Episode 78: How to Update Estate Planning After a Dementia Diagnosis
Episode 78
Host: Jill Mastroianni
How to Update Estate Planning After a Dementia Diagnosis
What happens when a parent develops dementia and an attorney tells your family it’s “too late” to update estate planning? In this week’s Tuesday Triage episode, Jill walks through a real-life scenario involving outdated trusts, powers of attorney, probate versus non-probate property, and the estate planning opportunities that may still exist even after incapacity enters the picture. This episode explores how understanding asset titling, existing estate planning documents, and revocable trusts can help families creatively adapt an older estate plan to current realities.
What You’ll Learn in This Episode
Estate planning is not always “all or nothing.” Even if someone can no longer sign new estate planning documents, meaningful planning opportunities may still exist.
Revocable trusts only control assets that are actually transferred into the trust. If the revocable trust was never funded, families may have more flexibility than they realize.
A pour-over will acts as a safety net by directing probate assets into the revocable trust after death.
Understanding how assets are titled is critical when incapacity becomes part of the estate planning picture. Joint ownership, beneficiary designations, and payable-on-death designations can dramatically affect what estate planning options remain available.
Existing durable financial powers of attorney may allow a spouse or agent to continue planning on behalf of an incapacitated individual.
Probate property and non-probate property work differently. Probate property requires court involvement after death. Non-probate property transfers automatically by operation of law, contract, beneficiary designation or trust agreement.
Families should periodically revisit older estate plans. Estate plans that made sense 20 years ago may no longer fit current finances, health concerns, or family dynamics.
Updating powers of attorney for a healthy spouse after the other spouse develops dementia can help make sure both spouses are protected in an emergency.
Estate organization matters. Gathering account information, contacts, passwords, beneficiary designations, and legal documents before a crisis can significantly reduce stress for adult children and caregivers.
Sometimes good estate planning is less about perfection and more about creatively adapting the tools already in place to the realities of life today.
Resources & Links
Watch this episode on YouTube: https://youtu.be/6i-C-_q6Mqc
Estate Plan Audit: https://www.deathreadiness.com/audit
Mollie Lacher and Sunny Care Services: https://sunnycareservices.com/about-us/
Episode 17: How Powers of Attorney Work, When to Use Them, and When It’s Too Late to Get One: https://www.deathreadiness.com/podcast/episode-17-how-powers-of-attorney-work-when-to-use-them-and-when-its-too-late-to-get-one
Episode 19: Why You Need (or Don’t Need) a Trust: https://www.deathreadiness.com/podcast/episode-19-how-to-know-if-you-need-a-trust
Episode 68: Why Good Powers of Attorney Still Fail: https://www.deathreadiness.com/podcast/68
Probate v. Non-Probate Asset Infographic: https://static1.squarespace.com/static/67427098ef10a8326b64eba9/t/694b2f436198f33cd2adcf08/1766534979768/Probate+and+Non-Probate+Assets+educational+representation.png
Connect with Jill:
Website: DeathReadiness.com
Email: jill@deathreadiness.com
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What happens when a parent develops dementia and an attorney tells your family it’s “too late” to update estate planning? Is the door really closed or are there still creative ways to make meaningful changes using the estate planning documents already in place? Today, I walk through a real-life scenario involving an outdated trust and powers of attorney, and explore what options for updates are still available.
Welcome to The Death Readiness Podcast. This is not your dad’s estate planning podcast. I’m Jill Mastroianni — estate planning attorney, death readiness guide, and your translator for wills, trusts, probate, and the conversations most families avoid. If you’ve been wondering things like, ‘Can a trust protect what I leave to my children?’ ‘What happens if I give someone power of attorney over me?’ and ‘How can I help my parents while respecting their independence?’ You’re in the right place.
I was a very competitive runner in high school in the late 90s. I graduated in 2000, which means I competed before athletic gear got really sophisticated. Cross country season started in September and sometimes stretched into December. I grew up in New York, so some of those races were brutally cold.
My problem was that I needed my arms warm at the beginning of a race, but I knew I’d overheat once I got moving. And because of the uniform rules, whatever I wore had to stay underneath my racing singlet.
So I brought the problem to my mom, and together, we came up with a solution.
We took a cotton long-sleeve shirt, cut the sleeves off, and reattached them with Velcro.
The idea was that mid-race, I could yank on the sleeves, detach them instantly, and shed the extra layer without breaking stride. Today, you can buy removable sleeves at any running store. But in the 90s, we were out there inventing things on our own.
