Q. My husband was just diagnosed with Alzheimer’s, but still seems to be generally okay. Are there legal steps we should take by way of planning for the future?

A.  Yes. Once you or loved one has been diagnosed with dementia, it is important to take action to get your affairs in order. Here is my short list of suggestions:

  1. Check Your Long-Term Care Insurance Policy. If you are lucky enough to have a long-term care insurance policy in place, check its benefit provisions, especially its “benefit triggers”.  Many policies are triggered by an inability to perform 2 out of 7 activities of daily living, i.e. eating, dressing, bathing, toileting, ambulating, transferring and continence.  Check for waiting periods, cost-of-living adjustments, lifetime caps, and the extent to which the policy covers care in the home.  Some policies also provide an option to increase benefits periodically without new medical examinations and, if so, consider opting for such benefit increases now, or as soon as eligible to do so.
  2. Check Your Life Insurance Policy for Early Benefit Options. Some life insurance policies offer an option to accelerate benefits under certain conditions, such as the need for long-term care. Check with your insurance company to see whether yours offers an Accelerated Death Benefit.
  3. Consider Applying for a Reverse Mortgage Line of Credit. If you or your spouse are over age 62, consider applying for a Reverse Mortgage (“RM”) line of credit to draw upon in the event of future need.  To qualify for a reverse mortgage, it is usually necessary for both spouses to receive counseling and sign numerous loan documents.  It is best to do this when both of you are able to fully participate in the process.  Also, just because you have a RM credit line, does not necessarily mean you have to draw upon it; instead, consider it as a stand-by source of emergency money for care expenses should the need later arise. Another option:  If your children or family members have the means to function as the “bank”, consider offering them a “Private Reverse Mortgage” to fashion a similar benefit for you, without some of the ‘downsides’ associated with conventional RM’s.
  1. Check Availability for Veterans Pension. If you or your spouse is a veteran, check with the VA to determine whether you might qualify for a veteran’s pension to help with care expenses.
  2. Review Beneficiary Designations. Review the beneficiary designations on insurance policies, IRA accounts, annuities, bank and brokerage accounts, and the like, to make sure they still conform to your wishes.  Many people designate beneficiaries when they initially set up their accounts and, over the years, neglect to review and update them as family circumstances change.
  3. Have Your Estate Planning Documents Reviewed. Make sure you have in place good quality estate planning documents, such as Advance Health Care Directives, Living Trust & Wills, and Durable Powers of Attorney. Most importantly, make sure that your documents include Medi-Cal planning powers: such powers may enable you to access a Medi-Cal subsidy to help pay for your husband’s future care expenses without depleting a lifetime of savings.

Note: Sadly, I find that most estate plans that I am asked to review do not contain adequate Medi-Cal planning powers.  I suggest that your documents be reviewed by an elder law attorney with experience in public benefits planning. Revising your documents now to include these powers may help you finance the future cost of your husband’s care without placing your own financial security at risk.