Planning at the Time of a Dementia Diagnosis

dementia

Most patients and their family members are not entirely surprised when a diagnosis of dementia is made by a physician. The patient and the family member have probably been noticing subtle changes for some time. However, when these suspicions are confirmed by a diagnosis, the patient and the family members need to carefully assess their situation and confirm that appropriate planning is done to ensure the best care without creating a financial crisis. When the diagnosis of dementia is made early in the disease process, the patient can take part in the planning process allowing the family to map out the type of care to be utilized at the various stages of the illness.

Most people prefer to receive care in their own homes. Typically family members are the initial caregivers for their loved ones. As care needs increase, family members can quickly become overwhelmed. Initially the family may decide to hire caregivers to help with the care in the home setting. Families need to understand the differences between nurse registries and home health agencies when contracting for care. When hiring a home health agency, the contract is between the agency and the client and the home health aides and nurses are employees of the agency. Nurse registries act to match a patient with an independent home health aide or nurse. Once the match is made, the contract is between the client and the aide or nurse individually. It is critical that the client understand who will be responsible in the event of theft or negligence or if the worker becomes injured on the property. Families need to understand the amount of supervision of the worker that the company provides. If the company does not supervise the worker and the patient has dementia, the family must closely watch the situation to ensure that services are properly provided. Different companies have different contractual provisions and protocols for services. Elder law attorneys should be familiar with the contract types and be able to advise families about the choices available. Some people prefer to avoid the company altogether by hiring unlicensed individuals as caregivers. In addition to risks inherent in hiring someone who has not met the background checks of an agency or registry, families need to understand their legal obligations concerning payroll and unemployment taxes in these situations. I am aware of an individual who was blackmailed when she discharged a caregiver that she was paying “under the table.”

Some families are surprised to learn that when a person needs 24 hour care, that home care is the most expensive option for obtaining that care. Generally, it will cost in excess of $150,000 per year to have around of the clock home care. So families need to consider what funding sources they have to pay such costs. If the financial situation does not support the cost of homecare, other options must be considered.

If the patient has a long term care insurance policy, it should be carefully reviewed to determine what will trigger the policy, and what are the daily and lifetime policy limitations. For patients who are veterans or their spouses, veterans’ benefits should be analyzed.

When an early diagnosis is made, the patient will have an opportunity consider changes to the estate planning documents in place. If a patient can pay the cost of care from income indefinitely, then the typical revocable living trust planning is appropriate. However, if a family cannot pay for care from income without impoverishing the spouse, the documents need to revised in order to allow maximum flexibility for planning to utilize government benefits such as Veterans’ benefits or Medicaid. Many families wait until a person with dementia is too impaired to make changes. Then, whatever documents are in place must stay in place. Worst of all is the situation when no documents are in place.  When that happens a guardianship is inevitable.  Guardianships are a costly legal process that can sometimes be avoided if appropriate documents are in place.   If the documents do not specifically allow for planning for government benefits, such planning cannot be done legally.

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