And I wasn’t about to test this masterpiece for the first time during an actual race. So one afternoon, I showed up to track practice wearing my Frankensteined Velcro shirt.
I trained with the boys team, and in the middle of a 400-meter repeat, surrounded by high school boys, I dramatically ripped both sleeves off mid-stride.
I don’t know what anyone else thought about it. But I remember feeling incredibly proud of myself. The Velcro sleeves worked. We had solved the problem.
I’m telling you this story because life, and estate planning, often require that same kind of creativity.
Sometimes, starting over isn’t an option. Sometimes the answer is looking carefully at what you already have, figuring out what still works, and finding a creative way to adapt it to the reality in front of you.
Today’s Tuesday Triage question comes from Tiffany in Florida. Her parents signed estate planning documents back in the early 2000s. Since then, life has changed significantly. Both of her parents are still living, but her father is now suffering from dementia, and Tiffany does not believe he’s competent to sign new estate planning documents.
Tiffany reached out to an estate planning attorney in Florida for help and was told: it’s too late.
But is it?
While it very well may be too late for Tiffany’s dad to create brand-new estate planning documents, that does not necessarily mean the planning opportunities are gone or that Tiffany and her mom should simply throw up their hands.
Tiffany mentioned that her parents already have estate planning documents in place. I don’t know exactly what those documents are, but traditionally, in Florida, that often means powers of attorney for finances and healthcare, pour-over wills, and revocable trusts.
And before we get into Tiffany’s specific situation, I want to give a quick explanation of what a pour-over will and a revocable trust actually are, because understanding those two concepts is going to make the rest of this conversation much easier to follow.
A revocable trust is a legal structure, an agreement, you create during your lifetime to hold and manage your assets. The word revocable simply means you can change it while you’re alive and competent — you can move assets in and out, amend the terms, or even revoke it entirely.
For most people, the primary purpose of a revocable trust is to make things easier during incapacity and after death. It can help avoid probate, create smoother transitions, and give clear instructions for how assets should be managed and distributed.
But the trust only controls assets that are actually connected to it. In other words, you have to “fund” the trust by retitling assets into the name of the trust or naming the trust appropriately as a beneficiary.
That’s where a pour-over will comes in. A pour-over will is essentially a safety net for the revocable trust. It’s a will that says: if there are assets still in your individual name when you die, assets that never made it into the revocable trust, those assets should “pour over” into, or fund the revocable trust, after making their way through the probate process.
So the revocable trust is typically the main engine of the estate plan, and the pour-over will is the backup plan designed to catch anything that was left outside the trust.
And, most of the time, because people don’t fund the revocable trust, probate is NOT avoided, and the pour-over Will does the heavy lifting to get the assets transferred into the revocable trust after death.
People open new bank accounts, forget to retitle assets, or create new investment accounts. Life gets busy and things slip through the cracks.
The pour-over will helps ensure that assets left outside the revocable trust still ultimately follow the overall estate plan and instructions laid out in the trust.
Now, I wouldn’t necessarily assume that a couple from just any state has revocable trusts as part of their estate plan. But when someone tells me they worked with an estate planning attorney in Florida, I do tend to suspect revocable trusts are involved, because they are very commonly recommended there.
Part of the reason has to do with how probate attorneys are compensated in Florida.
Under Florida law, attorneys handling probate matters are entitled to what’s called “reasonable compensation,” and the Florida statutes include a fee schedule based on the value of the probate estate that is presumed reasonable. This means that probate attorneys can be compensated based on the value of the probate estate.
So in Florida, avoiding probate can also mean avoiding significant probate-related attorneys’ fees. Because of that, my experience has been that Florida estate planning attorneys frequently incorporate revocable trusts into their planning.
That’s a bit different from Tennessee, where I practice law. In Tennessee, probate fees are not presumed reasonable based on the value of the estate. Instead, probate work is generally billed hourly, based on the actual time spent administering the estate. So while revocable trusts are still used in Tennessee, they’re not quite as universally recommended as they often are in Florida.
And if you want to learn more about revocable trusts generally, I’ll link to Episode 19: Why You Need (or Don’t Need) a Trust, in the show notes that goes into the topic in much more depth.
And just as a quick reminder, I don’t review documents as part of Tuesday Triage episodes. These episodes are meant to provide general education and guidance, not advice tailored to your specific situation. So I don’t know exactly what Tiffany’s parents signed or what those documents actually say.
