How Dementia Has Influenced Estate Planning

According to 2024 Alzheimer Association stats, approximately 6.9 million Americans aged 65 and older are currently living with Alzheimer’s dementia, the majority (73%) being 75 or older. As an aging population grows, dementia has become an important concern for families, especially when it comes to estate planning.

Dementia is often misunderstood as simple memory loss, but its impact goes much deeper. It includes a range of progressive neurological diseases such as Alzheimer’s, vascular dementia, Lewy body dementia, and frontotemporal dementia, that impact the brain and body in many different ways. These conditions often lead to significant cognitive and physical changes, making it harder for individuals to manage decisions over time.

For parents and families navigating this journey, learning how dementia impacts estate planning can help. In this article, we discuss legal options and protections that can be put into place.

Now is the Time

Setting up an estate plan requires preparation and legal precision that might be difficult for those with dementia. Advanced dementia renders a person unable to remember family members, understand their financial situation and important documents, and create or modify an estate plan. Once the dementia has progressed that far, the only option is to file for guardianship.

Therefore, if an individual is in the early stages of dementia or experiencing mild cognitive impairment, estate planning is key. It’s important to establish critical legal documents while they are still able to make informed decisions. These documents include:

Durable Power of Attorney (POA): This document designates a trusted individual to manage financial responsibilities, such as paying bills, overseeing investments, and filing taxes.

Advance Healthcare Directives: These documents outline healthcare preferences, including instructions on treatment decisions and end-of-life care, reflecting the individual’s values and wishes.

Wills and Trusts: Living trusts and wills allow individuals to designate beneficiaries, protect assets, and reduce the risk of disputes among family members. Trusts, in particular, can provide long-term benefits, such as tax advantages and financial oversight.

Other Asset Protection Measures: People with dementia are often victims of financial abuse or fraud. Other protective measures include creating an asset inventory list, setting up automatic payments, planning for long-term care and working with a financial planner or estate planning attorney in San Diego like Hatley Law Group.

Understanding Capacity and Protecting Against Undue Influence

As dementia progresses, it becomes harder for people to fully understand the consequences of their decisions. This is known as “capacity”. When someone’s capacity is diminished, they may be vulnerable to undue influence, where another person manipulates them into making decisions they would not normally make.

Families should pay attention to signs that their loved one’s reasoning and cognition is slipping. Working with estate planning attorneys can help set up protections, like requiring medical evaluations or adding oversight for major decisions. These steps help ensure the person’s estate plan remains secure and fair.

Balancing Emotions and Legal Needs

Estate planning for someone with dementia isn’t just about paperwork — it’s also an emotional process. Families often face tough choices, like when to step in or how much independence to allow. Open communication and involving everyone in the planning process can help ease some of these challenges.

Remember that people with dementia aren’t being difficult — they’re dealing with a cognitive disorder that changes how they process information and communicate. By approaching this with understanding, families and professionals can work together to create a plan that respects their loved one’s dignity and protects their future.

Peace of Mind is a Beautiful Thing

It’s difficult to imagine a future where you, your parents, or grandparents may suffer from dementia, but it’s a reality that changes the way families approach estate planning. Starting early, recognizing the importance of decision-making ability, and putting safeguards in place can make the process smoother. By planning thoughtfully, families can protect their loved one’s wishes and assets while finding some peace of mind during an otherwise difficult time.

Do you have a history of dementia in the family? If so, contact us today. At Hatley Law Group, we specialize in helping families navigate estate planning with care, providing clarity and support every step of the way.