Managing Legal Affairs for Someone with Dementia

A dementia diagnosis doesn't necessarily mean someone cannot make important decisions right away; however, as symptoms progress, they would be unable to oversee their affairs. Being prepared is vital with the correct legal documents and LTC Insurance.

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Managing Legal Affairs for Someone with Dementia
5 Min Read September 12th, 2022

A diagnosis of the onset of dementia will inevitably create a series of difficulties, from assistance to housing to long-term health care. The challenges are not only for the person diagnosed but also for family members. But one of the primary difficulties will be managing the legal and financial affairs of the person with dementia. Initially, the individual may be able to continue managing their affairs, but as the dementia progresses, they will need someone else to act in their best interests. 

This won't be easy for all parties involved.

Indeed, the time to plan is when you are healthy; however, often, people fail to plan. If someone close to you or a family member has begun to exhibit the early stages of dementia, the best thing to do is to plan in advance. This will eliminate stress as the disease progresses and allow all parties involved to make joint decisions for what may eventually follow. 

Legal Affairs

An important first step is preparing legal documents that clearly state the individual's decisions and wishes. These documents should indicate someone authorized to make any necessary financial or health care decisions, especially those involving long-term care. The person diagnosed with dementia should participate in any health care or legal planning if they are mentally capable and able to sign the necessary documents.

It's important that you consult a family attorney specializing in elder law, who can help you navigate and understand the laws of the state where you and the person needing assistance reside. Look for an attorney specializing in issues that affect the elderly or infirm, as he or she will be able to anticipate some of the specifics you may end up dealing with. Documents that you will want to get proper information about include:

Power of Attorney

A power of attorney affords a person with the onset of dementia the possibility to select someone to make any necessary legal decisions when they cannot. 

This can prove to be fundamental, especially if the person with dementia has been taken advantage of. A power of attorney will allow you to act on their behalf legally, from small claims court to legal questions regarding important property or financial portfolios. Wherever a legal decision is necessary, you will be able to protect the person needing assistance.

Health Care Power of Attorney

This document allows the affected person the possibility to select someone to make all decisions regarding their health care. This will include medical treatments, doctors and health care providers, and any end-of-life choices to be made.

Living Trusts

A living trust allows you to create a trust and then a bank or trusted individual to invest and manage all assets when they can no longer do so.

Living Will 

This document permits an individual to make all decisions regarding life support.

Estate Will

This is a standard will that names someone to be the executor of their estate once they die and names the beneficiaries of the will. 

Managing Financial Issues

This is equally as important as legal issues and goes hand in hand with legal questions and decisions. You must examine the finances of the person with dementia or of your family if the ill person is a family member. Because there is considerable cost involved when caring for a person with dementia, you need to assess payment options for medical and living expenses with the progression of the disease.

Verify All Financial Assets

You need to verify the existence of property deeds, bond certificates, insurance policies, current bank account statements, and benefits or a pension. 

Evaluate Potential Expenses

Make a list of probable expenses for the future. These will include ongoing medical care, prescription pharmaceuticals, personal supplies such as dietary supplements or incontinence necessities, and specific care services, including a nursing home or assisted living.

Get Help from a Professional

Consider consulting an estate attorney, an accountant, or a financial planner to manage investments, potential income sources, and any tax deductions.  

What If Dementia Is Advanced and a Person Cannot Sign a Power of Attorney? 

If the person you need to manage affairs for has not planned for a medical emergency such as dementia, this can result in legal mayhem. Perhaps dementia progression has progressed rapidly, and there was no advanced planning for long-term care or ongoing medical issues. 

If dementia has advanced to the point where the individual can no longer sign a power of attorney or refuses to sign, it will be problematic for everyone in the family.

Power of attorney issues regarding dementia will complicate care for the person suffering from the condition. Inability or refusal to sign necessary legal documents can leave you with very few options, and the choices available may not be in the best interest of the person you need to manage affairs for.

Even if you are able to coerce them into accepting your assistance, that would be considered an undue influence, and a judge may invalidate a power of attorney. Instead, petitioning the court for guardianship becomes the only option. In some states, petitioning for guardianship can be very difficult and time-consuming.

The complications of aging and declining health should encourage you to plan before these problems make it difficult for your family. Legal paperwork, Long-Term Care Insurance, and a discussion with your family should happen well before you get older and experience these problems.

Inability to Sign a Power of Attorney

If a person with dementia no longer recognizes friends or family members and has no memory or awareness of assets or decisions, then they are no longer considered mentally competent to sign legal documents. In this case, your option is to apply to the court for guardianship or a formal conservatorship. 

In this case, the court will appoint a guardian to manage the care and maintenance of the person with dementia. This situation entails expensive legal fees and is time-consuming. You can use your marital status to access co-owned property and assets if you are a spouse.

Remember, even if you can coerce the person into accepting your assistance, that would be considered an undue influence, and a judge may invalidate a power of attorney. 

The Person is Still Mentally Competent, but Will Not Sign a Power of Attorney

The person can still make decisions but has not done estate planning and will not establish co-owned financial accounts or sign a power of attorney. This is problematic. You can suggest a standby guardianship. If they refuse, you will have to wait until the person can no longer make decisions for themselves and request the court to grant guardianship.

The Person Has Planned Correctly

The person you need to manage affairs for completed all the necessary powers of attorney before dementia disables them. This is the best-case scenario when the person can actively make preferred choices.

Be Proactive

Most everyone should have a health care power of attorney, a will and a living will before they get older and suffer from health or cognitive problems. A little advanced legal and financial planning can save a family financial and emotional stress. 

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About the Author

John Lewis is a frequent writer and contributor to top online legal publications and blogs. He has dedicated his career to helping those of different social, economic, or cultural backgrounds access justice and gain confidence in the legal system.

LTC News Contributor John Lewis

John Lewis

Contributor since September 12th, 2022

Editor's Note

Many of us know that aging brings financial problems, concerns for quality care options, and burdens placed on family members. However, the legal issues regarding aging often get lost in the shuffle.

Before you retire and get older, you should start getting paperwork together. These include the wills, POAs, and other documents that an attorney get easily put together for you. Many of these forms can be obtained online with easy instructions if you have an uncomplicated life. It is always best to review forms with an attorney.

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Is a Reverse Mortgage Helpful?

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