Texas Estate Planning

Money & Dementia: How the Diagnosis Can Affect Your Finances

Aging is difficult, especially if you have dementia. In a recent story from NPR titled, “An older person's money management errors may be a sign of some sort of dementia,” reporter, Sarah Boden, speaks with people across America who have experienced the effects of dementia on family finances. The conversations are insightful, yet heartbreaking. 

“Dementia specialists say money problems can be one of the first signs of trouble,” NPR reported. Experts spoke of elders being scammed or taken advantage of by financial institutions and family members, but stories also included reckless spending and seniors forgetting to mail out checks. Everyone should be on the lookout for financial predators and missteps as their loved ones begin to age. 

The story continues, citing, “One study of some 81,000 Medicare recipients found that people with Alzheimer's disease and related dementias started to develop poor credit up to six years before their diagnosis.” Dementia comes in many different forms which can impact someone’s ability to handle their money. But one thing is clear: dementia negatively impacts cognition and memory, two functions necessary for taking care of financial duties such as paying bills. 

Many seniors value their independence, making conversations about money and aging emotionally challenging. And although financial institutions are taking steps to protect seniors from scams and thoughtless spending, the responsibility ultimately falls on family and friends who know the aging person and their values. 

It can be hard to see the impact of dementia on a loved one’s finances, especially if you live out of state, but it’s important to check in to avoid catastrophe. This was especially important for one family in the story who needed money to afford their mother’s care, but lost out on selling their home due to foreclosure because her dementia made her unable to pay the mortgage. 

There are private companies that will keep an eye on finances for a monthly fee and certain accounts allow owners to add a trusted contact to be notified in case of any major withdrawals, but these options aren’t available or appropriate for everyone. In estate planning, a Durable Power of Attorney is a document which grants someone you know and trust the authority to access all of your financial accounts. 

It’s a huge act of trust and respect to give someone that much access to your finances, but it’s often vital for estate planning purposes. For instance, if your loved one is in the hospital for an extended period of time, someone will need to go to their residence and pay the bills before they begin to pile up. But banks are built to keep people’s money safe, which is why a legally binding document is necessary to handle someone else’s finances when they are unable to. 

Speak with an estate planning attorney licensed in your state if you begin to notice things are changing with you or your loved one’s cognition and spending habits. Making sure the family home and other assets are protected can be immensely helpful for the next generation – start the process today by giving us a call: 713-429-0218

New Technology Brings A New Aging Marker: Taking Away the Phone

At first, Dr. Z thought his 83-year old mother was simply confused when she called to say she’d forgotten passwords to her accounts. Then she’d say that the programs had stopped working. However, over time, he realized that she was showing early signs of dementia, as reported by Kaiser Health News in the article “The Delicate Issue of Taking Away a Senior’s Smartphone”

With seniors using cellphones, computers and tablets, another area of concern for older adults has emerged. Deteriorating cognitive skills may make it difficult for seniors to use these devices, even before other more classic signs of early dementia appear, like forgetting names or keys.

Determining whether to block access to bank and investment accounts or other online resources may present the same issues, as taking away car keys once did.

This issue reflects the growing use of technology by seniors to allow them to stay in touch with friends and family, join interest groups, visit virtually and do their banking and shopping online.

Some physicians are already adapting to this new digital reality. At Johns Hopkins Medicine, one professor of medicine now asks older patients if they use a computer or smartphone and are having trouble, including forgetting passwords or getting locked out of accounts.

If there’s a notable change in how someone is using technology, the practice now proceeds with a more in-depth cognitive evaluation.

At Rush University’s Alzheimer’s Disease Center in Chicago, older adults are bringing up problems with technology, as a non-threating way to introduce their troubles with thinking. Instead of saying they are having memory issues, they say they are having problems with their smartphones or getting programs on their computer to work.

If technology becomes confusing, anything that is not essential should be removed from the smartphone or computer. When safety becomes an issue, such as seniors who are targeted by scammers, family members should counsel the senior against giving out their Social Security or credit card information.

Be cautious about getting someone’s passwords to check on their email or online bank or brokerage accounts. Without consent, it’s a federal crime to use another person’s password to access their accounts. Consent should be granted in writing.

