The number of Americans with different forms of dementia, such as Alzheimer’s disease, continues to grow at an alarming rate, according to the Alzheimer’s Association.
If you’re caring for someone with dementia, you may face a legal catch-22 you hadn’t anticipated: they can’t – or won’t – sign a power of attorney. That’s the legal document that allows someone else to make critical medical and financial decisions on their behalf when they’re not able to.
Dementia and power of attorney issues can cause unwanted complications in a person’s care. Their inability or refusal to sign essential legal documents may leave family with limited options that may not be in the person’s best interests.
Ron Anderson, an ARAG® network attorney, says “There are common scenarios that we see in our practice regarding the impact of dementia on making important decisions and estate planning.”
Find out about three common scenarios involving someone with dementia and their power of attorney, some of the options available in these situations, and what steps to take to avoid costly problems.
Scenario 1: It’s too late for the person to sign a power of attorney
Often, by the time a caregiver realizes that their older adult has diminished mental capacity, they’re no longer able to sign the necessary legal documents.
Anderson says, “If a person gets to the point where they don’t know who their family members are, what assets they own, and who they would want to make decisions for them regarding their assets and health care matters, then they aren’t mentally competent to sign a legal document such as a health care power of attorney or financial power of attorney.
“In this case,” Anderson advises, “there is very little that can be done for the person except applying to the court for a formal conservatorship or guardianship.”
A conservatorship is when the court appoints a person (the conservator) to have control over a person’s (or ward’s) finances. A guardianship is when a person (the guardian) is appointed by a court to have control over the care, comfort, and maintenance of another person.
Unfortunately, legal proceedings for these types of conservatorships and guardianships are usually time-consuming and expensive due to legal fees, agents’ fees, and court costs.
Option: Use married status to keep access to co-owned assets
Anderson points out one solution that could prevent these problems.
“If the person is married and, as a couple, they made earlier decisions to hold their assets as co-owners, then the mentally competent spouse can still access the family checking accounts, savings accounts, or other assets without the necessity of going to court for a conservatorship.”
Scenario 2: The person is mentally competent, but fails or refuses to sign a power of attorney
In this scenario, the person with dementia is still able to make sound decisions, but hasn’t done any estate planning or has refused to set up any powers of attorney or co-owned financial accounts.
“At this point,” says Anderson, “the person is still entitled to make decisions on their own regarding finances and health care.
“They could sign financial and health care powers of attorney to designate a trusted person to make these decisions for them. Or, they could choose to make no estate planning decisions at all.”
This can create a very difficult situation for everyone involved.
Option 1: Suggest standby conservatorship and/or guardianship instead
One option is to have an open, honest discussion with the person. Emphasize the importance of having a financial or health care power of attorney and the negative consequences of not having any powers of attorney in place.
If the person still refuses to sign a power of attorney, you could suggest that they consider signing standby conservatorship and/or guardianship papers instead.
These documents would allow them to choose who they would want to make financial or healthcare decisions for them. Later, these documents would allow the court to hold a voluntary proceeding.
Doing this would be simpler, easier, and cheaper than if an involuntary guardianship or conservatorship were required.
“Unfortunately,” adds Anderson, “if no action is taken by the person, there is very little that we can do except apply to the court for an involuntary conservatorship or guardianship if the person is making decisions that are harmful to themselves.”
Anderson notes that one of the biggest challenges he faces is that people wait too long to obtain these documents because they don’t think they need them. Or, they put off choosing someone to make decisions on their behalf and so, don’t complete the documents.
Option 2: Emphasize that it’s not about age or dementia
“This can even be the case for a young person,” says Anderson. “For example, a young person may be in an automobile accident in which they incur a head injury and then suffer from temporary or permanent mental incapacity.”
Sharing an example like that may help your older adult recognize that everyone should have these essential legal documents in place. They aren’t needed just because someone has dementia or is aging.
Scenario 3: The person plans ahead and has the necessary powers of attorney in place
This is the best-case scenario – when a person completes the necessary powers of attorney before dementia becomes an issue or if their doctor is able to certify that they’re still mentally competent.
Anderson says there are multiple benefits when advance planning is done, “First, the person can make informed decisions about who they want to appoint as their agent to make health care or financial decisions for them if they are unable to do so.
“Second, the person is able to assist in creating proper powers of attorney documents and decide whether the powers should be effective immediately or upon their incapacity.
“Additionally, any of the documents may be amended or revised as long as the person is mentally competent.
“Taking these measures often eliminates the need for a court-supervised conservatorship or a guardianship in the future.”
Proactively complete essential legal documents to avoid costly problems
Mentally competent persons of at least 18 years of age should have a will, financial power of attorney, and health care power of attorney in place.
It’s also a good idea to consider completing a living will.
“This is vitally important to save family finances and ease the burden on those that have to undertake these duties for the disabled or deceased person,” says Anderson.
“A few simple documents can save an enormous amount of time, trouble and expense. The worst thing most people can do is to do nothing.”
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