How & Why You Should Change Your Estate Plan If Your Spouse Has Dementia

Your spouse has dementia. You know you need to make some legal changes. However, you may be uncertain about what to do or how to do it. Here are a few tips.

Change Your Will or Trust

Change your Will if it leaves everything to your spouse. Even though your spouse may have a progressive disease, you could still die first. You are putting your assets at risk if you leave them directly to your spouse. At your death your spouse may have to enter a long term care facility. Assets held directly in your spouse’s name will disqualify your spouse from receiving financial help from Medicaid, and leave them vulnerable to financial exploitation. So, as you can see, leaving everything to your spouse actually makes your spouse less financially secure.

Instead, leave your assets in Trust for your spouse. If you die first the Trust would be created within your Will. An attorney writes the terms of the Trust into your Will. Important decisions for you to make are who you name as Trustee, and who gets the assets remaining in the Trust at your spouse’s death. So long as your spouse lives, the money would be held for their exclusive benefit, but your spouse would not own anything. That means you have reduced the risk that someone could take advantage of your spouse or that their ownership of assets would preclude financial assistance for long-term care.

Change Ownership of Assets

If you die and your assets are owned jointly with your spouse, or your spouse is the named beneficiary, then your spouse will own the assets. And note this: This is true even if your Will says otherwise, such as directing the assets to be held in Trust for your spouse. So, in order for you to be able to direct your assets into a protective Trust, you must hold title to the assets in your name alone or in your own individual Revocable Trust. The Revocable Trust is best because it avoids probate when you survive your spouse and the assets are paid out to your children or other family. Probate would only be necessary to set up the Trust for your spouse if he or she survives you.

Change Your Power of Attorney and Health Care Directives

If your spouse has dementia you need to remove him or her as your appointed Power of Attorney. It is best to name at least two alternates.

Also, you really, really, need to get your spouse to name you as their Power of Attorney while they can. Again, there should be two alternates. The document under which your spouse gives you Power of Attorney should have extensive powers.

Walt Shurden
Board Certified Elder Law Attorney