San Diego Asset Protection Alert

Walter E. Pinkerton

Law Offices of Scott C. Soady, APC
Asset Protection & Estate Planning Attorneys

San Diego Asset Protection Alert

Our law alert keeps you up to date on the newest strategies, latest developments and key court decisions that affect your financial wellbeing.

Provided as an educational service for friends, colleagues and clients by Walter E. Pinkerton, Jr., Of Counsel, and Roy M. Doppelt, who welcome your questions and comments at (858) 618-5510, or


Part of our newsletter this issue is discussing dementia—the legal and financial issues facing individuals with dementia and their families, as well as how to understand and communicate with a person with dementia. At Law Offices of Scott C. Soady, APC, we have worked with many individuals and families facing issues when a loved one has been diagnosed with Alzheimer's disease or other type of dementia.

Dementia is one of the world's fastest growing diseases. Worldwide there are an estimated 24 million people living with some form of dementia. It has been estimated that by 2040 there could be as many as 81 million people with age-related dementia. These statistics show that dementia is a problem that affects many individuals and therefore the family members, friends, caregivers, and physicians that care for them.

In the estate planning area, the issues that need to be addressed by patients with dementia and/or their families are whether the appropriate estate plan (will or trust) is in place, whether beneficiary designations are up to date, whether there are powers of attorney for finances and health care executed, and whether long term planning in necessary for health care costs. Early planning allows an individual facing a potential loss of memory to choose how their affairs will be handled and the person they want to manage their affairs in the future and after death.

We, at Law Offices of Scott C. Soady, APC, will help you or a loved one address these concerns and plan now in advance. A complimentary consultation is always available if we can help with these or any other estate planning issues.

Read What You'll Find In This Issue:

  • Legal and Financial Issues for Individuals with Dementia
  • How to Communicate with a Person with Dementia
  • Understanding a Person with Dementia
  • Resources
  • Estate Planning in This Economy?

Understanding the Person with Dementia

Almost all of us come in contact with persons with some form of dementia.

Understanding and respecting the person with dementia is critical. Often a person with dementia feels embarrassed, awkward, and vulnerable. They need to know that they are valued and respected by the people around them whether it be loved ones, caregivers, or health professionals, There are many things that can be done to reassure a person with dementia so that communication will be easier.

Make the person feel valued. One of the things that can go a long way toward making such a person feel understood is taking the time to listen to them, being happy and upbeat, showing them affection, and always being patient and kind. Dementia affects people's reasoning and thinking but it doesn't usually affect their feelings. Try to understand how they are feeling. Take the time to listen and not ignore them or dismiss their feelings,

Treat the person with courtesy. Address a person with dementia in a respectful manner and treat them with courtesy as Alzheimer patients and others with dementia often have a fragile sense of self esteem. Try not to talk down to them or talk to others as if the person with dementia is not even in the room. Make an effort to make them feel good about themselves even if they don't seem to be making much sense. Avoid criticism or scolding.

Treat the person with respect. Respect the person's privacy. While a person may need assistance with personal activities, respect their privacy as much as possible. Self-respect is important so encourage the person to take pride in their appearance. Encourage the person to do whatever tasks and activities they can, at their own pace or own way. Respect the individual's cultural or religious values.

Allow the person to make choices about things they can. Alzheimer's and other dementia patients should be given every opportunity to make their own choices. Offer simple choices as dementia patients can sometimes find making choices difficult. Ask them questions that can be answered" yes" or" no."

Legal and Financial Issues for Individuals with Dementia

Once a person has been diagnosed with Alzheimer's disease or other type of dementia, legal and financial issues should be addressed. An individual with early stages of dementia often has the ability to manage their own financial and legal affairs but as the dementia progresses, there may be problems with memory, comprehension, or judgment. Legal and financial issues should be considered while an individual has the capacity to understand and communicate. Advance planning can help people with dementia and their families clarify their wishes and make informed decisions about health care and financial issues.

Testamentary capacity is the ability to make and execute a will, trust, or other legal estate planning document. An individual must know at the time they sign such a document the extent of their property, their blood relations, and the general nature of their assets.

