Discussing a recent diagnosis of Alzheimer’s disease.
I Didn’t Think it Would Be Alzheimer’s Disease
I didn’t think it could possibly be a diagnosis of Alzheimer’s disease, I had thought it was just (pick one): depression, vitamin deficiency, reaction/side effects to medications, thyroid disease, etc. People often will mistake the signs of Alzheimer’s disease for one of many other factors that can result in similar symptoms. “I thought I was just getting older.” That unfortunately may defer going for appropriate testing to identify the actual cause of the symptoms.
Possible Symptoms of Alzheimer’s Disease
You, or your loved one affected, might become apathetic in early stages of Alzheimer’s disease. You might lose interest in social activities, hobbies, etc. The traditional “night out” might no longer be of interest. You may appear extremely bored. Memory loss is another common symptom. The progression is often nuanced or subtle. You might be able to remember events that occurred years ago, but not what you did this morning. You might not remember where they put the car keys, but in a more significant manner that merely normal aging issues. You might experience issues identifying the correct word to complete a sentence or to communicate a point. Executive tasks, like balancing a checkbook could become much more difficult or simply impossible.
Some Background on Alzheimer’s Disease
Alzheimer’s disease is a neurological disease in which brain cells die. This negatively impacts cognitive abilities. The accumulation of amyloid plaques in the brain may be a factor triggering the disease. This accumulation may begin even decades before symptoms are identifiable. This may lead to the spread of tau that eventually accompanies cognitive decline. Surprising to many people, Alzheimer’s disease is not the only cause of dementia, but it is the most common. It is estimated to account for more than 60% of dementia cases. Estimates are that more than 5 million Americans suffer with the condition, but that figure is and will continue to grow as the population continues to age. Generally, Alzheimer’s disease affects older people, e.g., those over 65. However, perhaps 10% of cases affect people that are much younger.
My Spouse (Parent, Sibling, etc.) Was Just Diagnosed What do We Do Now?
No question that much of your early efforts if a loved one was diagnosed with Alzheimer’s disease will be devoted to dealing with the emotional trauma of the diagnosis. It is life changing. It is life-shattering. You and they and others may all be in a bit of a daze while trying to absorb the news and the implications. That’s OK and it will take time. The adjustment will be different for everyone. You will also be devoting attention to interacting with medical experts to better understand the implications and what medically you can do. But there is a wide range of other steps that might be important to take, some quickly, to begin to plan for the implications of the diagnosis. The following checklist hopefully will give you and your loved ones a starting point on that journey. Keep in mind that everyone’s situation is unique (how and who you can rely on as a safety net, your financial situation, health insurance coverage, long term care coverage and options, state law, and so much more). So, be certain to talk to professional advisers in your state and tailor any steps you do take based on their guidance for your personal situation.
Background
Your circumstances are critical to identifying what type of planning steps you must take. Identifying these, and perhaps ideally documenting them in a letter or checklist, might be helpful to you, the loved one affected and certainly to any advisers you might speak to. That will avoid misunderstandings, save the cost and time of advisers having to ask the same questions, etc.
When were you diagnosed? How long ago?
Do you drive? Are you still driving? Did the physician or other medical professional make any suggestions as to when driving might be advisable to stop?
How is your current status? Do you remain aware and understanding? Do you seem to have the capabilities (in legal terms “ capacity”) to still sign legal documents? That is critical to many of the planning decisions discussed below. Also, and this is a surprise to perhaps every non-lawyer, whether or not someone has “legal capacity” to sign a contract or will is a legal decision, not a medical decision. Yes, it should be based on medical evaluations and input (so save that information provided by medical providers) but it is ultimately for an attorney to make that evaluation. So, don’t be surprised when the person’s attorney asks many questions and requests information. That is what they have to do.
