If you have been following the news, you may have heard about esteemed actor Bruce Willis’s dementia diagnosis. Dementia refers to a cluster of symptoms affecting memory, cognitive abilities, and socialization, drastically interfering with an individual’s daily life. The most common cause of dementia in elderly Americans is Alzheimer’s disease.
Bruce Willis’s dementia diagnosis has us at The Chamberlain Law Firm thinking about how dementia can impact long-term care planning. In this article, we will explain the potential impacts of dementia and how pre-planning can give an individual with dementia and their families some peace of mind.
Dementia’s Impact on the Individual & Their Loved Ones
Dementia is painful to both individuals themselves and their loved ones. Caring for a family member diagnosed with dementia can be scary and frustrating because the condition worsens over time. Dementia may render your loved one unable to complete simple life tasks, such as making health care decisions or managing their finances. Inability to complete these tasks puts at risk the inheritance your family member wants to leave behind.
Further, since dementia causes a decline in cognitive and physical abilities, patients and their loved ones can anticipate years of long-term care by a professional institution, which, in New Jersey, can cost hundreds of thousands of dollars.
Navigating these turbulent waters alone can have a devastating financial toll. Fortunately, hiring an experienced New Jersey elder law attorney can help with asset protection planning and Medicaid planning, easing the financial burden associated with a dementia diagnosis.
Affording Long-Term Care With Medicaid
Because long-term care in New Jersey is expensive, your loved one will benefit from qualifying for Medicaid to cover these expenses. By knowing how to deal with the complex network of rules and regulations governing Medicaid, an experienced elder law attorney can be an invaluable resource when applying for affordable healthcare.
For example, a skilled lawyer understands Medicaid’s five year lookback at an applicant’s financial history. This means that Medicaid will look back at all your financial transactions for the last five years to see if there were any gifts given for less than their fair market value. If there were any, the gifts are penalized whereby Medicaid will not pay for care during the penalty period for the transactions. Understanding the look back period, and putting a good plan together in light of it, is essential to protecting your life savings for your future generations.
Alternatively, even if you fail to “pre-plan” ahead of time, you can still protect your hard-earned money if your loved one is in immediate need of long term care. An experienced elder law attorney can engage in emergency planning by using his understanding of the rules and regulations to provide guidance on transferring assets and setting up financial structures, allowing you to save a good portion of your assets.
Making Financial Decisions With Diminished Cognitive Ability
It is important to remember that the asset protection planning methods available are contingent upon the individual’s ability to sign and understand the consequences of their legal decisions. Unfortunately, due to the cognitive decline caused by dementia, your loved one may not be able to make their own financial decisions.
Any elder law attorney worth their salt will encourage you to have your loved one sign a financial power of attorney in order to give this decision making power to a trusted family member or friend. If this role is not determined in advance, the family will be forced to navigate a maze of court procedures to establish this power—which will cost time and money.
But be very careful, not every financial power of attorney is created equally. You need to ensure the one you sign does everything necessary to help you pay for long term care and save the most amount of money in the process. Working with an attorney can help make sure this is done right.
Having a Medical Power of Attorney
The concept of pre-planning and appointing a trusted decision maker applies to medical care, too. Since the advanced stages of dementia tend to leave patients unable to communicate, having a power of attorney agent for medical decisions is extremely important. It can avoid unnecessary delays in medical treatment by allowing a trusted person to make decisions on behalf of the individual with dementia.
Time is of the essence when engaging in asset protection planning and appointing trusted individuals to make financial and medical decisions for dementia patients. That is why we recommend sitting down with an attorney to discuss your loved one’s situation as soon as possible.
While it may not feel comfortable, pre-planning can go a long way towards saving stress for you and your loved ones. The Chamberlain Law Firm is here to help you throughout this difficult process. To schedule a free consultation with our knowledgeable elder law attorneys, give us a call at (201) 273-9763. For more elder law tips, check out AJC Law Insights.
This article is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with a lawyer about the specifics of your case, contact The Chamberlain Law Firm at (201) 273-9763 to schedule a consultation.