*Please Note:
The information provided herein is for discussion and educational purposes and may not be construed or relied upon as individual legal advice. Persons in need of individual legal advice are urged to contact a lawyer of their choice.
Navigation- Previous | Table of Contents | Next
Legal And Financial Responsibilities*
Individuals with dementia have difficulty managing their business affairs. As they decline they cannot deposit checks, pay bills, sell personal property, or make personal health care decisions. A responsible person must have the legal authority to handle these matters. In many instances, individuals with dementia will lose capacity and become unable to make their own financial and medical decisions.
It is important to designate a person to assume legal responsibilities before the individual with dementia becomes incompetent.
The first step in developing a plan is to collect all the financial and legal documents that pertain to the individual. These include, but are not limited to, prior tax returns, information on insurance policies, mortgages, bank accounts and financial investments. Previously executed wills and trusts and descriptions of employee benefits are also important.
Durable Power of Attorney
Drawing up a Durable Power of Attorney and Durable Power of Attorney for Health Care Decisions are the most important legal steps that you can take in planning for the future care of a person with dementia. Remember that this planning must be done early in the illness while the person has the capacity to do so. A Durable Power of Attorney remains in effect, even after the person giving the power is no longer considered competent to handle his or her own affairs.
A Durable Power of Attorney is a power that one person, the "principal" may grant to another, the "agent." The person granting the power must be sound of mind, that is, he or she must basically understand the nature of the agreement at the time it is written and want to sign it. That is why interested families are urged to arrange the appointment of a Durable Power of Attorney early on in the illness when the individual can still understand the nature of the agreement. These most likely should be drawn up by an attorney, but generic forms are available.
The document can be written so the appointed agent must follow specific guidelines that were established when the power was first granted. The agent will have the authority to sell the house, the car, and spend all of the money in the bank accounts. In any case, the agent is obligated to make decisions that are in the best interest of the person giving the power. It is very important to choose an agent that you can trust to do what you want.
Remember that you must obtain a "Durable" Power of Attorney to have a legal tool for acting on behalf of an impaired person. A simple power of attorney will not work.
Durable Power of Attorney for Health Care Decisions
Planning for the medical future of a person with dementia is critical. The law makes the basic assumption that it is the right of individuals to plan ahead for the time when they may be incapacitated. Individuals can select someone to make health decisions on their behalf, or they can declare to their doctor their wishes and desires about extraordinary life saving measures when they become terminally ill.
The Durable Power of Attorney for Health Care Decisions permits one person, the "agent," to make health care decisions on behalf of another person in cases when the person granting the power, the "principal," becomes incapacitated. The agent has broad authority, so it is very important to choose an agent that you can trust to do what you want.
Living Will
A Living Will is a legal document that permits individuals to instruct their physician in advance whether they wish to have life-sustaining procedures withheld in the event of a terminal illness. The Living Will goes into effect only when the individual is certified by two physicians to be in a terminal condition. It does not provide for an agent to make the decision, but directly instructs the physician as to how the person wishes to be medically treated once certified to be terminally ill.
It may be used alone or in conjunction with a Durable Power of Attorney for Health Care Decisions. It is more limited in scope than the Durable Power of Attorney and more restrictive in the conditions that must be met before it can take effect. It provides only for the very end of life, but it does not provide for the many other health care decisions that may need to be made long before death is imminent. Individuals should fully discuss their Living Will instructions with their doctor and have an original version placed in their medical files. It is also advisable to discuss these instructions with members of the family.
Do Not Resuscitate Directives
The laws further recognize "Do Not Resuscitate" (DNR) directives as valid directives to be honored by emergency medical personnel, doctors, nurses, and other healthcare personnel. It allows you to direct that no medical procedures be used to restart breathing or heart functioning, if your heart or breathing stops. An original DNR signed form needs to be available at your home for emergency medical personal if 911 is called.
