hey I'm Paul rap Elena in this video
we're going to talk about how to deal
from an estate planning perspective with
a family member who either has or show
signs of dementia alright so these days
people are living a lot longer those you
know the healthcare industry is doing
some amazing things allowing our our
bodies to live a lot longer than we used
to
but as a result of people physically
living longer you see a lot of people
who develop you know those mental
conditions Alzheimer's dementia as some
of my clients say old-timers and where
they get to a point where they no longer
have the capacity to understand you know
things that they need to do so that
plays a significant role in the whole
estate planning process and I'm gonna
what identify several issues that really
need to be addressed when a family
member either show signs or has dementia
so let me give you an example let's say
we have maybe a couple with with two
children and I'll call the wife I'll
call her and I like to come up with
these names that are fairly easy to
remember in my examples I'm gonna call
her dementia Diane and she's married to
overworked Oscar and I call him
overworked Oscar because if dementia
Diane has dementia
guess who stuck doing all of the
housework and guess who stuck watching
over Diane keeping an eye on her and and
he is gonna be overworked as the as the
you know caretaker and and house
maintainer and all of that stuff that
Oscar has to do they have two children
we'll call them thing one and thing two
all right so my first point of emphasis
is as soon as there is a a sign that
dementia or you know mental capacity may
be diminishing and that's usually when
families tell me you know our mother or
my wife seems like she's forget
forgetting more things than she used to
forget you may be able to have a kind of
conversation with her and you would have
no idea that she's forgetful but we know
because we're around her all day every
day she seems to be forgetting things
that she used to remember so I would say
you know at the first sign that that
there may be trouble
you need to act immediately because
those conditions typically don't get
better they progress they worsen and so
so important to put oftentimes to put
estate-planning in legal programs into
place while dementia Diane has the
capacity that general and generally
understand you know the things that
she's doing so the no-brainers are you
know make sure
Diane's will is in place make sure her
powers of attorney are in place her
living will and real important perhaps
to once she signs those powers of
attorney
maybe she appoints her husband
overworked Oscar as her agent maybe she
appoints one or both of the children as
the alternate agent or agents and you
know since we know her condition is
going to worsen if if dementia Diane has
an IRA at a financial institution what's
probably a really smart idea is once
Diane signs her power of attorney take
it to the financial institution and say
look Diane starting to get forgetful we
may have to use this power of attorney
that Diane signed you know years from
now are we gonna have any problems with
this power of attorney that Diane signed
and maybe they'll have their you know
their a tourney team look at it maybe
they'll say well we'd really prefer that
Diane sign our financial institutions
power of attorney form and so you got to
get that done so taking it to places
where you may need to use it is really
not a bad idea
all right and and while Diane is getting
her legal affairs in order
oscar oughta be getting his affairs in
order and as Oscar is getting his
affairs in order he shouldn't appoint
Diane to any
a position of authority not not having
power of attorney for Oscar not being
the executor of Oscars will we general
we want to set things up so that Diane
never has to sign anything or you know
have any responsibility to get anything
done ever again okay so the next thing
that you may want to consider with Diane
and Oscar if she still has the capacity
to generally understand you know the
nature and consequences of what she's
doing is perhaps forming a living trust
and the purpose of that is to arrange
what Diane and Oscar own so that Oscar
can handle all of that for the rest of
his life by himself so it may be a
living trust where Oscar is the sole
trustee and then if Oscar can't be the
trustee maybe you know thing 1 and thing
2 could be the successor code trustees
but Diane would never be a trustee of
that living trust because you know we
just want to arrange it where she
doesn't have to make any decisions so
that's another thing to seriously
consider another thing to seriously
consider and this will depend on you
know what what that couples net worth is
if they do have you know several million
dollars then paying for Diane's you know
dimension Diane's long term care may not
be an issue because they have the funds
to do it with their millions and
millions of dollars but if Diane and
Oscar are kind of like you know
middle-class people who may have saved
up several hundred thousand dollars you
know while they were working anywhere
from a few to several hundred thousand
dollars then at this point we have to
realize the possibility that Diane with
her dementia Alzheimer's whatever it is
whatever it might be in the future we
have to realize that it's more likely
that Diane's gonna need long-term
skilled care perhaps in a nursing
facility because that's just you know
when the mind goes that's one of those
conditions that renders it more likely
that someone would need long-term care
so on that note we want to make sure
that
that dimension I am never either
inherits anything or never is the
beneficiary of an account because if
Diane inherits in the future then that's
gonna cause assets to be added to her
estate that would have to be you know
just completely you know spent down to
until there was less than two thousand
dollars before she would qualify for a
long-term care Medicaid in a nursing
home facility because the problem is
Oscar is taking care of her for now and
he's gonna keep taking care of her as
long as he can but an Oscar happens to
pass away before Diane and that's that's
a possibility Oscar could get worn out
and Diane while her mind is not good
physically she could be you know strong
as an ox
so if Oscar dies we want to make sure
Oscars IRAs for example its traditional
for the husband to have an IRA and name
his wife as the beneficiary but if it's
