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How to Protect Your Spouse or Loved One when Diagnosis is Dementia

March 18, 2024 • | Curran Estate & Elder Law, PLLC
I have been diagnosed with brain damage and dementia. Word to the younger folks: I woke up last year and suddenly could not spell or write legibly. No warning. No symptoms.

Few illnesses are as terrifying as dementia, for which there is no cure. If estate planning is in place, it may need to be adjusted to address new, more imminent issues. Reviewing the family situation from a legal and financial aspect is critical, and there is no time for delay, explains a recent article from Morningstar, “’I don’t want my wife to lose everything’: I’ve been diagnosed with dementia –I suddenly could not spell or write legibly.”

Whether you are the individual who received the diagnosis or the spouse, there are a number of steps to be taken to smooth the path ahead. First is to update your Will, your Financial Power of Attorney, your Healthcare Power of Attorney, and your Living Will/Advanced Healthcare Directive.  Do not try to do this without the help of an experienced elder law attorney.

This may also be the time to reassess your investment portfolio based on your new financial plan and risk tolerance.  It is very important that the healthy spouse has in place an updated Will to ensure that the assets he/she wants to leave for the unhealthy spouse will not go to that spouse outright; thus, potentially making him/her ineligible for Medicaid if the healthy spouse passes first.  There are techniques to protect this from happening.

The aforementioned Powers of Attorney and Living Will of the unhealthy individual should be looked at to ensure that they meet the requirements going forward, as this could be the last opportunity that someone with dementia has the capacity to sign documents.  The same documents for the healthy spouse or loved one should be revised, as it is most likely time to remove the unhealthy individual of any decision-making on your behalf.

Share your situation with trusted family and friends to create a team -–a community of people who can provide support, part of which will be updating beneficiaries. Now would also be the time to record instructions for access to devices, documents, and even daily habits.  Part of your team could be the folks at Curran Estate & Elder Law, a life care planning law firm in Berks County, Pennsylvania.  We have a care coordinator on staff to assist loved ones dealing with the maze that has presented itself in the form of dementia.

An elder law attorney and financial advisor will help you take an accounting for assets, expenses, and projected long-term care costs. You’ll want a team approach to provide as much guidance as possible.  The elder law attorney can assist with the preservation of assets at such time as the unhealthy individual may need skilled nursing and can help the unhealthy individual qualify for Medicaid, while preserving assets for the healthy spouse or other heirs.

Long-term care insurance will help with expenses and should serve as an example for anyone reading this article. Policies should be purchased early in life when they are relatively affordable to help alleviate the financial burden of nursing home costs.

When to put your long-term care policies into payout status is a difficult decision. You’ll need to time this with a Medicaid plan, with which your elder law attorney will be able to help.

Now may also be the time to create a Trust and divest assets to make it through the five-year Medicaid look-back.

There are exceptions to the five-year look-back rule for Medicaid eligibility. They include paying off debts, buying medical devices, or making home improvements to improve accessibility. However, eligibility depends upon income and other assets.

Some states, including Pennsylvania, Florida and New York, have rules exempting homes from assets calculated by Medicaid under certain circumstances. California eliminated an asset limit this year, making a person’s home automatically safe from Medicaid while they are living, but this does not mean the homes are exempt from the Medicaid Estate Recovery Program.

Working with a team of professionals, including an elder law planning attorney, and having the support of family and trusted friends will be important as time goes by and the disease progresses.

Reference: Morningstar (Feb. 25, 2024) “’I don’t want my wife to lose everything’: I’ve been diagnosed with dementia –I suddenly could not spell or write legibly”

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