Financial and Legal Planning for Caregivers

Putting financial and legal plans in place now allows the person with dementia to express wishes for future care and decisions. It also allows time to work through the complex issues involved in long-term care

Planning Ahead for Legal Matters

While it’s important for everyone to plan for the future, legal plans are especially vital for a person diagnosed with dementia. The sooner these plans are put in place, the more likely it is that the person living with dementia will be able to participate in
the process.

Why plan ahead?

Making legal plans in advance is important for several reasons: Early planning allows the person with dementia to be involved and express his or her wishes for future care and decisions. This eliminates guesswork for families, and allows for the person with dementia to designate decision makers on his or her behalf. Early planning also allows time to work through the complex legal and financial issues that are involved in long-term care.

Legal planning should include:

Preparing for long-term care and health care needs.
Making arrangements for finances and property.
Naming another person to make decisions on behalf of the person with dementia.

Legal capacity is the ability to understand and appreciate the consequences of one’s actions and to make rational decisions. In most cases, if a person with dementia is able to understand the meaning and importance of a given legal document, he or she likely has the legal capacity to execute (to carry out by signing) it.

As long as the person has legal capacity, he or she should take part in legal planning. A lawyer can help determine what level of legal capacity is required for a particular document, as it can vary from one type of document to another.

Before a person with dementia signs a legal document:

Discuss the document. Make sure that the person understands the document, the consequences of signing it and what he or she is being asked to do.
Ask for medical advice. If you have concerns about the person’s ability to understand, a doctor will be able to help determine the level of his or her mental capacity.
Assess existing legal documents. Even if a living will, trust and power of attorney were completed in the past, it’s important to review these documents for any changes and update as necessary.

Need additional information about “Managing Someone Else’s Money?” Download the Consumer Financial Protection Bureau’s free, four-part guide.

Help for Powers of Attorney (PDF)
Help for Court-Appointed Guardians (PDF)
Help for Trustees (PDF)
Help for Representative Payees and VA Fiduciaries (PDF)

Meeting with a lawyer

You can complete certain legal documents without a lawyer, but getting legal advice and services from an attorney who specializes in elder law can be especially helpful.

If you already have a lawyer, he or she may be able to refer you to an attorney that specializes in elder law. Otherwise, there are several resources available to help you locate elder law services in your community.

If you meet with a lawyer, be sure to discuss these key issues and any other concerns you may have:

Options for health care and long-term care decision-making for the person living with dementia.
Options for managing the individual’s personal care and property.
Possible coverage of long-term care services, including what is provided by Medicare, Medicaid, veterans benefits and other long-term care insurance.

Gather all documents relating to the assets of the person with dementia ahead of time so you can bring them to your appointment.

✔ Itemized list of assets (e.g., bank accounts, contents of safe deposit boxes, vehicles, real estate, etc.), including current value and the names listed as owners, account holders and beneficiaries

✔ Copies of all estate planning documents, including wills, trusts and powers of attorney

✔ Copies of all real estate deeds

✔ Copies of recent income tax returns

✔ Life insurance policies and cash values of policies

✔ Long-term care insurance policies or benefits booklets

✔ Health insurance policies or benefits booklets

✔ List of names, addresses and telephone numbers of those involved, including family members, domestic partners caregivers, as well as financial planners and/or accountants

Those named in the power of attorney document should have a copy of and access to the original document.
The person with dementia should name a successor (back-up) agent for power of attorney in the event that the agent may one day be unable to act.
The person with dementia should decide if the agent with power of attorney for health care has authority to consent to a brain autopsy. This may vary according to state law.
Once a power of attorney for health care document and/or a signed living will is in place, give copies to the person’s health care providers.
Consider choosing an attorney or a bank to manage the individual’s estate if the person lacks a trusted individual with the time or expertise.
The person living with dementia should discuss his or her wishes with the chosen power of attorney to make sure the agent is comfortable carrying them out.

Do you need assistance locating an elder law attorney? Start with these resources:

Contact your local community resource center
Use the online directory of the National Academy of Elder Law Attorneys
Visit the Eldercare Locator online or call 800.677.1116
Visit LawHelp.org to learn about free or reduced cost legal aid programs in your community