Get Medical Information
A prerequisite to evaluating options for all your planning, from estate planning, Medicaid planning your residential living options, and other critical decisions, is understanding from your medical advisers (not what you read online or hear from friends) as to the current circumstances and future disease course. Most likely there are many unknowns and a wide path of possible options, but getting specifics, as best as your physicians can estimate today is essential.
Discuss openly with the diagnosed person’s doctors what they anticipate as his or her prognosis over 6 months, 1 year, 2 years, 5 years and 10 years. That will give you an idea of what to anticipate and plan for. Of course, there is no certainty to what they guesstimate, but it will be helpful.
Consider bringing a child or other family member, or friend, to that meeting to take notes as it may be a very difficult emotional meeting and getting an accurate record of it is quite important. The medical provider might request that the patient sign a HIPAA release authorizing discussions with anyone else at the meeting. It may not be necessary if the patient is present, but if it is asked for it is a relatively simple document that authorizes disclosures and communications with that person. Just read the discussion below on HIPAA releases before anyone signs one.
Consult with a Care Manager
You should consider interviewing several care manager now. Even if you do not need that type of help now, and perhaps may not for quite a while, a care management firm can provide a consultation to help you evaluate many of the options you might have. For example, a care manager can help you analyze residences/living locations and environments. They can help you evaluate stay at home versus other options may be worthwhile. Consult with a care manager after the above recommended medical appointment so that the care manager can have the above information, review in person your home’s layout and facilities, and then discuss options and perhaps make recommendations.
Other discussions with a care manager during a consultation may include whether you might need to install a chair lift in your home (e.g., from the first floor living area to the second-floor bedroom area). You should have a care manager review the physical environment and advise you as to whether or how to handle that. Do you have a spare bedroom or room that can be converted to a bedroom for a caregiver if needed in the future? Again, the care manager on a review may be able to provide insight as to those arrangements and how they may favorably or negatively compare to other housing options.
Medicaid planning
A purpose of this type of planning is to reduce the assets that nursing home and other care providers can reach. If you are going to consider this type of planning consult with an elder law attorney in the state in which you reside. The laws differ significantly from state to state, so you need a local expert. Be certain that the person you consult with devotes a substantial portion of their time to this specialty.
This probably should be done before you evaluate the residence options discussed below. The manner in which your home, if you retain it, is to be owned, may be affected by the advice the elder law attorney gives you. They may also have the knowledge to help you explore, not only the residence option, but many of the issues in this article.
Residence and Living Arrangements
It is important that the residential and living arrangements options, including living location and environment, all be reviewed. It could be important to make decisions as quickly as you are comfortable, as it may grow more difficult as the dementia progresses for diagnosed person to acclimate to a new residence. Also, if the burdens on the caregiver spouse/partner/friend increase it may grow more difficult to orchestrate a move. You might even opt to immediately begin reviewing personal belongings to identify items you might now give to your family, sell or discard, since whichever option you choose, those steps may inevitably be required. Even if you remain in your residence you might benefit from decluttering, making room for a future home health aide, stair lift, etc.
You may opt to retain your existing home. But if you do, you should consider having a professional care manager experienced with dementia challenges visit your home and provide you with recommended steps and considerations. You should explore the wide range of senior and dementia care facilities and what pros/cons they have. This is a difficult step and one many people do not wish to take, but you should at least evaluate options. Consider the possible risks and challenges if in more advanced stages of dementia the person leaves the home when the caregiver is sleeping or otherwise occupied. That could dangerous.
If you have ever thought about relocating to live near a child or other family member who might be able to help, now may be the time to have a frank discussion with that child or family member and consider whether moving makes sense. Perhaps it may be worthwhile to ascertain what steps your child or other family member might be willing and able to take to assist you and review that option with the care manager.
Here are some questions to consider:
Can you afford your home now? Will you be able to afford it in the future as the dementia progresses?
Does your current residence have sufficient space to accommodate a home health aide if that becomes necessary?
