Passaic County Alzheimer’s and Dementia Planning Lawyer

An elderly woman sitting comfortably on a sofa chair while reading a book.

Planning for the future can be complicated when you are retired or growing older. A diagnosis of dementia or Alzheimer’s can add a sense of urgency to estate planning and bring new concerns with it. You may wonder about long-term care planning, advance healthcare directives, power of attorney forms, and more.

If you or a loved one has questions or concerns about legal planning following a dementia diagnosis, the Van Dyck Law Group is available to assist you. Our team of Passaic County Alzheimer’s and dementia planning lawyers can help you with all aspects of estate planning, long-term care planning, assigning a power of attorney, and more.

The sooner you start the process, the more options you may have, so please contact us today to learn more.

How Do Trusts Fit Into Estate Planning?

Sometimes, people think that estate planning simply means making a will. That is one key component of estate planning, but there are many more to consider. The process involves a comprehensive plan to handle your assets, property, and healthcare choices both during your lifetime and after your passing.

In some cases, assets are distributed by a will. However, in other situations, the owner or grantor may choose to place assets in a trust while they are still alive. The assets are then distributed according to rules set out in the trust documents.

Why Would Your Passaic County Alzheimer’s Planning Attorney Recommend Creating a Trust?

A trust is not right for every situation, but there are several reasons why some people choose to place assets in a trust. These may include:

Medicaid eligibility. This is often a concern for people living with Alzheimer’s or other forms of cognitive decline. Long-term care is frequently needed in the later stages of the disease, and assisted living or nursing home costs can be prohibitive for many families. We’ll explore Medicaid eligibility later in this article, but the key takeaway is that trusts are sometimes used to preserve assets without impacting eligibility.
Reducing taxes for heirs. Often, placing assets in an irrevocable trust can help the beneficiaries avoid inheritance taxes.
Wealth preservation. Trusts offer a way to safeguard family wealth from mismanagement or misuse. They can include specific terms that promote the careful and appropriate use of assets, which is particularly valuable when beneficiaries are young or lack financial experience.
Avoiding probate. Probate is the legal process of settling a person’s estate after they pass. It can be time-consuming and expensive, and some people would prefer to place assets in a trust, which bypasses the probate process.
Privacy. Wills become a part of the public record, but trusts can be kept private.
Succession planning. If you own a business, an Alzheimer’s diagnosis may cause concerns about the leadership of your company. Trusts can serve as a structured tool for outlining the future of a family business, helping to ensure a smooth handoff of ownership and leadership responsibilities to the next generation.

What is the Difference Between a Revocable Trust and an Irrevocable Trust?

There are two main categories of trusts, each with pros and cons:

Revocable Trusts

A revocable trust, sometimes called a living trust, gives you the most control over your assets. Its terms can be modified, and the setup process is less complex. Even after placing assets in the trust, you can use them as you want. Additionally, you can change the trust’s terms or even dissolve it.

However, revocable trusts are not ideal in every situation. Since the grantor maintains authority over a revocable trust, any assets placed in it remain vulnerable to creditor claims. If the grantor is sued, those assets can be seized or sold to fulfill a court judgment. Additionally, revocable trusts don’t offer the same tax benefits for the trust’s beneficiaries or prevent assets from counting toward Medicaid eligibility.

Irrevocable Trusts

Unlike a revocable trust, the terms of an irrevocable trust become fixed as soon as the trust document is executed. In most cases, modifications are not allowed once the trust is established. Changes can only be made with unanimous agreement from all beneficiaries or by obtaining a court order—and sometimes, both are necessary.

One of the primary benefits of choosing an irrevocable trust is its tax advantage. Assets placed in the trust are no longer considered part of the grantor’s taxable estate, which can reduce or eliminate estate taxes upon their death.

There is another tax advantage with one specific type of trust. A grantor trust is structured so that the trust’s creator is responsible for paying the income taxes on the trust’s earnings. As a result, beneficiaries typically receive distributions free of income tax.

