Wills and Trusts

Can Somebody with Dementia or Alzheimer’s Make a Will?

Yes, but there may be a point where this becomes impossible.

Families often face a difficult situation when they receive a Alzheimer’s or dementia diagnosis.  Often, the signs preceded the diagnosis.  Whether an individual is dealing with a suspicion or “official” diagnosis, there may still be an opportunity to create an estate plan.   In fact, there is a great need to do so.

Good News, Estate Planning is Possible

Everybody over the age of 18, even those with a disease affecting their brain, is presumed to be competent to create a will.   This means that they have “testamentary capacity”.  Even if somebody has been determined by a court to be incompetent, there may be times when the person may have lucid intervals when he knows the extent of his estate and who should receive the inheritance.

Nature of Dementia, Windows of Opportunity

Most of us who have been around suffers of dementia realize that it is not an all or nothing condition.  For example, the term “sundowners” unsplash-windowrefers to the worsening of dementia in the late afternoon or evening.  At those time, individuals may hallucinate, become agitated or paranoid.  See http://sundownerfacts.com/symptoms/  Strangely, for some of these people the conditions disappear or lessen the next morning.

Generally, dementia such as Alzheimer’s is progressive.  However, the rate that it progresses varies.  According to Alz.org.[i]

The symptoms of Alzheimer’s disease worsen over time, although the rate at which the disease progresses varies. On average, a person with Alzheimer’s lives four to eight years after diagnosis, but can live as long as 20 years, depending on other factors.

From a planning perspective, it is best to draft and sign essential estate and asset planning documents early.  These may include:

  • Powers of Attorney

  • Wills

  • TrustA photo by Sonja Langford. unsplash.com/photos/eIkbSc3SDtI

  • Advanced Healthcare Directives (Living Wills)

  • HIPAA Releases

Concerns about Long Term Care

In addition, this is an ideal time to make plans for governmental programs that can help pay for care.  For example, Medicare does not pay for long-term care in a facility.  However, Medicaid can be an option to explore.  Also, veterans, their spouses and widows can be eligible for certain pensions such as the VA Wartime Pension also know as Aid and Attendance.  However, both Medicaid and certain VA benefits are needs based.  This means that those with too much income and or too much in net worth may not be eligible for these programs.  However, individuals can become eligible without losing their life savings.

In short, when a diagnosis occurs, it is a good idea to consult with an elder law attorney who has knowledge about the disease, the needs of the family and how to navigate through the Medicaid and VA eligibility requirements.  However, failure to take advantage of the opportunity to plan may result in the need of guardianship or other court administered processes.

[i] http://www.alz.org/alzheimers_disease_stages_of_alzheimers.asp

A Child’s Husband or Wife if Often a Concern During Estate Planning

Let’s face it, not everyone is crazy about their in-laws.  Whether it is greed, money problems, maturity, substance abuse or a possible divorce; these things create concerns when deciding how to pass along an inheritance.

How is an Inheritance Treated During Divorce?  In Oklahoma.

Theoretically, things or money your kid inherits is their separate property.  However, this can change if assets are co-mingled.  One example is an inheritance deposited into a joint account.  Transmutation is the act of changing separate property into joint property by gift, use or titling.  In a divorce setting these assets should not be included in a property division.  In reality, the ownership often becomes blurred when the other spouse gains title, has access or helps maintain the property.

Manipulative, Demanding, or Stealing In-Laws

Sometime the worry is not divorce but a continued marriage with a spouse who’s need for resources never runs dry.  In these situations a Trustee can prevent wasting of an inheritance.

 Lifetime Trusts:

A Trust splits the legal and beneficial ownership from property.  The Trustee is the person or company that holds title.  However, the Trustee can only use the property for the beneficiary.

Example 1:  The Smith Trust purchases a home for the benefit of Sally.  Sally lives in the home but her name is not on the title to the property.  If Sally’s is legally unable to sell, mortgage or give it to anybody else because only the Trustee has this power.  Sally’s husband cannot force her to do anything with regard to that asset.  The Trustee can sell the property if Sally’s needs change.

Example 2:  The Smiths want leave money to their son.  His demanding wife had credit, gambling, and/or alcohol problems.  The funds a placed in Trust so that the Trustee can manage the money.  The Trustee has sole discretion on how and when money is released for son’s benefit.

In both examples the assets in the Trust are not available to the divorcing spouse.  This is because the assets are not “owned” but the child.

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