How physically safe is your current residence and how readily can it be modified to make it safer and more accommodating to the challenges your physician indicated are likely?
What have your physicians indicated the likely progression of the dementia will be and what type of care may be needed and when? Is it feasible to provide that care in your existing residence?
What did an elder law attorney recommend (see below) from a planning perspective?
Inventory Every Assets You Have
You need to take an inventory of every asset you have. For many people that will be essential to evaluate what you care you can afford and what planning actions might be advisable. If you are fortunate enough to have sufficient wealth to cover anticipated expenses, that inventory is still essential in order to take planning steps now. You should review how each and every asset is owned (titled). If assets are in the diagnosed person’s name, at some point in the future he or she will not have the capacity to act on those assets. That could leave you in a difficult position of having to rely on a power of attorney (a legal document in which the person diagnosed with dementia names an agent to handle matters, as explained below). But powers of attorney may prove to be inadequate. Even if the form is “prefect” a bank or other third party may make the agent jump through costly and time-consuming hoops to use it. If you either don’t have a power of attorney or it doesn’t adequately authorize powers to deal with a particular matter then you might then need a guardianship. That is where a court appoints a person it approves to make decisions for you. That is a costly, time-consuming process, and one you should endeavor to avoid. Even if that is unlikely, a review now when it should be easy and inexpensive for the person diagnosed to change title to appropriate assets to, for example, his or her revocable trust, or perhaps to a spouse, might be advisable.
To do this properly, the actual ownership and beneficiary designations on each account should be carefully reviewed. Ideally this review should be done with an estate planning or elder law attorney and your wealth adviser. Each asset might have different considerations. For example, you cannot transfer retirement (qualified plan) assets to a revocable trust as that may trigger immediate income tax implications. Annuities may also present an issue, as the contract document for a particular annuity might restrict transfer, and should not be transferred or changed unless you have a specialist review the underlying annuity contract.
For your house, if it is owned jointly (tenants by the entirety, as between spouses) there may be potential asset protection benefits for the house if owned by both spouses. There may also be benefits of retaining the house in its current ownership to obtain a basis step up under the Gallenstein case. Gallenstein v. U.S., 975 F.2d 286 (1992). If the home was purchased solely with earnings from one spouse who provided all of the funds for the purchase it may be arguable that there should be a full basis step up on that spouse’s death. This may only be relevant if you retain the home, and the gain is more than the $500,000 exclusion you are otherwise entitled to. The point is a lot of this stuff is complicated, can have significant legal, tax or other implications, and if you have sufficient wealth to face these issues, you want to have the guidance of professional advisers to navigate your planning.
If you are married, you might transfer the home ½ to each spouse’s revocable trust. That may undermine the tenants by the entirety protection (that will vary depending on state law) and a possible Gallenstein argument if either are relevant. However, if the home is in one or both revocable trusts (see discussion below) then it may be easier for the well spouse as trustee to act if you wish to sell the home at a future date. Note that if you simply retain the home as it may be currently owned jointly, the well spouse (or joint owner) may be able to act on the home (e.g., sign documentation to improve, finance, or sell it) using a power of attorney. So, it may not be required or beneficial to bother changing title. However, it may prove advantageous and easier if you do.
Bank, brokerage and other accounts should be reviewed. If there are accounts solely in the name of the person diagnosed with dementia, it may be easier to transfer those to his or her revocable trust now while he or she is able to do so. In that way, in the future, the successor trustees will be in a better position to act on those accounts more easily. If you do make such a transfer consider the impact of any beneficiary designations, pay on death account formats, etc.
Automobiles, motorcycles, boats, anything that is registered, can raise complications in the future when the person no longer has the legal capacity to act to change title, e.g., to refinance or sell the item. Transferring title to a car at the department of motor vehicles might prove daunting. If the person diagnosed with dementia has or obtains a durable power of attorney that legally may authorize the agent to make such transfers, but that may prove exceedingly difficult and time consuming to accomplish for the agent. So, you may want to make any needed changes now while diagnosed person can sign documents.
