Planning For Dementia

Mike Wallace, the well-known CBS newsman, died last week at the age of 93. While Mike had been vocal about his battle with depression, his son, Chris Wallace, revealed in a recent New York Times interview that Mike also suffered from dementia. Of course, well known figures like Mike Wallace are not the only individuals susceptible to dementia— some statistics claim that dementia will affect one in eight baby boomers after they turn 65. Taking the proper estate planning steps before dementia sets in is imperative as many estate planning formalities cannot be achieved by an incapacities individual. A few issues all individuals should consider, regardless of his or her current mental condition, are below:

• A health care proxy (also known as a health care agent or health care power of attorney) is a legal document that allows another—your agent— to make medical decisions in your stead in the event you know longer have the capacity to do so. The agent also has access to your medical records.    
• A living will, also known as an advance directive, is a written statement in which you express your final wishes. These documents typically cover pain relief and medical treatments such as surgery, resuscitation, ventilators, and feeding tubes.
• A durable power of attorney authorizes a designated individual to act as your agent in a number of financial and legal situations. The documents can become effective at the time you sign it or in the event you become incompetent (this is known as a springing power).
• Living trusts, also known as revocable trusts, can be used in conjunction with a durable power of attorney to help give another the ability to take over your finances if the need arises. You simply create a trust designed for your benefit with the intent to give the trustee the ultimate management of the funds and ability to distribute the trust assets for your care.

See Deborah L. Jacobs, Mike Wallace Death Underlines Need to Prepare Financially for Risk of Dementia, Forbes, Apr. 8, 2012.