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Caring for Dementia: Legal and Financial Planning

After a diagnosis of dementia, you may have a lot of questions about finances. Dementia is a long-term illness. This means that costs for managing it are ongoing. The costs are likely to go up over time as you need more care. The sooner you start planning, the easier it will be for you and your family to manage future needs.

Gathering your financial information

The first step in making a financial plan is to gather information such as: 

  • A list of your assets, such as a home and car

  • Copies of deeds and titles

  • Statements for bank and investment accounts, debts, loans, and bills

  • A list of income, such as pensions and Social Security 

Getting help

The next step is to get professional help. Making these kinds of decisions is a large task. And it can be hard to understand all the legal details involved. You may want to work with a financial advisor and a lawyer. They can help you put together all the documents you will need and complete the process.

Planning for the future

As you plan for the future, you may need to have help with your finances. There are two primary ways to assign someone to manage your finances when you are not able to:

  • Durable power of attorney. This is a legal document you can use to assign a trusted person to take care of your finances and property. The person is called an agent. You can also choose a bank or other institution to be your agent instead of a single person. You can choose what the agent will be able to do. A durable power of attorney ends when it’s revoked by you, or when you are deceased.

  • Living trust. If you have an estate worth a lot of money, a living trust is an option. This is a legal document that lets you choose people to manage your money and property while you are alive. Living trusts are custom written for each person. You will need to work with a financial planner.

If you receive compensation and pension from VA or other federal benefits, you may also need to assign:

  • A fiduciary. This is a person who can receive and manage a Veteran’s VA benefits for him or her. You can pick a person to apply for the role. The person must then be approved by the VA. The role is active when the VA is notified that you are no longer able to manage your own benefits. The VA may be notified with medical documents from a hospital. Or the VA may be informed by documents from a court. Learn more about the VA Fiduciary Program.

  • A representative payee. This person has the same role as a fiduciary, but for other federal benefits. The person can manage your benefits from Social Security. And he or she may manage state agency benefits. To learn more about the duties of this role, read Managing Someone Else's Money: Help for Representative Payees and VA Fiduciaries.

Distributing Your Estate After Your Death

There are several ways to distribute your estate after death, such as:

  • Making a will. This is a legal document that says who you want to have your property, money, and other goods after death. The people you choose to receive things from your estate are called beneficiaries. You also choose an executor. An executor manages the will after your death. This role can go to a trusted person. Or it can go to a bank or other institution.

  • Creating a living trust. A living trust is mainly used to manage a person’s estate while he or she is alive. But it can also include instructions for after death. A living trust may allow your loved one to avoid probate. Probate is a court process for distributing the estate of someone after death.

  • Assigning beneficiaries. You can choose people to be beneficiaries of some of your accounts. This includes certain bank or investment accounts. This lets the money go directly to the people you choose after your death.

Author: StayWell Custom Communications
Last Annual Review Date: 7/1/2020
Copyright © The StayWell Company, LLC. except where otherwise noted.
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