In addition to managing the day-to-day care of a person with Alzheimer's disease, caregivers will likely also need to plan for the patient's future legal and financial issues. People in the early stages of Alzheimer's should be encouraged to participate in the process. The following discussion outlines basic matters that need to be addressed.
There will come a time when the person with Alzheimer's can no longer manage his or her affairs. Do not assume that you'll have advance notice. Alzheimer's disease is unpredictable, and the person whose cognitive problems seem mild may unexpectedly make irrational decisions with disastrous consequences. If possible, legal documents should be executed while the person is still competent.
The issue of legal competence is complex. Essentially, all adults are presumed competent to make decisions. Incompetence, which can be determined only by a court, is usually based on a person's functional abilities, not simply on the basis of diagnosis. What's more, incompetence can be difficult to prove. Poor business sense and memory lapses, for example, are not sufficient evidence of incompetence.
A legal document called a durable power of attorney is usually the most straightforward way for a person to grant another person (generally the caregiver) the power to make decisions on his or her behalf regarding property, residence, and other financial affairs. A durable power of attorney also permits the person to delegate certain responsibilities that are proving difficult, such as managing money or paying bills.
The authority that is handed over can be very narrow or quite broad. For example, you might give someone the authority to sell your car or to make all financial decisions, including selling your home, managing your assets, and dealing with the Internal Revenue Service. The durable power of attorney can be written so that it starts as soon as it's signed, or it can go into effect at a future point in time, for example, if you become incapacitated.
A trust is another method of authorizing an individual or institution to manage someone's affairs. A trust is more far-reaching and complex than a durable power of attorney. Trusts allow you to officially gather assets, including a house, money, stocks, and so forth, and place them in a legal entity. While you're alive, you are the trust's beneficiary. You may control distributions yourself or through trustees elected to carry out your wishes at a time or point that you specify. When you die, the trustees distribute remaining assets to the other beneficiaries whom you chose. The wishes you relay through a trust can take effect today, if you like, or upon a triggering event, such as when you can no longer handle your own affairs because of mental or physical incapacity.
Executing a durable power of attorney or trust is far simpler than trying to establish a guardianship (also called conservatorship or committeeship), which requires court hearings and proof of incompetence. Some family lawyers are willing to handle the necessary legal documents. If yours is not, he or she may refer you to another lawyer. AARP or the Alzheimer's Association can also recommend an attorney in your area who's experienced in elder law.
An advance directive for health care should also be prepared. Although a living will is the best-known document of this type, people with Alzheimer's disease and their families should be aware of its narrow application. Living wills apply to terminal illnesses, which may exempt Alzheimer's disease and many other conditions. The living will can be interpreted different ways, and some states may not permit the withdrawal of life-sustaining treatment, such as artificial feeding. In contrast, the durable power of attorney for health care can apply to all medical situations, not just terminal illness. A person designates a surrogate to make medical decisions on his or her behalf.