If the person diagnosed with dementia can already no longer drive, you might consider selling any vehicles. That may be difficult emotionally as it shows that the option of driving is gone forever. If instead you wish to gift the car to charity or a child, you should consider the possible benefits of making those arrangements now.
Review your insurance coverage to be sure you have adequate liability coverage especially if someone diagnosed with dementia is still driving. In other situations, a well family member or partner may need to take precautions to secure the car keys. Discuss this with a care manager.
Other assets may have unique considerations. We had suggested that you provide us a current very detailed balance sheet and the first page of any statements concerning any assets so that we can help you evaluate each asset. This should all be coordinated by your financial adviser.
Long Term Care Insurance
If you have coverage in place that is wonderful, but now it is time to figure out what that coverage does. Too often when people purchase long term care coverage they focus, understandably, on the costs involved. Now that you or your loved one has been diagnosed with dementia, understanding what coverage is actually provided, in detail, is of paramount importance. Consult with an expert in the area to advise you as to the coverage, policy, carrier, etc. Be cautious as many general advisers (e.g., many attorneys or CPAs) may not have the expertise. Your financial adviser might. You should contact the as ask if they have the expertise to review the policy. You might contact the agent or firm that sold you the coverage to see if they can meet and review in detail what the policy provisions include.
Now, you may also want to precisely understand any obligations you have under the policies as to future payments (you want to be certain not to miss payments and risk jeopardizing the policies) or reporting obligations. Is there any requirement to inform the carrier of health conditions or other matters? If there are, you want to be certain to meet them.
You should also understand specifically what the policy will, and will not, cover. For example, what costs of in-home health assistance or home modifications are covered? Will any portion of the costs of different senior care living facility arrangements be covered? These answers will be vital to many other decisions you need to make. Just to emphasize what is hopefully obvious at this point, many of the decisions you make are interconnected so you may have to gather information on all the many different matters you want to consider so that you can make a holistic decision that gives some consideration to all the interconnected factors.
The above information may be important to the decisions you make concerning your residence and living arrangements. Also, if certain costs are covered, how they are planned and implemented might be influenced by the requirements of your long-term care policy. For example, certain types of costs may be covered and others not. So, if there are alternatives on how you arrange home health assistance in the future, you might be best to try to do so in a manner that has the greater likelihood of coverage under your policy.
Form a Team
Form a collaborative advisor team. This can both help well spouse/partner or other caregiver with the myriad of tasks he or she has and will undertake in the future. It can also help provide checks and balances to protect both of you, having a collaborative team of advisers may help. To foster this, as we discussed previously, you should direct and authorize each of your advisers to communicate with the others: CPA, wealth adviser, attorney, insurance consultant, care manger, etc. Don’t assume that each adviser will tell you when they feel they need input from another adviser. Some, perhaps many, advisers just don’t collaborate unless pushed to do so. Some may just not be used to working in that manner. Others may be a bit over-confident about the breadth and depth of their skills. Some don’t like competition or anyone looking over their shoulder. But you want everyone looking over everyone else’s shoulder, so you are best protected and get the informed advise of every adviser.
Estate Planning Documents
You need to reconsider all of your estate planning documents. If you are missing a key document get it now. If your documents are outdated (as a guess assume unless your lawyer tells you otherwise that anything 5 years or older should be revised). If your documents don’t reflect your current circumstances (and hint they probably don’t reflect the recent diagnosis of Alzheimer’s disease or other dementia), you should revise them. The obvious point is that you need the protections proper legal documents provide more than ever in light of your diagnosis. You also may have the clock working against you. If you defer to long before signing new documentation your mental capacity may weaken from the progression of dementia and you may not be able to sign documents.
Will: There are two aspects to this, the will in which the person is named to serve or receive benefit, and the documents of the person recently diagnosed with dementia.
