If your spouse has been diagnosed with dementia, you are likely wondering how it affects your estate planning. Is long-term care in the future? If so, how will you pay for it? Can you update your estate plan?
Depending on the level of dementia, your spouse may be able to handle some or all aspects of his or her planning. A lawyer can work with you and/or your spouse to minimize the likelihood of these changes facing disputes later.
Regardless of the level of dementia, here are some things you should consider doing as part of your own planning.
Modify your living will and power of attorney
If you listed your spouse as the person to make major decisions on your behalf should you become unable to do so, you will need to update your power of attorney. If you do not have one, you should create one as soon as possible.
If your spouse is able to do so, he or she should name you as a decision-maker and also name an alternative in case something should happen to you.
Create or rewrite your will
If you die without a will, all of your money will go to your spouse. It may seem coldhearted to write a will in order to avoid this, but if you die first, you risk someone who has dementia suddenly having control of money and assets he or she does not know what to do with.
Moreover, if your spouse must enter long-term care, it may be necessary to first sell many assets solely in his or her name.
Fortunately, there are options available to care for your spouse without putting their finances and safety at risk. For example, you can set up a trust so your spouse does not own anything but can benefit from assets in the trust.
Re-title jointly owned property
If you own something such as a house or car with your spouse, meaning that both of your names are on the titles, change the titles so that only you own the property. This is because no matter what your will or trust says, anything that is in your spouse's name as well will go to him or her if you die first.
Proper planning can save money, stress and heartache
Having a spouse with dementia is extremely difficult. Not having an estate plan in place makes many of the problems, financial and otherwise, more difficult.
Fortunately, creating or modifying an estate plan is not as difficult as you may think, and it is affordable, particularly considering the financial consequences of not having a plan in place.