Online shopping is another problem. Gain the person’s permission to unsubscribe from accounts that send emails and remove friends from Facebook. A parental control app blocks use, when the senior is not supervised and also blocks adult content.

For others, the use of a “stored value” card that has a limited amount of money can be used, in place of a credit card. Credit bureaus need to be notified not to open accounts in someone’s name.

Talk with an estate planning attorney to learn how to cope with an adult with cognitive problems and their online life. This is a new area in elder care, and it will become increasingly prevalent, as boomers age.

Reference: Kaiser Health News (September 26, 2019) “The Delicate Issue of Taking Away a Senior’s Smartphone”

Be Prepared, Because The Future Comes Sooner Than You Think

When children are born, many people make sure to have their wills prepared, so they can name a guardian in the event both parents die. Usually those documents are not reviewed, says the article “Preparations for the Future” from the Montevideo American-News, and this can lead to problems.

Legal and medical experts encourage people to review their estate planning documents from time to time, to be sure that their wishes have not changed.

When people are diagnosed with a serious illness, they are also encouraged to examine their legal and healthcare documents. It’s also important to have plans in place for people diagnosed with dementia as soon as possible, as long as that person is still deemed mentally competent to make these decisions for themselves.

According to the National Institute on Aging, advance planning should take place immediately after a diagnosis of early-stage Alzheimer’s, while the person can participate in discussions.

People with early stage disease can often understand many aspects and consequences of legal decision making. However, as the disease progresses, the ability to make decisions becomes difficult and the validity of the document may come into question.

Advance directives for healthcare documents that communicate healthcare wishes are just part of the legal documents that need to be created. Other documents include a Living Will, which records a person’s wishes for medical treatment, a durable Power of Attorney for Healthcare, which designates a person to make healthcare decisions on your behalf and a Do Not Resuscitate (DNR) order.

Estate planning also needs to be done. An estate planning attorney can help the individual and the family create their plan for the future. There will need to be a Last Will and Testament created, as well as a Power of Attorney for finances, so someone can handle the financial aspect of their life.

A Living Trust may need to be created, to provide instructions about the person’s estate and appoint someone to hold title and property for the beneficiaries. It may be necessary for trusts to be created and funded to protect the family’s assets.

Having an estate planning attorney who has worked with patients suffering from Alzheimer’s and other forms of dementia, will allow the family to focus on caregiving.

Reference: Montevideo American-News (September 25, 2019) “Preparations for the Future”

Preparing for Alzheimer’s

Once there has been a diagnosis of dementia, there are a number of issues that families need to address, including legal issues. The best way to approach this task, says being patient in the article “Alzheimer’s and the Law” is to meet with an estate planning attorney who can guide the family in planning for the future, and creating the needed documents.

The conversation will start with who should be named to two different kinds of power of attorney. One is for the durable power of attorney, which will give the named person the ability to manage any business decisions, sign contracts and deal with insurance companies. This document will need to be inclusive, so the agent can act for the person who is going to be incapacitated.

Next, there will need to be a healthcare power of attorney. It should be complemented by a living will, which states what kind of lifesaving measures you would want, if you were to be declared terminally ill. The healthcare power of attorney also allows a person to be named to make medical decisions, if the Reference: being patient (August 22, 2019) “Alzheimer’s and the Law”

person with dementia can no longer make good decisions on their own behalf.

As long as the doctor has not yet declared the person incapacitated, they can sign the power of attorney for financial and health care. If the person has been declared incapacitated, then the family will need to go to court for a guardianship proceeding, so the court can declare who will be in charge of the person with dementia.

Some families prefer to have one person in charge of the loved one’s financial affairs and a second person to be their healthcare power of attorney. If there is a family member who is good with money and business, that person will do a better job than someone whose heart is in the right place but doesn’t manage money well. A nervous or easily excitable family member may also not be the best choice for healthcare power of attorney, especially if important decisions need to be made in a crisis situation.

Make sure that the people who are being considered for these tasks live near enough, so they can be available when needed. A child who lives on the other side of the country may want to be the decision maker, but if they are too far away, it will create more problems than it solves.

