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Dementia complicates both estate planning and administration

Regular readers of this blog know that it's never too early to start making plans for how your assets and property will be divided after you're gone. But death isn't the only event that could prevent you from making the right choices about your estate

There are many other circumstances that require early planning, and chief among them may be dementia. According to the Alzheimer's Association, 1 in 3 senior citizens dies with some form of dementia, and there's no telling just when it will begin to take effect or how rapidly it will progress. Once it does, sufferers begin to lose the capacity to make important decisions; this includes allocating money and possessions to their loved ones. 

If you have a parent with Alzheimer's disease or a similar condition, you know how frustrating -- not to mention heartbreaking -- it can be. Unfortunately, some caregivers have been known to take advantage of a patient's vulnerability by pushing them to make decisions that only serve the caregiver. In one recently reported scenario, a woman with dementia designated a sizeable financial account as payable to the caregiver upon the patient's death, despite her will's instructions to divide all accounts among her children. 

Because the woman is still living, her children may have the opportunity to speak with her and her attorney about this modification. If her dementia isn't in an advanced stage, they might be able to iron out the situation before it's too late. The woman may have been of sound mind when she elected to leave this money to her caregiver. But it's also quite possible that she's a victim of illegal exploitation -- defined under Texas law as "the improper use the resources of an elderly (or disabled) person for benefit, profit, or gain of a caretaker, associate or family member without informed consent from the elder." If that's the case, the caregiver's behavior should be reported and the account amended to be payable to the woman's children. 

In some cases such questionable decisions aren't discovered until after someone has died. When this happens, it's possible for the executor of the will to file a lawsuit against the caretaker, provided he or she can prove that the decedent lacked the capacity to make such a decision. If successful, the executor would then be able to distribute the funds under the original terms of the will. 

Of course, the best way to avoid these legal challenges is to plan early, before dementia or another debilitating illness or injury strikes. 

Source: my SA, "Paid Caretaker should not be receiving inheritance," Paul Premack, March 3, 2014

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