Planning should include evaluating the individual's finances and future costs of care, making sure legal documents are in place to name an individual to make health care decisions when the time comes, and documents that state the financial management and estate plan wishes of the individual. The legal documents that are crucial for an individual with dementia are:

1. A will or a revocable living trust. A will is a document that names an executor (the person who will manage your estate upon your death) and the beneficiaries (those individuals or entities who will receive your estate). A will by its nature will have to go through the court system known as probate when you pass away which may be reason alone to consider a living trust. Probate can take time and money away from your estate.

A living trust is a revocable document that names someone (the Successor Trustee) to take over a person's estate when the maker (often called the Settlor or Trustor) dies or becomes unable to manage his estate. A trust provides a detailed plan for the distribution of property after death but also provides powers to the Successor Trustee to manage the trust assets while the Settlor or Trustor is alive but unable to manage his or her own affairs. In addition, a revocable living trust usually includes the two other documents discussed below.

2. A power of attorney. This document allows the person with dementia (the principal) to name a trusted person (an agent) to make financial decisions when he or she is unable to manage their finances. Most powers of attorney are "durable," meaning they are valid even after the principal can no longer make decisions. Such powers terminate upon the principal's death.

3. An advance health care directive including a living will. A health care directive includes a power of attorney to give the person you name (your agent) the power to act on your behalf to make health care decisions for you if you become unable to. The living will aspect of the directive states your choices as to such things as artificial life support and other "end of life" issues. They also may include a nomination of a conservator, which is the person you would prefer the court appoint if a conservatorship becomes necessary. This document must be prepared while you are still legally able to execute it.

The reason that it is so critical to get these documents in place is to avoid a conservatorship. If these documents are not in place before the individual with dementia loses capacity, a family member will have to petition the Probate Court to appoint a conservator. The Court will have to evaluate the competency of the individual and determine if they are able to make decisions about their care or their property. This can he costly and stressful for the individual with dementia and family members.

Also important are to review are documents such as:

  • Bank and brokerage accounts
  • Insurance policies
  • Pensions and retirement benefits
  • lRAs and other beneficialy designations
  • Social security benefits
  • Health care insurance, including any long-term health care policies or disability policies

These documents and your estate planning documents should be gathered together and stored in a place known to a trusted family member or friend.

Caring for a person with dementia can be physically demanding and in some cases leads to the necessity for caregivers or skilled care in a residential facility. Long term care can be very expensive. Such long term care such as caregivers, respite, day care, home health assistance, nursing homes, and other skilled facilities can cost upwards of $75,000 a year. Once a diagnosis is made of dementia, the projected cost of such care should be considered in light of the individual's financial status. If private funds are exhausted on health care costs, Medi-Cal may be an option.

Medi-Cal planning uses legal strategies to maximize the amount of money an individual may keep while still qualifying for government benefits. Qualifying and applying for Medi-Cal may require legal assistance to determine which assets are "exempt" and "non-exempt" for purposes of Medi-Cal qualification and whether a "spend down" of assets would be feasible. It is important to plan in advance for Medi-Cal before you actually need it.

Facing Alzheimer's disease or any other form of dementia or debilitating disease can be difficult for all involved. If you or someone you know need assistance with Medi-Cal planning or estate planning documents, the estate planning lawyers at Law Offices of Scott C. Soady, APC, have the experience and sensitivity to help with these tough decisions.

How to Communicate With a Person with Dementia

1. Speak slowly and clearly. Be sure there are no distractions such as a TV or radio. Use a natural tone and volume. Be gentle and relaxed. Do not shout. Use simple sentences with simple words. Do not talk down to a person with dementia. Studies have shown that using "baby talk" or "elder speak" as it is called, only agitates the person with dementia.

2, Call the person by name using a respectful name and stand in front of them when speaking. Eye contact is essential in communicating with a person with dementia. You can also understand what they may be feeling by watching their body language or the expression of the person's face.

3. Use the person's name often in speaking to them and use your own name too if it seems that the person does not remember you.

4. Listen and allow the person to talk. Sometimes persons with dementia use the wrong word for things or cannot remember the correct word. Try to understand what the person is trying to say. You may want to suggest a word if they are struggling. Go with the flow. If the person is not making sense, just let it pass. It will only upset the person with dementia if you criticize, correct them, or argue. Try not to interrupt.

