Trustee with Alzheimer's in New York

When a trustee in New York receives an Alzheimer's diagnosis, the steps to be taken depend on the trustee's role as a grantor and the nature of the trust, whether revocable or irrevocable. In the case of a revocable trust where the grantor-trustee is diagnosed with Alzheimer's, the successor trustee will assume the role upon providing evidence of the grantor-trustee's mental incapacity, typically through a physician's certificate as required by the trust document. If the trust is revocable and the trustee, not the grantor, is diagnosed with Alzheimer's, it is assumed that the trustee will be incapable of executing their fiduciary responsibilities. In this situation, the grantor has the authority to appoint a new trustee, as the grantor's right to do so in a revocable trust is not contingent upon the trustee's mental capacity. Grantors of revocable trusts generally possess the power to replace trustees with or without cause. When an irrevocable trust is involved, and the trustee, whether a grantor or not, is diagnosed with Alzheimer's, the trust document will outline the procedure for appointing a successor trustee. In some cases, the trust document will specify a named successor trustee, while in others, it will provide a method for selecting one. If the trust document does not offer an alternative means of appointing a successor trustee, court intervention may be required.

Grantor-Trustee with Alzheimer's - Medicaid Trust and Long Term Care Insurance

Upon receiving an Alzheimer's diagnosis, a grantor-trustee should promptly establish an irrevocable Medicaid trust during their lucid interval. This proactive measure ensures eligibility for Medicaid after a 5-year period without incurring penalties while safeguarding the grantor-trustee's assets from Medicaid reimbursement and avoiding costly and time-consuming guardianship proceedings. Planning for an Alzheimer's patient involves protecting assets from long-term care expenses, such as nursing home costs. An elder law attorney can help establish a Medicaid Asset Protection Trust (MAPT), which preserves assets while maintaining benefit eligibility. Understanding the Medicaid look-back period is crucial for effective planning and penalty avoidance. Allocating appropriate assets, such as investments, real estate, or savings accounts, to the trust establishes a funding source for long-term care. Ensuring adequate funding and management optimizes the trust's efficacy in asset protection. Assessing the viability of long-term care insurance is another essential step, requiring research of options, comparison of policies, evaluation of coverage, and consideration of the insurer's stability and reputation. Securing a policy at the ideal time based on age, health, and insurability can mitigate future care expenses. Regular policy review and updates ensure alignment with the client's evolving needs as their condition advances.

Other Estate Planning Documents

In addition to the Medicaid trust, executing other essential estate planning documents is crucial. These include a power of attorney, health care proxy, living wil, and a last will and testament. By having these in place, the grantor's wishes regarding medical directives, asset management during their lifetime, and asset distribution upon death will be honored and carried out, even if the grantor subsequently loses capacity due to Alzheimer's progression.

When drafting a Power of Attorney for legal and financial decisions, it is advisable to appoint one or more trusted and financially responsible individuals as agents. Naming a primary agent and a successor agent ensures a smooth transition of responsibilities if needed. The principal can decide whether agents must act jointly, requiring unanimous agreement on decisions, or independently, allowing each agent to act separately.

A Health Care Proxy for medical decision-making should also be established, potentially appointing a different person than the legal and financial agent. It is crucial to select someone who deeply understands the client's medical preferences and can make difficult decisions under pressure. Although only one agent may act at a time, naming a primary agent and at least one successor agent is essential to ensure continuity of care.

Moreover, a Living Will should be created to address end-of-life decision-making. This document clarifies the patient's wishes regarding life support and artificial means of sustaining life, detailing preferences for ventilators, feeding tubes, and resuscitation. It also indicates whether pain management and comfort care should take precedence over life-sustaining measures.

Failing to implement a personal plan before losing capacity can result in severe consequences. The state may initiate guardianship proceedings, appointing a guardian to make legal, financial, and medical decisions on behalf of the incapacitated person. These proceedings can be protracted, costly, and emotionally taxing for family members. The court-appointed legal guardian may be a stranger to the family, with limited input from loved ones in the decision-making process. Furthermore, asset protection strategies may be subject to judicial approval, which is not guaranteed. The guardian must seek court approval for significant financial transactions or estate planning strategies, and the court may not approve strategies that would have been available if capacity had been maintained.

Estate planning becomes a critical priority when an individual receives an Alzheimer's diagnosis. As the disease progresses, Alzheimer's patients often require extensive long-term care, which can be financially burdensome. It is imperative to consult with an experienced elder law attorney like us promptly to develop a comprehensive plan that safeguards your assets while ensuring eligibility for essential government benefits. Should you need assistance, the Law Offices of Albert Goodwin is here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].