If the person diagnosed with dementia is the first named sole executor for the well spouse (or other people) their serving in that role may be inadvisable following a diagnosis of dementia. You might consider now or at some point in the not-too-distant future having the person diagnosed with dementia resigning from that role (or updating your documents naming different people). If the person diagnosed with dementia doesn’t resign proactively, he or she would have to be removed under the disability provision in the future, or by a trust protector if the document permits that, and that would likely be more costly and complex to make happen.
As to the person recently diagnosed with Alzheimer’s disease, they should review their will (and other documents as discussed below) and ascertain whether they would like to change anything. This may be the proverbial “last bite at the apple.” This also presumes that at the present time they have sufficient cognitive abilities and memory retention to be deemed to “have capacity” to sign these documents.
Revocable Trust: Revocable trusts are a common document/mechanism used to avoid probate, but their real benefit often is in protecting those with aging and health issues, like the recent diagnosis of dementia. Revocable trusts can provide additional protections by naming a co-trustee to assist someone in early stages of dementia. It can provide a succession of co-trustees for when the person creating the trust can no longer serve as a trustee as the dementia progresses. A trust protector can be named to serve as a check and balance on the trustees. This person can be given the power to fire and replace trustees, change the law governing the trust, demand an accounting from the trustees, etc. Given the diagnosis of dementia, especially if your safety net is limited, the trust could mandate that annually (or more frequently) and independent care manager must interview the person diagnosed with dementia and issue a written report to the trustees, trust protector and even certain family members. That can provide another important check and balance to assure that proper care is being given.
If you already have a revocable trust, and you are the current and sole trustee you might consider at some point resigning or appointing a co-trustee. If you don’t resign proactively while you have the legal capacity to do so, you may at a later date have to be removed under the disability provision and that could be more costly and complex to make happen.
Following your diagnosis, review carefully who current and successor trustees. For example, if you are married a common approach might be for you to be the sole trustee, then your spouse, followed by the children jointly. Might you want to make a change to that? Whatever your family structure and whoever you have named, a diagnosis of dementia is a critical change that warrants reviewing all appointments. It may also be advisable to have a substantive discussion with anyone named to be certain that they understand their roles and are able and willing to fulfil that roles. Now, with a diagnosis of dementia, the prospect of serving as a successor trustee is very real.
You should also use this opportunity to review all the dispositive and other provisions of your revocable trust to be certain they are what you want. This may be last time you are able to revisit and revise these provisions. If your revocable trust doesn’t include all of the safeguards noted above, you might wish to revise it to incorporate some or all of those safeguards.
Power of attorney: Be certain that you have a power of attorney in place and that it is “durable.” That means that the document will remain valid even if you become disabled. Now that that you have a diagnosis of dementia that assures disability you want to be certain that this is properly done. What is required to make a power of attorney “durable” varies by state law. It may be as simple as including a statement “this power of attorney shall remain effective regardless of principal’s subsequent disability.” But since the rules vary and this is so crucial, be sure to speak to an estate planning attorney in your state to get it right. Also, some people may ponder why a power of attorney is even relevant if you have a revocable trust. That is a good question to ask and understand. You should always have a power of attorney because no matter how carefully you try to retitle assets into a revocable trust there are always assets or matters (e.g., a future lawsuit) that cannot be retitled to your trust. So, yes the power of attorney should be less important, but it may prove invaluable no matter what.
As with all documents evaluate all aspects of your power of attorney to be as certain as you can it reflects your wishes, and the reality of your diagnosis.
But you need to consider more. Have you been named agent under a spouse, partner or other family members power of attorney? If so, in light of your diagnosis you might want to resign from those positions (as well as from being an executor or successor trustee on family members documents). Your signing a resignation (read the terms of the document so you adhere to the terms of the document as to requirements to resign) may prove much simpler and less costly than having to be removed in the future.