5. Use patience and understanding. Try not to show frustration, anger, or impatience. Don't talk down to the person with dementia and don't talk about the person to others in the room as if the dementia patient doesn't exist. This can be very damaging to the person's self esteem and makes the dementia patient feel isolated and cut off. Smile a lot and show affection if the person is okay with physical contact.

6. Be positive and give simple choices. Try not to ask the person to make complicated decisions. Too many choices can be confusing and frustrating. For example, instead of saying "don't" do something, say "Let's try doing this" or rather than saying "What do you want to wear today?" ask instead "Do you want to wear the red blouse or the blue blouse?"


Alzheimer's Assoc.-24 hour hotline

San Diego County Aging and Independence Services

Glenner Alzheimers Centers

Safe Return

Southern Calif. Caregiver Resource Center

UCSD Alzheimer's Disease Research Center


"Will you please help us by referring your family and friends?"

The highest compliment we can receive is for you to recommend us to your family and friends.

So if anyone you know wants information on estate planning and how to protect their assets, please give them our phone number and invite them to call us.

We'll gladly speak with them on the telephone or in our office—no cost or obligation, of course.

In the same way that we helped you, we'll be delighted to help them too. Thank you!

-Roy & Walter

Actual resolution of legal issues depends upon many factors, including variations of facts and state laws. This newsletter is not intended to provide legal advice on specific subjects, but rather to provide insight into legal developments and issues. The reader should always consult with legal counsel before taking action on matters covered by this newsletter.

Revocable Living Trusts in This Economy?

Most people agree that we are in the middle of an economic recession in this country. Unemployment is at a level not seen in years and the stock market looks like a roller coaster. How does the recession affect the need for a trust? If you already have a trust, is it affected by the recession?

If you do not have a trust and you have assets over $100,000 you probably do need a living trust even in a poor economy, and some people would say, even more so. There are many people living in San Diego that are home owners. A trust makes it easier to leave your home to family members without the disadvantages of joint tenancy. (Our last newsletter discussed the dangers of joint tenancy). If you have real property out of California, a trust will avoid a probate in both California and the state where the property is located, Many people have minor children and should set up a trust which will nominate a guardian for their children and provide for the distribution of assets to their minor children should both parents die. Death is inevitable, recession or not, but a trust will enable your estate to be distributed faster and less costly than with a will or with no estate plan at all. Dying without a will or a trust will insure that your estate will go through probate which will diminish the value of the estate due to probate and attorney fees, not something needed in this economy where every dollar counts.

If you already have a trust, does the recession affect your trust? It may in several circumstances. In a recession, smart investors try to recession-proof their portfolios by switching their IRAs, 401(k)s or other investments into different funds or CD's. Have they remembered to always title new investments in the name of their trust? Changing accounts, opening new accounts, sales of real property, refinancing, etc, all increase in times of recession, leaving open the possibility that assets are not properly titled in the name of the trust.

A second way your estate may be affected is by the type of trust you have. Your trust, even if old, is still valid, however it may not be optimal. Estate plans written in the 90's often require a division of the estate into two separate trusts on the first death of a married couple. These trusts were called A/B Trusts, Exemption Trusts, or Marital Trusts, That was a good choice for married couples in those years but today with an increase in the estate tax exemption to $3.5 million ($7 million for couples) you may want to update the "type" of trust you have, Revising your trust in this way will potentially save on trust administration after the death of the first spouse.

Lastly the economy may affect not only you but your beneficiaries. Have your children been affected by the economy? Have some beneficiaries become dependent on public assistance because of a disability? Maybe you need to change the distribution of your estate to provide for some children that you felt were self-sufficient. Maybe you need to add a Special Needs Trust for a disabled beneficialy so they do not lose their SSI or Medi-Cal due to an inheritance.

It's important to realize that while we can't control what happens in the stock market, we can control what happens with our estate plan. Call us today at 858-618-5510 for a free consultation about a revocable living trust or changes to your existing estate plan. We are currently offering a "recession discount" on our living trust package. You can get more information about what is contained in a revocable living trust package on our web site or read about estate planning issues on our blog.

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