What Steps Should You Take When a Loved One Exhibits Memory Loss
When meeting with the immediate family member of someone exhibiting memory loss, one of the first questions I often ask is: “How long have they been exhibiting this loss?” It is an important question because the answer often tells me how advanced the memory loss could be. In most instances the answer is six (6) months to one (1) year. However, in some instances I will be advised that it’s more than five (5) years. If the answer is the latter, my immediate concern is whether the individual is still mentally competent.
Sadly, dementia and its variants, including Alzheimer’s and Lewy Body dementia are progressive illnesses. While there are medications available to try to slow their progression there is no medication available to cure them. Delays in addressing the legal needs of someone with memory loss can be of significant detriment to the individual and their family; especially financially.
When an observation of memory loss (especially short term memory loss) is made when it first manifests itself it is still very likely that the individual has the requisite mental capacity to execute a Durable General Power of Attorney (POA), Last Will & Testament (LWT), Revocable Living trust (RLT) or an Irrevocable Medicaid Asset Protection Trust (MAPT), Health Care Proxy (HCP) and other advanced directives. However, as time passes and the memory loss becomes more advanced, for example, when the individual can no longer remember what they did earlier in the day, what they ate, who they met, etc., then the possibility that they lack the requisite capacity significantly increases.
One of the last things the family of an incapacitated person wants to hear from their attorney is that their loved one no longer has the capacity to execute essential legal documents; and that said person now requires that someone be appointed by the Court as the legal guardian for their personal and financial affairs. Unfortunately, a guardianship is an expensive undertaking that in some instances may not be able to resolve all issues depending on the facts presented.
Avoiding the need for a Guardianship requires the family and friends of the person with memory loss to act quickly and not delay seeking legal assistance to have their loved one and/or friend seek guidance in executing the following documents, if not previously executed by them:
- A Durable General Power of Attorney with broad gifting powers which allows the named agent(s) to take the necessary financial steps to protect the principal’s assets from the costs of long term care and potential federal and New York estate taxes. Being able to transfer/gift assets without limitations, create and/or terminate trusts, prepare and file Medicaid applications for the principal along with enrolling the principal in a pooled community trust are just a few of the numerous powers that can be given to the agent(s) so that they can act in the best interest of the principal as well as protect the principal from any potential financial elder abuse;
- A RLT and/or MAPT so as to avoid Probate upon their demise and allow others (successor Trustees) to manage the trust assets and income when and if they are no longer able to do so. The purpose of doing a MAPT is to create the five (5) year lookback period for Medicaid nursing home eligibility so that any assets and/or income from the trust are no longer counted as available resources and/or income for Medicaid nursing home eligibility; and the trust assets are no longer subject to any Medicaid claims and/or liens. The creator of the MAPT can not be the Trustee and the Trust’s principal can not be used for its creator. If income is allowed to be given to the creator it will be counted as income for Medicaid eligibility purposes. The MAPT like the RLT will avoid Probate upon the demise of its creator. The RLT does not protect the assets for Medicaid eligibility nor does it protect the assets from creditors in most instances. It is primarily a probate avoidance tool; and
- A Last Will & Testament (LWT) and other advanced directives such as a Health Care Proxy (HCP) should be executed by the person suffering memory loss as soon as possible, especially if they are not creating an RLT or MAPT.
Lastly, the individual’s IRA’s, 401K’s, Life Insurance Policies, Annuities should be immediately reviewed to ensure they have named primary beneficiaries and contingent beneficiaries. If the individual has IRA, 401K, Life Insurance Policies and Annuities the POA they execute should give their agent(s) the ability to do all transactions with respect to said assets including changing the beneficiaries thereof if it is in the best interest of the principal to do so. For example, if the beneficiary of the IRA is now incapacitated and in a nursing home and on Medicaid. Additionally, if the individual is married one should check to see if they are the beneficiary of any of their spouse’s accounts.
In conclusion, executing the necessary legal documents immediately after the manifestation of memory loss and/or an official diagnosis of dementia, Alzheimer’s, Lewy Body dementia is imperative to preserving the financial and personal well being of the individual in question.
Anthony J. Enea is the managing attorney of Enea, Scanlan and Sirignano, LLP of White Plains, and Somers New York. He focuses his practice on Wills, Trusts, Estates and Elder Law. Anthony is the Past Chair of the Elder Law and Special Needs Section of the New York State Bar Association (NYSBA) and is the past Chair of the 50+ Section of the NYSBA. He is a Past President and Founding member of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA). Anthony is also a Past President of the Westchester County Bar Foundation and a Past President of the Westchester County Bar Association. He is fluent in Italian. He can be reached at (914) 948-1500 or at [email protected].
