| Times Herald-Record
After a neurologist gives the devastating news that a loved one has dementia, the next appointment should be with an elder law estate planning attorney for advice on necessary legal steps to take.
Legal steps may include both review of current elder law estate planning documents and signing of new documents to cover what happens in case of disability or death.
Step One is for the person to sign or update as necessary his or her advance directives, which are documents that name people to make decisions in case of incapacity. These documents include Elder Law Power of Attorney, Health Care Proxy and Living Will.
The main benefit of advance directives is to avoid a guardianship proceeding, a court proceeding for people who are allegedly incapacitated. The judge determines the extent, if any, of the person’s incapacity. If the judge finds the person to be incapacitated, the judge appoints a legal guardian to manage the legal, financial and medical affairs of the incapacitated person. The government is in control. The legal guardian may have limited ability to save money from nursing home costs.
By signing advance directives while still capable, you choose the people you want to be in charge. You protect your autonomy and civil liberties. You keep the government out of your affairs.
In a Power of Attorney, you appoint people who will make legal and financial decisions. The Elder Law Power of Attorney has unlimited gifting powers that may help save money from going to nursing home costs even on the eve of needing a nursing home.
In a Health Care Proxy, you appoint people who will make medical decisions. In a Living Will, you express end of life wishes such as resuscitation, and artificial nutrition and hydration (feeding tubes).
Trusts give disability protection because a trustee can manage affairs in the trust if you are incapacitated.
Step Two is to review wills and trusts – the death planning. Wills are documents used in probate court if you die with assets in your name alone. Trusts avoid probate and save the time and cost of a court proceeding. The Medicaid Asset Protection Trust saves trust assets from going to nursing home costs after the assets are in the trust for five years and, starting April 1, 2021, protects assets from home care paid by Medicaid after the assets are in the trust for two and a half years.
Step Three is to learn that it is almost never too late to save money from nursing home costs. New York has the law of spousal refusal that protects more assets for the spouse at home if the other spouse applies for Medicaid to pay for nursing home costs that range between $12,000 and $20,000 per month. For single applicants, New York allows the Gift and Loan strategy that may save about half of the person’s assets from going to nursing home costs.
Bonnie Kraham is an attorney practicing elder law estate planning with Ettinger Law Firm, 75 Crystal Run Road, Middletown. She can be reached at 845-692-8700, ext. 119 or firstname.lastname@example.org. This column is intended to provide general information, not legal