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Estate and Financial Planning For Life: In 12 Steps ###NEED ALZ LOGO#### For those Living with Alzheimer's disease and their Loved Ones By: Martin M. Shenkman,

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Presentation on theme: "Estate and Financial Planning For Life: In 12 Steps ###NEED ALZ LOGO#### For those Living with Alzheimer's disease and their Loved Ones By: Martin M. Shenkman,"— Presentation transcript:

1 Estate and Financial Planning For Life: In 12 Steps ###NEED ALZ LOGO#### For those Living with Alzheimer's disease and their Loved Ones By: Martin M. Shenkman, JD, and Ruth Drew, Director of Family and Information Services of the Alzheimers Association, and Mary Bohmke, Director of Planned Giving for the Alzheimer's Association

2 Disclaimer and Caveat Nothing in these slides or any accompanying presentation is to be considered tax, legal, investment or other professional advice. The information is merely provided for educational purposes and no action should be taken without the individual consulting his or her own tax, estate, legal, financial, investment, insurance and other advisers The Alzheimers Association, and any hosts, sponsors, moderator, panelists or others associated with this program are NOT responsible for its content or accuracy

3 Estate and Financial Planning For Life: In 12 Steps Introduction

4 What is estate and financial planning? The process of providing peace of mind for you, and your loved ones (however you define the term) It should address while you are alive, during varying health issues, and after your death It is more about planning for life then death An integrated plan that coordinates your investments, insurance, emergency and disability planning, retirement and other planning Define what estate planning means to you

5 What is estate and financial planning if you are living with Alzheimer's disease? Same process as for everyone just tailored to fit your special AD circumstances AD results in dementia and accounts for approximately 70% of dementia cases It must contemplate the course of what AD will bring barring a cure or new drug therapies – putting off tough decisions only makes them harder for the family An integrated plan that coordinates your investments, insurance, emergency and disability planning, retirement and other planning – but each component must be modified as required Define what estate planning means to you in light of your, or your loved ones, living with challenges of AD

6 Examples: Planning if you are living with Alzheimer's disease Plan now, dont wait for later Powers of Attorney – everyone names an agent to handle financial and legal matters, but your document might need to differ: – Standard forms might not suffice – Consider co-agents and a monitor (someone the agent reports to who monitors the agents actions and financial activities) if you dont have an agent you are absolutely assured is beyond question – Consider compensation if the agent might handle all your finances for many years Generally - Many advisers assume those planning with AD are focused on Medicaid planning – if you have significant resources that may not be your concern – be sure your advisers must focus on your real issues

7 Estate and Financial Planning For Life: In 12 Steps The 12 Steps

8 Introduction to the 12 Steps Every person is unique – it has to be your plan and address your challenges Reflect your personal wishes and circumstances Create a strong foundation of documents, steps and a plan, to build upon

9 12 Steps Its a process, not signing a document Begin the process Break the process into manageable steps Stick with it Do as few steps at a time as you can handle properly – staying committed to the process is more important than how many steps you tackle at once Make an Action Plan – Well show you how … Step by Step

10 Before you Begin Gather information Select advisers – Attorney – CPA – Investment adviser or financial planner – Insurance consultant Start thinking about the process

11 Action Step: 12 Steps Begin by Informing Your Advisors AD affects every aspect of estate, financial and related planning – dont use standard documents or planning steps without careful consideration – often small tweaks can make otherwise standard planning work much better for you You must explain your circumstances to all of your advisers or they will not be able to guide you – many advisers are really not familiar with the disease course Those not touched by chronic illness dont understand the symptoms (96% are invisible), disease course, variability between diseases and among those affected by a particular disease Your current status and likely disease trajectory must be explained You have to be proactive – Informed advisers mean a better plan and more peace of mind for you

12 Your Advisers Need to Understand: Chronic Illness is a Common Challenge Because only 5.4 million Americans may be living with AD, many attorneys, financial planners and CPAs, have limited experience dealing with AD -- and even chronic illness generally, but – it should not be a favor for you – it should be part of their practice 120 million Americans are living with chronic illness or disability By 2020, about 157 million Americans will be afflicted by chronic illnesses The lives of 26% of those ages 65-74 have been significantly impacted by chronic illness 50% of those age 85 and older have had some cognitive impairment 9 million people are cancer survivors with various side effects from treatment

