Coping with dementia: Who can pay the bills?

My father has not been diagnosed but I can see that he is forgetting to pay bills, unable to comprehend his bank statements, and confused about what he owns, etc. How can I assist him with his financial affairs?

This scenario perfectly demonstrates how important it is to set up a plan where a trustworthy person is appointed in advance to make financial (and a slew of other) decisions in the event of incapacity. One important tool Elder law attorneys recommend is a New York State Power of Attorney. This document is one of a group of instruments referred to as Advance Directives. The Power of Attorney allows a Principal (ie: a father) to appoint an Agent (ie: a son) to take care of all kinds of matters on behalf of Dad. Another crucial Advance Directive is the New York State Health Care Proxy (see below).

But Dad may be reluctant to appoint an agent. Sometimes our loved ones are very private with their financial and personal matters and do not want anyone else to have access to or authority in their affairs. Before stepping in and managing your father’s bills, your father should consult with an Elder Law attorney who can advise him on the best way to make arrangements that protect his property and preserve his autonomy. If your father has diminished capacity and his accounts are in his name alone with no Power of Attorney or similar arrangement in place, no one may sign his name, conduct transactions or make any financial decisions for him without proper authorizations in place. In some cases, court intervention may be necessary.

Guardianship

A guardianship proceeding is brought in the New York State Supreme Court when it is believed that an allegedly incapacitated person is in need of a guardian. This proceeding has several components and at its conclusion, the court determines whether the person is indeed, legally incapacitated, and if so, who the guardian will be and what powers that guardian will have. Courts try to appoint a family member where possible in order to maintain a sense of familiarity and comfort to the incapacitated person. In the alternative, a professional guardian or an organization may be appointed guardian. From that point forward, the guardian is overseen by the Court. Practically every decision/transaction made must first obtain Court approval.

Becoming a Guardian

There is a course that guardians take in order to learn what the responsibilities entail. Once the guardian qualifies and meets all the requirements, he/she will open a guardianship account and begin to manage the incapacitated person’s financial matters. The guardian may also be authorized to make personal and healthcare decisions for the incapacitated person. Serving as a guardian includes multiple duties such as annual reports that must be filed with the Court. The guardianship process is costly, potentially time consuming and in most instances, a last resort.

Preventing a Guardianship: Get those Advance Directives done!

Perhaps Dad is concerned about preserving his autonomy. Well, there is more than one way to appoint an agent. Signing a Power of Attorney does not mean that Dad is giving up all control. Rather, Dad is creating a safety net, so to speak. He selects an agent he knows he can trust. He might select two agents who work together. For the time being, Dad will manage his bills, taxes, etc. If capacity becomes an issue later in life, he knows there is an agent(s) in the wings who can step in and begin to assist or take over as needed. If Dad wants to make sure that his agent won’t act until Dad is officially determined incapacitated, the Power of Attorney may provide that requirement.

New York State Health Care Proxy

What about medical decisions? If a patient needs to sign consent for medical treatment but that patient is no longer able to comprehend the document, who will decide? The New York Health Care Proxy is an easy, free form available on the New York State Department of Health website. You do not even need a lawyer to complete one. It provides for a principal to appoint an agent to make health care decisions for the principal in the event he/she is unable to do so themselves. There is space to add special instructions, religious guidelines, etc. Having these advance directives goes a long way in avoiding the need to seek a court appointed guardian. It is preferable to choose your own agent as opposed to having a court choose a guardian for you.

This article is intended for general information use and does not constitute legal advice. Consult a Lawyer.

Shoshana Brenenson, Esq. is an Elder Law and Estate planning attorney with a practice in Crown Heights, Brooklyn. She assists seniors, parents and families on effective estate planning, long term care planning, and conducts presentations on the importance of advance directives. She may be reached at (646) 837-0688 or at www.brenensonlaw.com.