzheimer’s disease:

  1. Memory loss that disrupts daily life;
  2. Challenges in planning or solving problems;
  3. Difficulty completing familiar tasks;
  4. Confusion with time or place;
  5. Trouble understanding visual images and spatial relationships;
  6. New problems with words in speaking or writing;
  7. Misplacing things and losing the ability to retrace steps;
  8. Decreased or poor judgment;
  9. Withdrawal from work or social activities; and
  10. Changes in mood and personality.

The average per-person cost of care for an individual with dementia is estimated to be tens of thousands of dollars each year. New Yorkers requiring nursing homes or other specialized care may incur annual costs in excess of $200,000. The financial challenges to provide care and a safe environment for an individual with dementia can result in serious financial hardship and possible impoverishment for the individual and his or her family. It is critically important for individuals of all ages, in particular older adults, to implement a plan to ensure that their financial needs of their family and loved ones, are protected in the event the individual can no longer handle his or her affairs.

This is why It is especially important to have a legal plan for a person with Alzheimer's disease. The sooner planning starts, the more the person with dementia may be able to participate and contribute to the plan.

For individuals who start exhibiting early signs of dementia it is also very critical to take care of their estate planning affairs, as they might not have a necessary capacity to execute certain documents, as dementia progresses.

For instance, the threshold for establishing testamentary capacity in order to execute the Last Will and Testament is extraordinarily low. It is less than what is required to sign a Power of Attorney or conduct any other legal transaction. The test for the capacity is:

  1. The Testator must understand the nature and consequences of making a Will.
  2. The Testator must know the nature and extent of his or her property.
  3. The Testator must know the natural objects of his or her bounty and relations with them.

Very often elderly people, in their attempt to solve the problem without resorting to legal help, hold joint bank accounts with another individual, and each person has full access to the account with the right of survivorship in the proceeds of the account. This solution is usually not recommended by attorneys for many reasons which include exposing assets to the creditors of the other individual, including their spouses, and uneven distribution between kids, if one of the kids is on the bank account is meant as a care taker only. You can visit our website at www.bzlawgoup.com to read more on this topic.  A better solution is to hold Joint Bank Account for Convenience Only. The owner of this type of account adds another individual’s name to the account for purposes of convenience only, i.e., check writing, bill paying, transfers, and withdrawals.

Additionally, the following main instruments are recommended by Elder Law Attorneys and used for elder planning:

  • Powers of Attorney. An individual can create a power of attorney for financial and estate planning thereby appointing an agent to manage the individual’s financial affairs without court intervention
  • Wills and Trusts. These documents are used to protect and preserve and distribute property during lifetimes or at death. Elder law attorneys often recommend Trusts to their clients, whether revocable or irrevocable. An irrevocable Trust will provide for the asset protection after a period of time, while revocable Trust is a great mechanism to avoid probate process.
  • A Health Care Proxy allows an individual, the principal, to appoint another individual, the agent, to make health care decisions on his or her behalf in the event that he or she is unable to do so.

While clients are typically apprehensive about signing documents, and giving control to others, it is important to remind them that without such documents in place the alternative is a time-consuming and costly court proceeding as set forth in Article 81 of the Mental Hygiene Law. Most important, the client may not have the ability to select his or her guardian. 

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