that way an Oscar dies now dementia I
mean Diane's got to do a bunch of
paperwork to get it in her name and even
worse she'll have to deplete it all if
after Oscar her caretaker dies she's got
to go into a nursing home she'll have to
spend down all of what was formerly
Oscars IRA so maybe with Oscars IRA what
he does as he names thing one and thing
two
as his beneficiaries and the family has
an understanding that when if if Oscar
dies first
and those IRAs go to thing one and thing
two they're gonna set that money aside
sure there's some intent income tax
consequences but other than that they're
gonna set that money aside and use it
for dementia Diane's needs but those
those funds that were in overworked
Oscars IRA they won't penalize Diane
from being eligible for long term care
Medicaid same thing when we're doing
Diane's well we need to do Oscars will
and if Diane's potential nursing home
care needs to be considered then Oscar
in his will or in his trust doesn't want
to leave anything to Diane
because again that just lumps assets
into her estate again maybe there's the
informal family understanding that if
Oskar dies first things go to the
children the children will set it
outside and then Diane will be able to
qualify for long term Medicaid if that
is necessary and thing one and thing two
can use the assets for additional needs
sitters and other needs that dementia
Diane might have okay so another point
in just a couple more points another
point that I want to make is and this is
just because I'm an attorney and if you
wait too long you're likely to put your
attorney who's trying to help you in a
difficult position of having to notarize
documents when Diane doesn't have the
capacity to understand what she's doing
I'm just gonna ask you as a favor don't
don't put the attorney in that position
I've had to tell people when they came
in and and if that demented person had
capacity there were some things that we
really could have done to help protect
you know what the family had saved and I
just had to tell him I'm sorry yeah you
know I can't notarize his or her
signature because they don't have the
capacity to understand what they're
doing and so really acting immediately
is is really critical when you start to
see signs of you know dementia or
Alzheimer's or you know whatever that
mental condition might be so I'm just
asking you a favor don't put the
attorney you know in that position okay
so that's that's the planning for for if
you do act appropriately and you act
immediately as soon as you see signs
while the person still has the the
general capability of understanding what
they're doing now sometimes families
wait conditions progress procrastination
busy don't think about it and then they
you know when it's too late then they
come to me or somebody like me for help
and it's too late you know dementia
Diane she she she doesn't have the
capacity didn't understand what she's
doing and so that opportunity to
change Diane's will have her do a power
of attorney structure assets in a way
that they may be better protected if
there's a nursing home situation that
opportunity is usually lost but still
sometimes if if dementia Diane is is
really you know she has no more capacity
to understand what she's doing then
sometimes we have to do what we call in
Louisiana interdict Diane or in other
states we call it go through a
guardianship proceeding and those are
really really difficult and they're
they're just they're just a mess
so our procedure so let's let me give an
example let's say dementia Diane and
overworked
óscar their home needs to be sold
because they just they need to move into
an assisted living facility or or for
some reason their home needs to be sold
and Diane they they never did in the
estate legal work and Diane never signed
a power of attorney and now Diane is
demented to the point where she doesn't
have the capacity to understand what
she's doing but the house has to be sold
and to sell the house they need the
signatures of both Oscar and Diane to
sell that house well Diane can't do it
she doesn't understand what she's doing
so the family then has to sue Diane and
what we call one of these interdiction
or guardianship proceedings and our
state's procedure in Louisiana is we sue
Diane we have the sheriff serve papers
on Diane Diane has to have a lawyer
she's not gonna go get one because she
doesn't have the capacity to so we have
to wait several weeks for her not to
respond to the lawsuit and then we have
to get a judge to appoint a
court-appointed attorney for Diane who
has to visit Diane and check with her
doctors and and then there's court
hearings set for the family to go to so
a judge can hear all of this evidence on
whether he should take Diane's capacity
to transact for herself away from her
and if the judge does that then the
judge has to determine who should be her
guardian or in Louisiana we call it who
should be her
Raider to be able to transact for her
and that procedure proceeding takes many
many months so the home just sits there
kind of idle and and and then the home
perhaps gets sold by Oscar in The
Guardian later on so just a lot of stuff
and and once they've gotten to the point
where they need to be interdicted then
the opportunity to reposition assets is
often gone because that interdict that
that curator or that guardian you know
has to do take action that is you know
solely in the best interest of Dement
dementia Diane versus and what's in the
best interest of the overall family okay
so my my hard conclusion here and before
I give you my final advice I want to
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constructive comments below or always
awesome feel free to share with others
who may have a similar situation but my
point of emphasis here is you know I
know some people with estate planning
they procrastinate it's kind of you know
we don't want to face it we don't want
to talk about it but here's an area you
got to overcome any procrastination that
you might have and act immediately when
you suspect that there there may be
coming some gradual progression of of a
loss of capacity and get things in order
a lot of things here that need to be
discussed with the family and a lot of
action that may need to be take that
taken that the traditional family you
know doesn't necessarily take but this
is a unique situation that requires some
you know some unique action okay hope
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