If you or a loved one has been diagnosed with a terminal illness or with dementia, it is important to tackle three aspects of life planning: medical decision making, financial planning and decision making and distribution of one’s worldly goods. If there is an estate plan in place, it should be reviewed for any changes that are needed. If there’s no plan in place, acting quickly to establish one is necessary while the patient has sufficient capacity to state preferences, interact with the attorney and designated representatives, and then sign the legal documents.
A person diagnosed with dementia can anticipate experiencing a decline in cognitive ability and failing physical health, perhaps for an extended period of years. Someone with a terminal illness can expect a similar situation, perhaps over a shorter period of time. Both should have an advance medical directive, comprised of a living will which defines health care preferences and a health care power of attorney naming the persons responsible for making medical decisions.
When anticipating incapacity or death, it is important to review financial arrangements for one’s care and attending to family needs. Planning will include managing the resulting medical and care expenses. A Durable Financial Power of Attorney will grant authority to a designated agent to manage one’s financial affairs after incapacity. A well-drafted power of attorney may also give the agent to power to create a revocable living trust if that becomes a good idea after the principal loses the capacity to participate in the decision making.
It is also wise to make decisions about how one’s worldly goods (“the estate” in estate planning terms) should be distributed after death. The estate of one who dies without a will is distributed according to the state’s laws of intestacy. That’s not always the way an individual would prefer. Drawing up a will or a revocable trust allows for personal decisions on where the estate should go, and under what terms.
Where no planning has been done and a person has lost legal capacity, a family member or other trusted individual can petition the Court for a guardianship/conservatorship to handle financial and health care decisions. The court can even authorize the creation of an estate plan, for example, to provide long-term care/nursing home asset protection. Guardianship is an expensive and time consuming process, and a last resort. Timely planning is a much better option.
The Alzheimers Association has an excellent pamphleton tackling legal issues after being diagnosed with the disease. The pamphlet is also useful for those with a terminal illness.
