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Alzheimer’s Threat Makes Incapacity Planning a Must

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Once you reach the age of 67, your life expectancy is 85 years if you are a man, and it is 87 years for a woman. You become eligible for your full Social Security benefit when you are between 66 and 67 depending on your birth year, so these numbers paint a compelling picture.

If you live long enough to collect your Social Security benefit (and most people expect to do so), the odds say that you will live into your mid-80s. This is an inconvenient truth, but when you attain octogenarian status, a threat will be looming large.

Alzheimer’s Disease

We have all heard of Alzheimer’s disease, but some of the facts about it are a bit surprising to most people. The Alzheimer’s Association does a lot of great work to educate the public, and they also provide hands-on resources for families that are touched by the disease.

They have found that over 30 percent of people that are 85 years of age and older have contracted Alzheimer’s. This is a very significant figure, and there are other underlying causes of dementia, so this is something that everyone should take seriously.

Incapacity Planning

If you do nothing to prepare for incapacity, the state could be petitioned to appoint a guardian to act on your behalf and you would become a ward of the state. No one wants the government to get involved in this type of thing, but when there is no recourse, a guardianship is necessary.

You can prevent this outcome if you take the right steps in advance when you are developing an estate plan that includes an incapacity planning component.

From a financial perspective, if you have a living trust, you would act as the trustee while you are living. When you establish the trust, you can name a disability trustee that would administer the trust in the event of your incapacity.

To account for property that is not held by a trust, you name a representative to act on your behalf in a durable power of attorney for property. There is also a springing durable power of attorney that would only go into effect if you become incapacitated.

Advance directives for health care should be part of your plan as well. A durable power of attorney for health care or health care proxy can be utilized to empower someone to make medical decisions for you if you cannot make them for yourself.

Another directive that should be included is a living will. In this document, you state your preferences regarding the use of life-support, and you can itemize each different type of life-support method if you choose to do so.

Your health care representative would not make decisions that you have already made in advance in your living will.

The Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 to protect patient privacy. You should include a HIPAA release to give your agent access to your medical records.

Long-Term Care

Nursing home costs are another consideration. A significant percentage of people with Alzheimer’s disease require nursing home care, and Medicare does not cover custodial care.

Medicaid does pay for long-term care if you can gain eligibility, but it is a need-based program, so there is a low $15,900 asset limit in New York in 2021. You can convey income-producing assets into an irrevocable trust to prepare yourself for Medicaid eligibility.

The principal would no longer be accessible, but you could receive distributions of the trust’s income until and unless you apply for Medicaid. Advance planning is necessary because you have to fund the trust at least five years for you apply for Medicaid coverage.

Take Action Today!

We are here to help if you are ready to work with a Staten Island elder law attorney to develop a plan for aging that culminates in the passing of your legacy. You can send us a message to request a consultation appointment, and we can be reached by phone at 332-456-0500.

 

Neil O'Reilly
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About Neil O'Reilly

Cornelius (“Neil”) J. O’Reilly is an attorney whose practice is focused in the areas of Estate Planning, Estate Administration, and Business Succession Planning. His main goal is to demystify Estate Planning for his clients so they can gain peace of mind knowing that they have provided for their families by passing along their hard-earned wealth and by minimizing the stress they will experience if the client becomes incapacitated or dies. He has created the firm with the belief that an estate plan should be driven by the unique needs and desires of each unique client. That’s why there are no “cookie cutter” plans or canned solutions offered to any client. Instead, Neil helps clients identify their goals and then builds estate plans based on those goals.