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Eliminating Guesswork

Effective Legal Planning for People with Alzheimer’s Disease

Todd C. Ratner

Todd C. Ratner

Although it is important for everyone to plan for their future, legal planning for those diagnosed with Alzheimer’s disease takes on heightened importance.
Alzheimer’s disease is a chronic, progressive illness and is the most common cause of dementia in our elder population. People with the disease are characterized with progressive intellectual deterioration together with a declining ability to perform the activities of daily living.
Early planning allows your loved one with the disease to be involved and express his or her wishes for future care, which eliminates the guesswork. Once an individual with Alzheimer’s disease has lost capacity, it is too late for him or her to designate the person or people they wish to make their healthcare, financial, and estate-planning decisions. It is imperative to note that most people in the early stages of Alzheimer’s disease have the requisite capacity to execute estate-planning documents.
As a threshold matter, when a client initially meets with an attorney, the attorney must determine whether or not the client has the requisite mental capacity necessary to reasonably articulate their wishes concerning their legal affairs. ‘Testamentary capacity’ is a legal term that refers to a person’s ability to be of sound mind in reference to altering or creating estate-planning documents. Unfortunately, legal testamentary capacity or competence is not a black-and-white determination.
The Massachusetts Supreme Judicial Court provides the following standard definition of capacity to execute wills:
“Testamentary capacity requires ability on the part of the testator to understand and carry in mind, in a general way, the nature and situation of his property and his relations to those persons who would naturally have some claim to his rememberence. It requires freedom from delusion, which is the effect of disease or weakness, and which might influence the disposition of his property. And it requires ability at the time of execution of the alleged will to comprehend the nature of the act of making the will.”
In general, the requirements of testamentary capacity are fairly simple. Your loved one with Alzheimer’s disease must meet only this minimal test at the moment the estate-planning documents are executed. Therefore, documents may be valid even if the testator is in the midst of delusion immediately prior and subsequent to execution, as long as he or she possesses the requisite testamentary capacity at the moment of execution.
Therefore, even if your loved one does not recall signing the document the day following execution, it does not invalidate the document if he or she understood it when signing. The mere existence of the onset of dementia caused by Alzheimer’s disease does not preclude the signing of estate-planning documents, provided that the necessary criteria for mental capacity are met. However, the drafting or revisions to current estate-planning documents should be considered in the early stages of the disease.
Assuming that your family member with Alzheimer’s disease has sufficient capacity to do so, he or she should execute documents to nominate another to make their health and financial decisions at their earliest opportunity. These documents include a healthcare proxy, durable power of attorney, and a living will, which are oftentimes referred to as ‘planning for incapacity documents,’ as they are legally binding only while a person is alive. Preparing for the possibility of Alzheimer’s disease impairing decision-making abilities makes incapacity planning a necessity.
For Alzheimer’s patients, empowering family members or trusted friends to make healthcare decisions (healthcare proxy and living will) and financial decisions (durable power of attorney) ensures that the caregiving effort will not be hindered by a lack of resources or the absence of a decision maker. In the event that your loved one with Alzheimer’s disease no longer has legal capacity and failed to execute the above documents, another person must petition the probate court for guardianship and/or conservatorship, which is a long, public, and expensive process.
Similarly, everyone needs to make a will. This provides for the orderly distribution of your estate upon your death. If you do not draft one, or use some other legal method to transfer your assets when you die, Massachusetts law will determine what happens to your property according to a predetermined legal formula that may very likely not adhere to your preferences.
It is very likely that those with Alzheimer’s disease will incur exorbitant health costs and may require very expensive, specialized nursing-home care. The average cost of a nursing home in Massachusetts is approximately $10,000 per month. Moreover, those with Alzheimer’s disease tend to stay in nursing homes longer than the average resident. Unless you are a veteran of the armed forces, the available options include private payment, long-term-care insurance, and Medicaid.
Since most of us cannot afford to pay $10,000 per month privately without exhausting our assets very quickly, and since long-term-care insurance is typically not available to someone who has already been diagnosed with Alzheimer’s disease, it is worthwhile to explore the Medicaid option. In order to qualify for Medicaid, the Alzheimer’s patient must meet an asset threshold and is subject to a five-year look-back period for any gifts or transfers they made. As such, timely Medicaid planning is essential to the preservation of assets.
It is critical to embark on a legal plan for the future medical and financial care of your loved one with Alzheimer’s disease at the earliest possible opportunity. Proper planning enhances the quality of care for an Alzheimer’s patient and also provides peace of mind for those caring for him or her. Most importantly, timely planning allows the Alzheimer’s patient to legally communicate his or her preferences for future financial and health-related decisions, even if they do not later have the capacity to make these choices.

Todd C. Ratner is an estate-planning, elder-law, business, and real-estate attorney with the regional law firm Bacon Wilson, P.C. He serves as the co-chair for the Alzheimer’s Assoc. Tri-County (Hampden, Hampshire, and Franklin) Partnership and is a member of the National Academy of Elder Law Attorneys and the Estate Planning Council of Hampden County. He is also a recipient of Boston Magazine’s Super Lawyers Rising Stars distinction from 2007 to 2011; (413) 781-0560;

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