Irrevocable trusts have another advantage that is of interest to many people after a dementia diagnosis: Placing assets in an irrevocable trust can remove them from being counted for Medicaid eligibility. Because Medicaid has a fairly low asset/income threshold, many people find that their assets render them ineligible. If you are concerned about your assets and Medicaid eligibility, we recommend consulting a New Jersey Alzheimer’s planning lawyer as soon as possible.

What Other Legal Planning Options Will a Passaic County Dementia Planning Attorney Recommend?

A Passaic County Dementia Planning Attorney, including our legal teams that serve in Paterson and Clifton, will get to know you and ask questions about your goals and plans so we can recommend the best options for you. The solutions we suggest will be based on your situation.

However, here are some common recommendations that we often make for people who have been diagnosed with dementia:

Choose a Power of Attorney

In advanced dementia, patients often become incapacitated. This generally occurs when they are no longer able to absorb new information, make informed choices, or communicate those choices.

When a person in New Jersey no longer has legal capacity, someone else must step in and make decisions about healthcare, finances, and other legal concerns. But who do these tasks fall to?

If the incapacitated person has previously signed power of attorney documents, the person named in those documents as an agent will take over decision-making. The principal, or the person granting authority, can choose one person to make all their decisions. Aside from that, they can select different people to handle medical and financial choices. Additionally, they can even make a power of attorney for a limited duty, such as selling real estate or other property.

When you create a power of attorney (POA), it’s essential that you have a conversation with your agent and tell them what you do or don’t want in the future. This will empower them to make confident decisions when the time comes, knowing exactly what your wishes are.

Make an Advance Healthcare Directive

The advance healthcare directive is another way to assist your medical power of attorney if they have to make complex or difficult decisions. It allows you to set your wishes for future healthcare and end-of-life care in writing, so that your POA has a guide to follow. This can be beneficial in situations where the agent might otherwise be unsure of your preferences or conflicted due to other relatives’ opinions.

Passaic County Alzheimer’s and Dementia Planning FAQs

What if Your Family Member Becomes Incapacitated Before Making a Power of Attorney or an Advance Healthcare Directive?

When this occurs, the New Jersey court system will appoint a guardian or conservator to oversee the person’s healthcare or financial decisions. If you would like to be a relative’s guardian, your Passaic County dementia planning lawyer can assist you with the next steps.

Do You Have to Place All Your Assets in a Trust for Medicaid Eligibility?

Not necessarily. Some assets are “non-countable” for Medicaid eligibility, including:

The applicant’s primary residence. There are some stipulations. A primary residence is non-countable if the applicant’s spouse still lives there. If the home is empty and a nursing home becomes the applicant’s primary residence, it may become countable unless the applicant states they intend to return to their home. There is also a dollar limitation on home equity if the applicant is the only person living in the house. This limit is currently set at $1,097,000, but the amount may change annually.
One vehicle.
Personal belongings, such as clothing, jewelry, or home goods.
Life insurance policies.
Burial spaces and some irrevocable burial reserves. If the funds can’t be withdrawn before the beneficiary’s death, irrevocable burial reserves are non-countable.
Items necessary for self-support.

Other assets, such as additional properties or vehicles, retirement accounts, bank accounts, and more, are usually countable.

Where Can You Learn More About Dementia Legal Planning Options in Passaic County?

Facing the legal complexities that come with a memory loss diagnosis can feel overwhelming – but you don’t have to go through it alone. At Van Dyck Law Group, our Alzheimer’s planning attorneys in Passaic County are here to help you understand your choices, address your concerns, and draft the legal documents needed to honor your wishes. We’ll also assist you in building a forward-looking plan that supports your well-being and long-term goals. With compassion and experience, we’re committed to walking beside you throughout this challenging journey. To learn more, please contact us at (609) 293-2621.