How to Plan Ahead in Case a Loved One Has Dementia

Have the conversation about dementia, says The Tribune-Democrat’s recent article entitled, “Dealing with dementia | Planning ahead: ‘Have the conversation.’” Next, get the legal documents and define the future care. Note that the documents’ provisions are ineffective, until the person cannot make their own decisions.

Having the documents in place can help prevent the person from being placed in guardianship by the court. If they have no advance healthcare directives, the family or caregivers must apply to the court for guardianship if incapacity can be proven. When granted, the court appoints a decision-maker, taking away the individual’s ability to make decisions – either in whole or in part. This court oversight continues throughout the individual’s life.

Advanced directives, like a living will, health care power of attorney and financial power of attorney, allow those facing dementia to make their own decisions while they still have the capacity. Family members and potential caregivers should encourage their loved ones to act and get these important documents in place.

An advanced health care directive can include both a living will, which makes known what end-of-life care the individual wants, and a health care power of attorney, which assigns an agent to carry out the individual’s wishes when making health care decisions. The document states goals and values on which to base the decisions. It doesn’t take away the individual’s rights to make those decisions and can cover a broad range of medical decisions, or it can be narrow and limit the types of decisions.

The documents can be revoked anytime but don’t expire until the individual dies. The agents also don’t become personally responsible for the individuals’ debts. Careful consideration should be used in choosing the agent, which can be a family member or other trusted person. The agent should be capable and have a good relationship with the person.

A financial power of attorney is similar. It names an agent and doesn’t take away the individual’s decision-making ability. It ends with death and can be revised anytime. It can include handling money, checks, deposits, property sales and pursuing legal action. However, changing beneficiaries of insurance or making gifts requires specific instructions.

The agent selected should be a person who understands the individual’s feelings and point-of-view and is trusted to respect the individual’s wishes. They should be adept at handling their finances, as financial management becomes very important regarding where you will stay.

Reference: The Tribune-Democrat (July 29, 2023) “Dealing with dementia | Planning ahead: ‘Have the conversation’”

Can Elder Financial Abuse Be Stopped?

The numbers are chilling. One in ten Americans age 60+ has experienced elder abuse. One of the most common forms of elder abuse is financial, says a recent article from Forbes titled “What Is Elder Financial Abuse—And How Do We Prevent It?”

Financial elder abuse is defined as when someone illegally or improperly uses an elderly person’s money for their own use. Elderly people are easy victims for obvious reasons. They may be mentally vulnerable, suffering from Alzheimer’s or other form of dementia. They may also be lonely and find the company of a new “friend” is so delightful that it impairs their judgement.

Financial elder abuse occurs most often from adult children, but also in nursing homes and assisted living facilities. Be on the watch for those new friends who enter senior’s lives, especially if they seek to limit contact with family members.

Caregivers or nursing staff have access to resident’s possessions, including checkbooks, ATM cards and credit cards. Monitoring an aging parent’s bank accounts on a regular basis should be part of caregiving by adult children. Unusual transactions, large withdrawals or unlikely purchases by credit card should immediately be reported to their bank or credit card company.

Less obvious and harder to track, is when someone forces a nursing home resident to sign legal documents transferring ownership of homes, cars, bank accounts and even investment accounts. They may also be pressured into creating a new will.

Here are some red flags to watch for:

New names being added to bank accounts or on credit cards.
Finding unpaid bills, letters from collection agencies or past due notices from creditors, especially when the person has sufficient funds.
Relatives who suddenly show up and want to be involved with an aging senior, including estranged children.
The unexpected transfer of any kind of asset to someone who is not a family member.
Any change in habits concerning money, including someone who was never worried about money suddenly being concerned about paying bills.

The elderly are often scared to report being victimized. They may fear further loss of control over their lives or be embarrassed to have been scammed. If a caregiver is stealing, they may also be physically threatened, or frightened of losing their familiar care provider.

Talk to your estate planning attorney, speak with the local Adult Protective Services office, or contact the National Elder Fraud Hotline, if you are concerned about a loved one being financially exploited. If you believe a loved one is in physical danger, contact the local police. Don’t hesitate to ask for help.

Reference: Forbes (Nov. 9, 2021) “What Is Elder Financial Abuse—And How Do We Prevent It?”

