Estate Planning For A Person With Dementia

Estate planning is important for everyone, but it is especially vital for a person living with dementia, Alzheimer’s, or a similar disease. A newly diagnosed individual should finalize their estate plan right away so that he or she can fully engage in the estate planning process.

What is testamentary capacity?

Testamentary capacity is the mental state that a person must possess at the time of creating a will for the document to be valid. Most of the time, if an individual with dementia can understand the importance and meaning of a legal document, he or she has the legal capacity to execute (sign) it.

Powers of attorney

A person with testamentary capacity should consider executing a power of attorney. There are several common types of power of attorney, and, together with an estate plan, they can protect you, your assets, and your financial obligations should you become incapacitated.

  • The first type is a general power of attorney. This approach allows the person designated, known as the "attorney in fact," to make legal or financial decisions on your behalf. A general power of attorney is not dependent upon your mental or physical state.
  • The second type is a durable power of attorney, which allows the attorney in fact to conduct business on your behalf in the event you become incapacitated. This is a common choice for those who want to ensure their business can be conducted should they become unable to make their own decisions.
  • The third type is a durable power of attorney for health care, sometimes known in Michigan as an “advanced directive" or "health care proxy". This choice limits the decisions the attorney in fact can make to health care-related matters only and becomes valid only if you are unable to make health care decisions on your behalf.

What is a conservatorship?

If a person living with dementia is not able to execute a power of attorney document, it may be necessary to seek a conservatorship.

A conservatorship is a court proceeding in which a probate judge appoints a person to assume legal responsibility for a person who is unable to make his or her own decisions.

Typically, conservatorships are established to protect formerly competent adults who lose their ability to care for themselves properly. Conservatorships are common in cases where the individual is living with dementia or is otherwise physically or mentally incapacitated. A conservatorship may be necessary if a person is unable to manage his or her business affairs or property.

The conservator oversees the appointed individual’s property and assets. He or she must use the property for the care, support, and benefit of the individual and his or her dependents. A conservator may not use assets for his or her benefit.

Help is available

The estate planning attorneys at O’Reilly Rancilio are available to answer your questions. To learn more, please call 586-726-1000 or visit our website.