Planning at the Time of a Dementia Diagnosis

Most patients and their families are not entirely surprised when a physician makes a diagnosis of dementia. The patient and family have often noticed subtle changes for some time. However, once those suspicions are confirmed, the family’s decision-makers should carefully assess the situation and make sure appropriate planning is completed.

The goal is to obtain the best possible care without creating an avoidable financial crisis. When dementia is diagnosed early in the disease process, the patient may still be able to participate meaningfully in the planning process and express personal preferences about care, finances, and future decision-makers.

Planning for Care at Home

Most people prefer to receive care in their own homes. Family members are often the first caregivers for a loved one with dementia. As care needs increase, however, family caregivers can quickly become overwhelmed.

The family may initially decide to hire caregivers to help provide care in the home. Before entering into an agreement, families should understand the differences between home health agencies, nurse registries, and caregivers hired privately.

If the company does not directly supervise the worker and the patient has dementia, the family may need to monitor the arrangement closely to ensure that services are being provided safely and properly.

Different companies use different contracts and service protocols. An experienced elder law attorney can review the arrangement and help the family understand the legal and financial responsibilities involved.

Risks of Hiring a Caregiver Privately

Some families try to avoid agencies and registries by hiring an unlicensed individual directly. This approach may expose the family to additional risks.

A privately hired caregiver may not have completed the background checks, training, licensing requirements, or insurance reviews used by an established agency or registry. The family may also become responsible for payroll reporting, employment taxes, unemployment taxes, workers’ compensation issues, and other employer obligations.

It can be easy for a family to fall into the trap of making informal, unreported payments without understanding the legal and tax consequences.

The Cost of Around-the-Clock Home Care

Families are often surprised to learn that when a person needs twenty-four-hour care, remaining at home may be the most expensive care option.

Around-the-clock home care can cost more than $150,000 per year, depending on the level of care required, local rates, scheduling needs, and the type of caregiver arrangement.

Families should carefully evaluate the financial resources available to pay these expenses and determine how long those resources may last.

Review Available Funding Sources

If the patient owns a long-term care insurance policy, the policy should be reviewed carefully. Important questions include:

• What conditions trigger eligibility for benefits?
• Is there an elimination or waiting period?
• What is the daily or monthly benefit?
• Is there a maximum lifetime benefit?
• Does the policy cover care at home?
• What documentation must be submitted?

Veterans and surviving spouses of veterans may also have access to certain benefits. Eligibility should be evaluated as part of the family’s broader financial and care plan.

Review Estate Planning Documents Early

An early dementia diagnosis may give the patient an opportunity to review and update existing estate planning documents while the patient still has sufficient legal capacity.

Important documents may include a will, revocable living trust, durable power of attorney, healthcare surrogate designation, living will, and other advance healthcare directives.

A durable power of attorney is especially important because it identifies who may handle financial and legal matters if the patient later becomes unable to act independently. The document should provide sufficient authority to address future care needs, asset management, public benefits, and long-term care planning.

Learn more about the role of these documents through estate planning with Burzynski Elder Law.

Planning for Medicaid and Veterans Benefits

If a patient can pay indefinitely for care from income and available resources, traditional revocable living trust planning may remain appropriate.

However, if paying for care could impoverish a spouse or exhaust the family’s savings, the documents may need to provide greater flexibility for lawful planning involving Medicaid, veterans benefits, asset protection, and long-term care.

Proactive Medicaid planning can help families understand eligibility rules, protect the financial security of a spouse, and prepare for possible nursing-home or long-term care expenses.

Why Timing Matters After a Dementia Diagnosis

A dementia diagnosis does not automatically mean that a person lacks the capacity to sign legal documents. Capacity is generally evaluated in relation to the particular decision or document involved.

However, dementia is progressive. Delaying legal and financial planning may cause the patient to lose the opportunity to choose who should act on their behalf, where they would prefer to receive care, and how available resources should be used.

Early planning allows the patient to remain involved and gives the family a clearer road map for future decisions.

A Coordinated Life Care Planning Approach

Dementia planning involves more than preparing legal documents. Families may need help evaluating care providers, understanding contracts, reviewing insurance, coordinating benefits, anticipating future housing needs, and supporting overwhelmed caregivers.

Burzynski Elder Law’s life care planning approach brings legal planning, benefits coordination, asset protection, and elder care advocacy together in one coordinated plan.