13 Example: What to Explain if you are living with AD – AD disease progression can vary – Explain your current circumstances and what your neurologist and physicians indicate your likely disease course to be to your advisers – Your advisors must understand the time frame so they know how urgent planning might be, or whether there is sufficient time to plan with less pressure – Future impact on executive functioning and cognitive ability must be planned for

14 Estate and Financial Planning For Life: In 12 Steps Step #1: Organize

15 Step 1: Organize Emergency, Financial, Information and Advisors Information Passwords and Security Codes Existing estate planning documents Legal documents (contracts) Income and expense info Any budget or financial plan Advisor contact info (name, firm Phone number, email, etc.) This is the planning you should undertake to make it easier for you to deal with legal issues and finances as your AD progresses, and to assure fiduciaries can when you no longer are able to

16 Step 1: Organize Emergency, Financial, Information and Advisors Information Medical information (neurologist and other physician contact info; current health status, etc.) Emergency contact info (names, relationships, phone numbers, email addresses) Specific financial information (account numbers, contact person, address, phone number)

17 Investment and Financial Information is Critical to Organize The average age for the onset of AD symptoms is about 73 so many with AD have savings, hopefully a retirement plan and more Title (ownership) of Accounts: – Revocable trust – tool to manage assets, address challenges with executive functioning – Joint accounts – exercise caution Account Management – Duplicate statements – no cost protective tool – Consolidation and simplification – retain control longer – Access to safe deposit box Automation – Organizing records – On line payments – this can relieve you of a lot of paperwork – Set up on computer – Automatic deposits – reduce paperwork and chance for error

18 Financial Planning is Essential Budget – Core of your financial plan – Foundation of insurance decisions – Prerequisite to gift and other planning Investment allocation – Time horizon (disease course) – Risk level – Coordination of all accounts Analogies to help you plan – Rocket ship – if youre off 1 now you could miss by 100s of miles – Sailboat – cant sail into the wind – tack back and forth – adjust every year – 60 Second financial plan – can you live on 4% x your savings plus other cash flow sources

19 Action Steps #1: Emergency Info Type up a list on your computer so you can update it, email it, and back it up Disseminate the list to key people, ask for their help, and tell them what they might need to do to help and when Each professional adviser should have the list in their file Organize the list by category (e.g., banking, religious adviser, professional advisers, family, neighbors) List info needed for emergency action (e.g., account number, policy number, etc.)

20 Action Steps #1: Financial Plan Those with AD generally survive about four to eight years after diagnosis, although some have survived as long as 20 years – so financial planning may be critical About 200,000 have what is referred to as younger-onset AD – planning for them must address this Some advisers assume anyone with chronic illness has limited resources, make sure they understand your actual situation, whatever it is Prepare a budget Consider significant expenditures that might be required, e.g. making your home more accessible Review your investments Create a financial plan Implement changes suggested by the plan Update, review and revise

21 Estate and Financial Planning For Life: In 12 Steps Step #2: Power of Attorney

22 Step 2: Designate a Person to Handle Financial and Legal Issues General vs. Limited Agent (Successors) Compensation Begin date (Trigger) Powers (Authority) Durable (Disability)

23 Step 2: Tailoring Your Power to Address Alzheimer's disease Your challenges, especially the impact on executive functioning and cognitive impact, will affect when your power should be effective and scope of powers granted your agent A durable and general power should be signed at some time Consider naming co-agents to build in safeguards and to share work Organize finances to facilitate management during as disability progresses Consider special provisions – example, dont sell my home, modify my home to make it accessible even if the cost wont be recoverable when the home is sold, etc.

24 Action Steps: Power of Attorney Choose a trusted agent and several successors Hire a lawyer to draft powers tailored to your disease course and financial situation Discuss modifications to standard forms: – Compensation to agent – Limitations on certain powers – Definition of disability Sign several originals, distribute them to the appropriate people and instruct them as to what to do in an emergency Organize and simplify assets so an agent can act easily Create a monitor relationship

25 Estate and Financial Planning For Life: In 12 Steps Step #3: Health Proxy

26 Step 3: Designate a Person to Make Health Care Decisions Agent (successors) Powers (medical decisions) Signature (State law) Move (state; facility) Religious Concerns

27 Step 3: Tailoring Your Health Proxy to Address Alzheimer's disease Does your agent have sufficient knowledge of Alzheimer's disease and the decisions that might be required Given the progressive nature of AD, a guardianship designation should be included in the health care proxy (or a separate guardian designation prepared) Is your agent geographically close enough to respond to a sudden emergency Do your medical wishes contradict religious beliefs of your agent or family that you need to address Are there specific powers or rights which you do/dont want your agent to have