Court Victory for Adults Caring for Parents at Home

A New Jersey Appellate Division recently reaffirmed the state’s regulation that allows older adults to transfer their homes to adult caregiver children without Medicaid penalty, reports an article titled “Major Victory for Adults Who Provide Home Care for Parents” from The National Law Review. The regulation permits the home to be transferred with no Medicaid penalty, when the adult child has provided care to the parent for a period of two years. This allows the parents to remain at home under the care of their children, delaying the need to enter a long-term care facility.

New Jersey Medicaid has tried to narrow this rule for many years, claiming that the regulation only applies to caregivers who did not work outside of the home. This decision, along with other cases, recognizes that caregivers qualify if they meet the requirements of the regulation, regardless of whether they work outside of the home.

The court held that the language of the regulations requires only that:

The adult child must live with the parent for two years, prior to the parent moving into a nursing facility.
The child provided special care that allowed the parent to live at home when the parent would otherwise need to move out of their own home and into a nursing care facility.
The care provided by the adult child was more than personal support activities and was essential for the health and safety of the parent.

In the past, qualifying to transfer a home to an adult caregiver child was met by a huge obstacle: the caregiver was required to either provide all care to the parents or pay for any care from their own pockets. This argument has now been firmly rejected in the decision A.M. v. Monmouth County Board of Social Services.

The court held that there was nothing in the regulation requiring the child to be the only provider of care, and the question of who paid for additional care was completely irrelevant legally.

It is now clear that as long as the child personally provides essential care without which the parent would need to live in a nursing facility, then the fact that additional caregivers may be needed does not preclude the ability to transfer the home to the adult child.

The decision is a huge shift, and one that elder law estate planning attorneys have fought over for years, as there have been increasingly stricter interpretation of the rule by New Jersey Medicaid.

While Medicaid is a federal program, each state has the legal right to set its own eligibility requirements. This New Jersey Appellate Court decision is expected to have an influence over other states’ decisions in similar circumstances. Since every state is different, adult children should speak with an elder law estate planning attorney about how the law of their parent’s state of residence would apply if they were facing this situation.

Reference: The National Law Review (March 22, 2021) “Major Victory for Adults Who Provide Home Care for Parents”

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Elder Financial Abuse Risk Increasing for Seniors Isolated by Pandemic

The extended isolation and loneliness during the coronavirus pandemic is creating the perfect storm for financial exploitation of seniors, who are unable to visit with family members and friends, reports Fredericksburg Today in the article “SCC urges awareness of investment fraud among seniors due to increased pandemic isolation.” The unprecedented need to forgo socializing makes seniors who are already at risk, even more vulnerable.

In the past, scammers would deliberately strike during a health crisis or after the death of a loved one. By gathering data from obituaries and social media, even establishing relationships with support and social groups, scammers can work their way into seniors’ lives.

Social distancing and the isolation necessary to protect against the spread of the coronavirus has left many seniors vulnerable to people posing as their new friends. The perpetrators may not just be strangers: family members are often the ones who exploit the elderly. The pandemic has also led to changes in procedures in care facilities, which can lead to increased confusion and dependence for the elderly, who do not always do well with changes.

Here are a few key markers for senior financial abuse:

A new friend or caregiver who is overly protective and has gotten the person to surrender control of various aspects of their life, including but not limited to finances.
Fear or a sudden change in how they feel towards family members and/or friends.
A reluctance to discuss financial matters, especially if they say the new friend told them not to talk about their money with others.
Sudden changes in spending habits, or unexplained changes to wills, new trustees, or changes to beneficiary designations.
Large checks made out to cash, or the disappearance of assets.
Signatures on checks or estate planning documents that appear different than past signatures.

Not being able to visit in person makes it harder for family members to discern what is happening. However, there are a few steps that can be taken by concerned family members. Stay in touch with the family member, by phone, video calls, texts or any means possible. Remind loved ones that scammers are always looking for an opportunity and may try to exploit them during the pandemic.

Every community has resources that can help, if elder financial abuse is a concern. An elder law estate planning attorney will be able to direct concerned family members or friends to local resources to protect their loved ones.

Reference: Fredericksburg Today (June 20, 2020) “SCC urges awareness of investment fraud among seniors due to increased pandemic isolation”

Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

How to Plan Ahead in Case a Loved One Has Dementia

Can Elder Financial Abuse Be Stopped?

Court Victory for Adults Caring for Parents at Home

Elder Financial Abuse Risk Increasing for Seniors Isolated by Pandemic

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