This is not the same thing as a "Do Not Resuscitate" (DNR) order, which is completed by a physician who is responsible for the care of a patient admitted to a licensed medical care facility or licensed adult care home.
Bank Accounts
A variety of simple bank accounts can help manage day-to-day expenses. These accounts include personal accounts, joint accounts, trust accounts and pay on death accounts. You may want to discuss your choices with a lawyer who can recommend the right account for your family. If there are other adult family members involved, you may also want to discuss this with them. This step will help to eliminate conflicts later on.
A special cash account should be kept in the name of the caregiver only. The account balance should be large enough to pay the impaired person's normal household expenses for at least a month. This special cash account can be used as a reserve fund in the event of the person's death. It permits the caregiver to pay the required expenses until the person's estate has been settled.
Two or more people may open a joint bank account. Money from this account can be withdrawn by any person named on the account. If the caregiver uses their own funds to pay for care, they should keep good records. This may be very important later if the caregiver applies for public assistance for the person with dementia.
A disadvantage of a joint account is that the incompetent person can still withdraw money. A more remote danger is that one of the co-signers might file for bankruptcy or divorce, and funds from the account might be attached as part of a court settlement.
Trusts and Wills
A trust and a will can work well together to manage and divide financial resources. A trust transfers money or property from one person to another, with certain conditions attached. A third person manages the trust and it continues in effect until its conditions have been met.
The person creating the trust is the "grantor." The person who receives the benefit of the trust is the "beneficiary." The beneficiary might be the grantor's child, spouse, grandchild or anyone else the grantor chooses, including himself. The person who manages the trust is the "trustee." As a caregiver, you could be the trustee or someone outside your family could also serve as trustee. Financial institutions also offer this service for a fee.
Trusts provide income for beneficiaries, reduce estate taxes and eliminate some probate fees, assure that property continues to serve any desired special purpose after the grantor's death, and reduce the grantor's or beneficiary's daily task of money management.
Trusts are an option for persons with considerable assets. They are fairly expensive to set up and manage. You may want to contact a lawyer or banker to determine whether this option is right for your situation.
A will is a document that states how a person wants their assets divided after death. Anyone who owns any "real property" (house or land) or any "personal property" (furniture, bank accounts, jewelry, and automobiles) has an estate. Even money owed to a person is part of the person's estate. In all these cases a will should be made. In a marriage, spouses each need a separate will. Find out if the person in your care has a will.
If there is no will, be sure one is drawn up while the person is still legally competent. A will may be found "invalid" (that is, not binding) if written too late in a person's illness.
When a person dies without making a will, they are said to have died "intestate," and that means the estate will be split up according to the laws of the home state. The state's way of dividing the estate may not be how you or the impaired person or the rest of the family would choose.
Kansas has its own rules about writing a will assuring that it is valid. Speak to a lawyer about this. A lawyer can help you draw up a will according to your wishes and protect your legal rights. Members of the Kansas Bar Association often prepare simple wills for a small charge as a public service to seniors.
Guardianship
If the individual is already incompetent and unable to sign a Durable Power of Attorney for Health Care Decisions, you may want to petition the District Court to appoint a guardian to handle these matters. The guardian's duties will vary, depending on the limits the court may have defined, but generally they have to do with assuring the physical safety and health of the impaired individual.
Conservatorship
The financial tools described so far assume that the impaired person is competent and can give consent to the arrangement.
If the individual is already incompetent and cannot give consent, the family, a caregiver or a friend can petition the Court to name a conservator to manage the individual's assets. Other close family members are notified and have the right to support or object to the petition. The Court will require a medical evaluation that states the proposed ward is not capable of making their own decisions. The Court monitors conservators.
Legal Advice
You may want to start by contacting your family lawyer. The Kansas Bar Association operates a lawyer referral service. You may contact them at (800) 928-3111. You can also contact the Senior Law Project near you by calling the Kansas Elder Law Hotline at (888) 353-5337 to get free advice on how to proceed.
Navigation- Previous | Table of Contents | Next