28 Action Steps #2: Health Care Proxy Choose an agent and several successors who understand your health situation and wishes Hire a lawyer to draft a health proxy that accomplishes your personal goals Determine specific powers to give/not give agent Sign several originals, distribute them, be sure a copy is included in your medical chart Discuss your decisions with family, friends and most importantly, your agents

29 Estate and Financial Planning For Life: In 12 Steps Step #4: Living Will

30 Step 4: Communicating Your Health Care Wishes Statement of health care wishes to guide/direct your health care agent Address broad array of decisions: – Lifestyle (nursing facility or home) – Health (experimental treatments) – End of life (heroic measures) – Other (funeral, burial, etc.)

31 Step 4: Tailor Your Living Will to address your Particular AD Challenges What heroic measures may you want and should the aggressiveness of medical treatment wane as dementia increases Differentiate level of treatments at different stages of your disease course Carefully modify quality of life decisions to reflect AD issues Direct home modifications – e.g. accessibility With Alzheimer's disease you may wish to mandate donation of brain tissues to further AD research

32 Action Steps #4: Living Will Review and consider personal wishes that should be reflected, e.g. religious observances, care instructions Hire a lawyer to draft a living will that communicates your personal decisions Discuss modifications to forms: Religious restrictions; Organ donations – e.g., brain tissue to foster AD research; Experimental or non-traditional treatments Sign several originals, distribute them, be sure one is included in your medical chart Discuss your decisions with family and agents

33 Estate and Financial Planning For Life: In 12 Steps Step #5: HIPAA Release

34 Step 5: Protect Your Confidential Medical Data But Assure Access to those You Choose HIPAA = Health Insurance Portability and Accountability Act Carefully read any form you sign to be sure you are not authorizing an insurance company or other third party to have unreasonably and invasive access to private information beyond what they reasonably require Indicate specific medical data to disclose and purpose of disclosure Indicate when right to information ends

35 Step 5: Tailoring Your HIPAA Release to Reflect AD Designate an agent to have access to your private health information (PHI) so they can help monitor your care even if you can still make decisions and your health proxy is not triggered AD leads to dementia so consider whether a particular HIPAA release should continue for your lifetime or indefinitely It may be advisable to permit disclosure of psychiatric records as they pertain to competency and other important issues

36 Action Steps #5: HIPAA Release Review all provisions of any form you sign Clarify what is, and is not, to be disclosed Be proactive and have signed HIPAA releases in place designed to make it easy for the people you name (called HIPAA Representative) to access relevant health information Be sure your lawyer confirms that the person you designate can in fact serve as your HIPAA Representative Request that your physician include your HIPAA release in your patient chart

37 Estate and Financial Planning For Life: In 12 Steps Step #6: Will

38 Step 6: Sign a Will Name executors and guardians Distribute assets Tax planning (bypass and martial trusts) Trusts for heirs Plan flexibly – laws and life change Consider caps on amounts bequeathed to different trusts

39 Step 6: Request that Others Tailor Their Wills to Address Alzheimers Disease Does it make sense for loved ones to name you executor or guardian? If not suggest they revise their documents If you are named a beneficiary suggest that your possible benefactor name a trust designed to protect you, rather than name you outright

40 Step 6: Your Will and Alzheimers Disease Dont delay signing – the progression of dementia will make it harder and subject the will signed to a greater risk of challenge If you want to change your will ask your attorney to consider using a codicil (amendment) which wont revoke the prior will, just change it Have your lawyer draft flexibly and considering many potential changes in law and your personal situation so if you are not able to legally amend your will the flexibility will give your executor and trustees greater ability to address the new circumstances

41 Action Steps #6: Sign a Will Wills are important but if youre facing a progressive chronic illness like AD it is only one step of many and perhaps not the most important step Include personal letters of instruction Consider trusts for minor children Donate to charities that have helped you – even modest donations send an important thank you Opt for flexibility in case you cannot update the document to reflect future changes Suggest others establish trusts for you in their wills

42 Estate and Financial Planning For Life: In 12 Steps Step #7 Revocable Living Trust

43 Step 7: Create a Revocable Living Trust Establish a personalized (not boilerplate) living trust Transfer assets to a trust during your lifetime Avoid probate and intestacy Contains dispositive provisions of your will Manage assets during disability or illness – unlike a will addresses planning while you are alive and well, or disabled

