An elderly parent’s dementia diagnosis can profoundly impact an entire family. Estate planning must balance long-term care needs with a parent’s desire to leave an inheritance to family members.
These are some essential details to consider.
Disease progression
Dementia can rob your parents of their ability to express their wishes. Therefore, it is critical to help them create or modify their estate plans while they are still able to contribute to the decision-making process.
Long-term care
A dementia diagnosis can consume your parents without a plan to fund long-term care. For many, trusts are an excellent tool to help qualify for vital government Medicaid funds that pay for long-term care while not jeopardizing their children’s inheritance.
For example, funds set aside in a pre-need trust for a parent’s funeral expenses are exempt from scrutiny on Medicaid applications. Additionally, other assets may go into separate pre-need trusts naming children as beneficiaries. Upon the parents ‘ death, these assets are payable to the beneficiaries when the trusts that hold them are revocable. Therefore, parents may qualify for Medicaid, and their children can receive an inheritance.
Decision-Making Power
Unfortunately, elderly dementia patients will eventually be incapable of making independent financial, medical and other decisions and will have to rely on someone else’s judgment. Parents and their children should discuss who will have a parent’s power of attorney or healthcare proxy as soon as possible after a dementia diagnosis to ensure the parent is comfortable with the decision and to avoid asking a judge for guardianship.
Parents who can still make decisions after a dementia diagnosis may also choose to create a living will that expresses their wishes regarding artificial life support measures.
Whatever your parent’s wishes, creating or revising their estate plan following a dementia diagnosis is essential when planning for the future.