Before naming anyone to the power of attorney roles, speak with them about the situation, and be clear about what they will be expected to do. Clarify the difference between the two roles, and that of the executor. The executor is the person who is in charge of the person’s estate after they pass. They do not have an active role, while the person is living.

People generally don’t like to think about times when they may not enjoy good health, but this is a situation where waiting to address the issue can become extremely costly. A skilled estate planning attorney who works with families with dementia will understand the situation. They can be a valuable resource of information about other related services that will become needed over time.

A Second Marriage Thanks to Alzheimer's

Alzheimer's works in ways that cannot be predicted. What memories will disappear and when they will disappear can often seem random.

Michael Joyce of New Zealand suffers from Alzheimer's disease. He had been married to his wife for 38 years and eventually the disease progressed enough that he forgot he was married. In most cases, this would be a cause of deep pain for Joyce's wife.

It is not easy for family members when patients forget something that important. In this case, Joyce remembered that he still loved his wife and he asked her to marry him for what he thought was the first time.

The couple held a second ceremony as the Washington Post reported in "Husband with Alzheimer's forgot he was married to his wife of 38 years. He proposed, and they married again."

While this story ends on a heartwarming note, there is an important lesson here about how Alzheimer's disease works. People who get the disease cannot know what memories they will lose and when they will lose them, so they cannot afford to wait to make plans for dealing with the disease. Otherwise, they may forget something important before they fully plan.

People need to go to an estate planning attorney before that happens. That way they can make sure they have planned for their estates and their end-of-life care through powers of attorney and advanced medical directives.

Reference: Washington Post (Jan. 2018) "Husband with Alzheimer's forgot he was married to his wife of 38 years. He proposed, and they married again."

Slowing Alzheimer's Down

Millions of Americans suffer from the devastating effects of Alzheimer's disease. Despite efforts to find a cure to end patients' suffering, medical scientists have not yet been able to find one. There is still much about the disease that is not understood.

However, scientists have learned enough about how the human body and brain work, that they now understand some ways the disease's progress can be slowed and perhaps even prevented in the first place.

Recently, a neuroscientist offered some helpful tips in Market Watch in "These simple lifestyle changes can prevent or slow Alzheimer's," including:

• Get Regular Exercise - It is believed that regular moderate exercise can help slow the progress of Alzheimer's. A mere 2.5 hours of weekly exercise as simple as taking regular 15 minute walks can be helpful.
• Move Frequently - Long periods of time sitting down will cause the body to go into a metabolic rest state that can ultimately be harmful. It is suggested that whether you are at home or the office, you should get up and move around every half hour or so during the day.
• Mediterranean Diet - Dietary changes can also be helpful. You should consider eating more fruits, vegetables, whole grains, nuts and legumes. Replacing butter with olive oil is also a good idea. Finally, it is a good idea to use poultry and fish as your main protein sources more often than beef and pork.

Reference: Market Watch (Nov. 23, 2016) "These simple lifestyle changes can prevent or slow Alzheimer's." including

Plan Before Alzheimer’s And Dementia Strikes

With most diseases, either the disease is cured or it is not. With Alzheimer’s and dementia, however, there is an actual change in the “person” affected and the disease can become destructive, personally and financially.

Alzheimer’s and dementia are, more broadly, simply not “diseases” in the classic sense. They require a special sort of planning for both yourself and your loved ones.  

The idea of planning ahead for the possibility of Alzheimer’s and dementia is an important one. In fact, CNBC recently explored the importance of early planning in an article titled “Create financial and legal plans to manage Alzheimer's.”

Because the changes wrought by these diseases occurs in degrees, by the time the problem is known it is already too late to do anything about it, legally if not financially. Mental competency is one of those core requirements to creating a legally sound plan. When it is a close call, any plan made (even with trusted counsel) can just fall apart. For example, what if a family controversy develops over who manages the estate?

Just as the best time to plant a tree is yesterday, the same holds true for making proper estate planning arrangements. You (or your elderly loved ones) will never have more mental capacity than you do today.

The very real threat of Alzheimer’s and dementia provides an all-too-common and all-too-real reason to consider what may come while you still can.

Reference: CNBC (October 7, 2013) “Create financial and legal plans to manage Alzheimer's”