44 Step 7: Tailor Your Revocable Living Trust to Address PD Depending on your current status (e.g., cognitive impairment) you may serve as an initial co-trustee (serving as sole trustee as many lawyers draft can be dangerous given the disease course of AD) Co-trustee arrangement can keep you involved and in control as long as possible and ease the passing the baton to successors Tailor clauses to retain control while protecting you Trustee removal clauses should consider your challenges now and likely disease course – e.g. you cant be remove unless disabled for 30 days to avoid your removal for a short term health event Include details on lifestyle you wish maintained With YOPD address care for children and authorize trustee to distribute for them

45 Action Steps #7: Revocable Living Trust See comments for Wills above and coordinate Boilerplate Trusts designed to avoid probate wont accomplish your goals – be wary of the trust mills Focus of document should be protecting you (and your loved ones) and communicating your wishes as your disease progresses Tailor trustee replacement, disability and other provisions to the nuances of your anticipated disease course Fund the trust (transfer assets into the trust name) other than retirement assets or professional practices

46 Estate and Financial Planning For Life: In 12 Steps Step #8: Insurance

47 Step 8: Be Sure Your Insurance Coverage is in Order Property and casualty insurance Business coverage Long term care coverage Life insurance Liability Coverage

48 Step 8: Tailor/Plan Your Insurance to Address Your Illness Does homeowners insurance cover home health aids If you have life insurance can you borrow against it, convert it to permanent coverage if it is term, can you benefit from a viatical settlement Does your partner/spouse have long term care coverage – consider the impact of your AD on them since 3/4ths of AD clients are cared for by their family

49 Action Steps #8: Insurance Coverage Dont make assumptions – AD doesnt mean you dont have insurance planning options Have all your insurance coverage reviewed at least every 2 years Evaluate all options – Can you convert term life insurance to a permanent policy? Can you sell life insurance in the secondary market to free up cash Standard homeowners coverage may not suffice – do you need a rider for home health workers/home improvements

50 Estate and Financial Planning For Life: In 12 Steps Step #9: Beneficiary Designations

51 Step 9: File Beneficiary Designations and Confirm Title to Accounts Standard provisions are not always adequate Coordinate with Revocable Trust What powers should agent have Give copies to your advisers Update when banks merge Revise when tax laws change

52 Step 9: Request Loved Ones Tailor/Plan Their Beneficiary Designations to Address Your Illness Should a trust for your benefit be named instead of you as beneficiary Should someone else be named beneficiary instead

53 Action Steps #9: Beneficiary Designations Consider all beneficiary designations: life insurance, pensions, IRAs, brokerage accounts and more Be cautious about signing beneficiary designations for non-retirement accounts Obtain copies of the forms you filed and blank forms to facilitate revision Have family members who name you as beneficiary instead consider a trust for you Consider whether agent under power of attorney should be able to change beneficiary designations

54 Estate and Financial Planning For Life: In 12 Steps Step #10: Give Back

55 Step 10: Give Back Demonstrate important values to heirs Thank those that have helped Inspire others to give Give however you can

56 Action Steps #10: To Give Back Make a donation (time, cash, insurance, even stuff) Include a bequest in your will – even small bequests can make a big statement Write a heartfelt letter of instruction to heirs and thanks to those that have helped Inspire others to give that have the wherewithal to do so

57 Estate and Financial Planning For Life: In 12 Steps Step #11: Communicate

58 Step 11: Communicate Educate and inform your fiduciaries Preparation of beneficiaries

59 Action Steps #11: Communicate Explain your finances, family, care, disease, and so forth to your advisers – tell all so they can help properly Discuss with family, friends or others involved in your life what help you might need Can those you expect to rely on really help – do you Have alternatives Express your wishes in face to face meetings and then confirm key points in writing Consider a consultation/evaluation by a licensed independent care manager

60 Estate and Financial Planning For Life: In 12 Steps Step #12: Review – Its a Process

61 Step 12: Review, Revisit, Revise Nothing remains static – Tax and property laws – Family situations – Assets and net worth – Health changes – New medications – Document your wishes – Re-document your wishes

62 Estate and Financial Planning For Life: In 12 Steps Get Started Now



65 For more information See the Alzheimers Association website: or call 800-272-3900 Email your questions to and write estate webinar in the subject line (those questions will be turned into an article to be posted on the blog at and See or ###NEED ALZ LOGO####

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