Ask the Expert: LawyerLisa Talks Elder Law

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In this August’s Ask the Expert, Attorney, Lisa Hostetler Brown, founder of LawyerLisa, and certified elder law specialist, shares insights to help us and our loved ones navigate the elder law and long-term care maze by discussing issues related to capacity and powers of attorney.

Concern:  My family member has been diagnosed with dementia, and now they need help managing their finances.  Do I need a court’s permission to help my family member manage their finances?

Expert Advice:  First, your family member may already have executed a durable power of attorney before the dementia diagnosis which might give you or someone else the power you need to help this person manage their finances.  If your family member was smart, planned appropriately, and did so with an experienced elder law attorney, their pre-existing durable power of attorney may be good enough.  However, durable powers of attorney drafted by non-elder law attorneys can often neglect certain powers which are necessary to engage in asset preservation planning.  Durable powers of attorney which do not include the necessary powers could cost you and your family a significant amount of money, time, and effort.

Even if your family member does not already have a durable power of attorney, your family member may still be able to sign legal documents.  A dementia diagnosis does not necessarily mean that a person is unable to sign legal documents.  People often assume that a physician’s dementia diagnosis means that a person does not have legal capacity to sign documents.  That is not the case.  An experienced elder law attorney can help you determine whether this family member has legal capacity to execute a power of attorney.  A dementia diagnosis from a physician is not conclusive in determining whether a person has legal capacity to sign documents.

If an elder law attorney does determine that your family member has legal capacity, your family member can simply execute a durable power of attorney appointing trusted individuals to manage their finances for them.  As a bonus, having a consultation with an elder law attorney who can take a close look at your loved one’s financial situation has much more to offer than just a durable power of attorney.  The elder law attorney may be able to present you and your family with a plan which could save your family tens of thousands of dollars in care costs and preserve a large portion of your loved one’s assets for future generations and for current care needs.

However, if your family member does not have capacity to sign a durable power of attorney, you will likely need to file with the probate court for a conservatorship in order to get authority to assist your loved one with their finances.  This process, if it is uncontested, takes at least a few months, and the court will require you to provide a ton of information, and at least one hearing will be required to have a conservator appointed for your loved one.  In the meantime, bills will continue to come due and your loved one’s financial situation could continue to deteriorate.  Having to resort to a conservatorship also means that your options for asset preservation will likely be extremely limited.  Once someone is appointed as conservator, the work still isn’t over.  The court will require the conservator to file yearly reports once the conservator is appointed, and various actions will likely require court approval to be done by the conservator.

The bottom line is that if your family member is willing and able to do planning in advance of becoming incapacitated, it can save tons of time, money, and extra work.

Concern: I know I need to create or update my estate planning documents, but I don’t know who to choose as my agent or agents.

Expert Advice:  Choosing the right agent to serve for you in the event you cannot make decisions for yourself can be a daunting decision, but it is an extremely important decision.  First of all, it is important to pick agents and back-up agents.  I normally recommend having 3 agents named in your documents.

For health care agents, remember that this person decides where you will live.  They also make important end of life decisions related to extending your life through artificial measures.  Your health care agent will act if you are unable to competently make and communicate your wishes.  It is a good idea to communicate with your agent in advance and let them know what your desires are for end of life care.

Financial agents, such as an agent under a durable power of attorney or a successor trustee of a trust will be responsible for your bills and finances to varying degrees.  The agent you choose should be someone who is financially responsible and is not experiencing their own financial issues, such as bankruptcy, divorce, or unemployment.  This is a role where birth order may not be the best indicator!  If you don’t have a trusted family member to serve in this role or enough back up agents, there are other options to consider to avoid a Conservatorship action down the road.

Remember, each situation is unique.  You will need to utilize the plan that is best for you and your family.  But one thing is true for everyone—having a plan in place before you need it can make a world of difference.

To submit your Elder Law Concern to Ask the Expert, please email your Concern to Melissa@LawyerLisa.com.  All Concerns are subject to re-writing by the Expert and all Expert Advice is general in nature.  For legal advice regarding your situation and to have your specific questions answered, please contact LawyerLisa, LLC at info@LawyerLisa.com to schedule a consultation.  For additional information, please visit https://www.LawyerLisa.com/lcp  Lisa Hostetler Brown is a Certified Elder Law Attorney, certified by the National Elder Law Foundation, ABA accredited.