We’re all familiar with that moment when you walk into a room and can’t remember what you were looking for. It’s disorienting, and sometimes downright distressing. Now, imagine that moment lasts longer than just a moment. In addition to Alzheimer’s Disease, there are a myriad of other long term illnesses that can impair one’s ability to make sound choices concerning their health, living conditions, and personal finances.
Someday, medical science may unravel and address the intricacies of these conditions, but until then an important way to empower yourself against such a future is to engage in “incapacity planning”. In other words, making sure you have control over what happens should you become incapable of taking care of yourself.
Here are some important questions to ask yourself:
- How would your incapacity be determined, and by whom?
- How would your assets be managed?
- Who would pay your bills?
- Who would file your income taxes?
- Who would have responsibility for your daily care?
Another common scenario is that the judge appoints someone who has neither the knowledge, nor ability, to adequately research the choices before them. For example: the national median cost for nursing home care in a private room is about $8,121 per month, according to Genworth's 2017 Cost of Care Survey. For a private room in California, the monthly cost is $9.703 and in New York, it is $11,701. Where would you prefer to be housed? Although selecting a care facility is just part of the broader conversation, these figures provide an idea of why one might consider planning for not only power of attorney, but specifying further details of care and responsibility.
It's crucial to take control of these decisions while you still can. The three steps below can help ensure that you have a voice in your own care and management of assets.
- Create an Advanced Healthcare Directive to specify your health care preferences. This lets your physician, family and friends know the types of special treatment you want or don’t want at the end of life, your desire for diagnostic testing, surgical procedures, and resuscitation.
- Appoint a Durable Power of Attorney. This is an agent who can manage your financial affairs, and conduct other business on your behalf. The agent should be someone you trust implicitly, someone who will not take advantage of you. This document can be tailored to meet your specific needs.
- Set up a Living Trust that provides solid incapacity language to allow for flexibility around management of assets and gives you the ability to appoint a family member, trusted friend or a corporate fiduciary as Successor Trustee. Typically, your family physician will examine you and certify your incapacity when the time comes and you will have a smooth, private transition plan in place with the Living Trust. A court ruling will not be necessary. Trustees must always act in the best interests of the client and can perform all the duties listed earlier. Characteristically, the corporate fiduciary has greater knowledge and expertise about the matters being handled. They are held to a standard of conduct and trust above all others.
None of us wants to envision a future where we are facing such an intractable foe as Alzheimer’s. Nonetheless, working closely with your attorney to determine your own plan for incapacity will reduce the chance for fraudulent activity, lighten the burden on those you love, and help ensure that your last years are as consistent with your wishes as possible. Ultimately, by planning ahead, you and your loved ones may enjoy the highest possible quality of life later on.