Health proxy and HIPAA release: A Health Care Proxy is also known as a medical power of attorney, is a document in which you name a person, called agent, and empower them to make medical decisions if you cannot do so. A HIPAA Release is a Health Insurance Portability and Accountability Act release that permits you to designate a person to have access to medical records and to communicate to medical personal. With your recent diagnosis you should be certain you have both documents in place and that they reflect your wishes. Review all of the personal medical statements in your documents to assure that you are comfortable with prior decisions in light of your recent diagnosis.
There is a caution you should consider concerning HIPAA releases. The person diagnosed with dementia, while they are able, may be asked by various sources, not just medical personnel, to sign a form HIPAA release. Insurance companies may require this. Health insurance companies might request it, etc. Just be careful to have someone read the entirety of the document. Many HIPAA releases are quite reasonable and provide for what you would expect, authorization for a physician, insurance company or other person to communicate with the person you name (called your “agent”). However, some are incredibly and inappropriately overly broad to the point of being invasive. Some authorize the person requesting them, e.g., an insurance carrier, to have the right to access a wide range of personal information well beyond what there actual need is. Just because someone hands you a “standard form” doesn’t mean you have to sign it the way it is. If it is invasively overreaching as the company providing it to reduce its scope before you sign it.
If you have received a diagnosis of dementia you might opt to resign as agent under any health care proxies or HIPAA releases for loved ones to avoid the complications of having to be removed in the future
Living will: This is a document in which you specify you end of life and other medical and health care wishes. This may include the desire for palliative care, whether or not you would wish heroic measures would be taken, whether you would want experimental medical treatments, and so forth. Now that you have been diagnosed with dementia these decisions are very real and important for you to make carefully. Review the personal medical statements in your document to assure that you are comfortable with prior decisions in light of the recent diagnosis. Ideally you should also discuss these decisions with a care manager and your physician to be certain that you have addressed medical decision making they feel relevant to your situation. Although these are legal documents created by your attorney, get medical input. If you have any religious convictions be certain to review the proposed final document with your religious advisers to be certain that the document reflects your religious wishes, and doesn’t violate your religious beliefs.
What if my Parent (other Person) Already Lacks Capacity to Sign Legal Documents?
If the person diagnosed with dementia does not have proper legal documents, or those documents are outdated, but they no longer have capacity to sign new documents, then whoever is helping them will have to work with what they have. It may be possible to improve even irrevocable documents after the person creating them no longer has sufficient legal capacity (cognitive abilities) to sign new documents. For example, an agent under a power of attorney, or a successor trustee under a revocable trust may be able to take steps to confirm that they can act. They may be able to effect some changes the person diagnosed with Alzheimer’s disease no longer can do. Some trusts have trust protectors who are given varying authority to modify a trust document. It may be feasible for the trustees of certain trusts to merge or decant them into new trusts, or modify them by having all those affected join in a non-judicial modification (i.e., a modification affected by the agreement of all the parties without court involvement).
If no better options exist, you might have to commence a guardianship proceeding to have a court appoint a guardian and approve a plan. It may even be feasible with a guardianship proceeding to have a tax plan confirmed by the court so that it can be implemented. This may become a common issue as the end of 2025 approaches. In 2026 the estate and generation skipping transfer (“GST”) tax exemptions are scheduled to drop by half. So many people of wealth will benefit their loved ones (the persons they wish to benefit) by doing tax planning in advance of that date. For anyone lacking capacity going into 2025 it may be advisable to commence such proceedings in 2024 or as early as possible in 2025 as it may take time to get court approval and the planning will have to be completed by end of 2025 to preserve the exemption.
Conclusion
Getting a diagnosis of Alzheimer’s or another form of dementia is tough on you and tough on your loved ones. However difficult it may be to address legal, financial and other non-medical decisions while you are coping with many complex and tough medical decisions, it can be vitally important to address these matters as soon as possible to protect yourself and your loved ones.
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