As parents grow older it seems that roles reverse. While they spent much of their time caring for us, we now have the responsibility to care for them. The Alzheimer’s Foundation of America estimates that nearly 5.1 million Americans may be diagnosed with this disease in their lifetime and it has become more and more likely that people will be diagnosed with this disease as they become older. This huge statistic impacting our aging senior population tells us that we all need to be prepared to address advanced estate planning with our parents as they age and before it is too late.
One question that we hear our clients and their children ask is: Can my mom or dad make a power of attorney if he or she is diagnosed with Alzheimer’s disease? This is a good question. We encourage you, and all of our clients, to plan ahead and address estate planning documents before the diagnosis comes into play. The reason why is simple. Once your mother or father has been diagnosed with Alzheimer’s Disease, they may no longer be able to make decisions or have the capacity required to develop estate planning documents. In order to avoid this, encourage your parents to create their power of attorney and other critical estate planning documents before any disease such as Alzheimer’s or dementia is even mentioned by healthcare professionals.
For your parents to select who their power of attorney is, they need to understand what this legal document means. A power of attorney allows the selected person, often referred to as an agent or attorney-in-fact, to make financial decisions regarding your parent. The durability aspect of a power of attorney allows the document to be used in times of capacity and incapacity, however the power of attorney can also be crafted so that the authority only triggers when a parent is determined to be incapacitated. This is called a “springing power of attorney.” In that case, a parent will also need to decide who determines when they are incapacitated, whether it be their primary doctor, attending physicians, or perhaps a group of people they know and trust (called a disability panel). A springing power of attorney may be a good option for parents who still wish remain independent in their financial affairs. In other circumstances where a parent is much older or capacity issues are more likely on the horizon, a regular durable power of attorney might be more practical.
This authority does not replace your parents own ability to continue to have control or manage their finances. Rather, a power of attorney allows the named agent to have a duplicate power and co-existing authority. In other words, the agent will be allowed to act and make financial decisions on behalf of your parents but will not replace their own authority to act. This will certainly be a good option if your parent has capacity but has difficulty managing things or getting around and could use a “helper” for financial chores. However, be mindful that declining capacity to manage the financial tasks of daily living can be one of the first noticeable signs of Alzheimer’s. For these parents, or for those who have concerns they may be genetically pre-disposed to Alzheimer’s, creating a trust to manage finances provides stronger protections.
Lastly, remember the power of attorney will not cover decisions regarding your parents’ health. That means your parents will also want to create a separate health care power of attorney, known in California as an advance healthcare directive. In conjunction, a living will allow them to declare whether or not they want to be placed on life support or receive other types of life sustaining measures.
It is important for you and your parents that they engage in this type of planning sooner rather than later. If your parent receives a diagnosis such as Alzheimer’s Disease and does not have a power of attorney in place this process can become much more complicated for you and your family. Be sure to sit down to meet and speak with your lawyer as soon as possible. If your parents are difficult to approach about the topic, click here for a sample letter (or email) you can send to them. This is not something that you want to push to the side for tomorrow. Make a plan right now to avoid any anxiety or unrest down the road.
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