If you do want that deeper, document-specific analysis, that’s exactly what my Estate Plan Audit is designed for, and it’s available to people anywhere in the United States, not just in Tennessee where I practice.
During an Estate Plan Audit, we go through your documents together, talk about how they function in real life, identify potential gaps or problems, and discuss whether the plan still matches your goals, your assets, and your family dynamics today. By the end, you’ll have a much clearer understanding of what you have, what it does, and what, if anything, you may want to change.
You can find more information at deathreadiness.com/audit. That’s deathreadiness.com/audit. I’ll also include the link in the show notes.
Now, let’s get back to Tiffany’s situation. From what Tiffany shared, she has two main goals:
First, she wants to make sure her dad is cared for and that decisions can be made smoothly on his behalf as his dementia progresses.
And second, she wants to help her mom manage finances and assets, both now and in the future, with as little administrative chaos and burden as possible.
Before anyone can really determine the best next steps, Tiffany and her mom need to do a little homework.
And, this is homework I wish more people would do before meeting with an estate planning attorney in general. But in Tiffany’s case, because her father’s capacity is now limited, it becomes even more important to understand what can still be changed, what authority already exists, and what may now be locked in place.
At the most basic level, Tiffany and her mom need to identify what assets Tiffany’s parents own, how those assets are titled, whether they’re owned jointly or individually, and whether there are beneficiary designations or payable-on-death designations attached to any of those assets.
And I know that can sound tedious, but this information matters tremendously.
Because when someone’s capacity becomes limited, the details of how assets are owned often determine what options are still available moving forward.
The existing estate planning documents matter, of course. But equally important is understanding how the assets themselves are structured.
So let’s talk about why all of this matters.
Generally speaking, when assets, other than real estate, are owned jointly with rights of survivorship, either owner typically has the ability to access or move those assets independently. So if Tiffany’s parents own bank accounts or investment accounts jointly, Tiffany’s mom may be able to transfer those assets into a revocable trust on her own, without Tiffany’s dad needing to sign anything.
And that’s important, because if Tiffany’s dad no longer has the mental capacity to sign documents, then understanding which assets Tiffany’s mom can still control independently becomes incredibly valuable.
But what about assets that do require Tiffany’s dad’s signature? For example, real estate deeds often require both spouses to sign in order to transfer real estate into a trust.
This is exactly why existing estate planning documents matter so much.
Because if Tiffany’s dad previously signed a durable financial power of attorney, he already authorized someone, likely Tiffany’s mom, to act on his behalf if he became incapacitated.
That means Tiffany’s mom may be able to sign documents for him as his agent under the power of attorney. She may even be able to change his beneficiary designations.
Now, whether she can step in immediately depends on the language of the power of attorney document itself.
Some powers of attorney become effective as soon as they’re signed. Others are what’s called “springing,” meaning they only become active after incapacity is established, often through written confirmation from a physician stating that the individual can no longer manage his own affairs.
And if there is a requirement like that, the instructions for how incapacity is determined should be spelled out directly in the power of attorney document.
If you want to learn more specifically about powers of attorney, including some of the practical problems families run into with them, I’ll link to Episodes 17 and 68, in the show notes that I think you’ll find really helpful.
Now, we’ve been talking about transferring Tiffany’s parents’ assets into the revocable trust they likely created back in the early 2000s. But what if the bigger issue is that Tiffany’s mom no longer likes the trust itself? What if the terms no longer fit their life, their goals, or the realities of aging, illness, and incapacity?
For example, maybe Tiffany’s mom now wants Tiffany to serve alongside her as a co-trustee so she can help manage the trust during her parents’ lifetimes. Maybe the trust was originally drafted to hold assets in further trust for Tiffany after her parents’ deaths, but the family’s financial situation has changed over the last 20 years and that level of complexity and protection no longer makes sense. Maybe Tiffany’s mom would now prefer assets pass directly to Tiffany outright instead.
The first question I would ask is whether the trust was ever actually funded in the first place.
Because if the revocable trust was never funded, meaning assets were never transferred into it, then in many ways, the trust may just be a stack of paper sitting in a binder.
And if that’s the case, Tiffany’s mom may have far more flexibility than she realizes.
Now, if you’re an attorney listening to this, or, even a longtime listener of this podcast, you might be thinking: “But wait, what about Tiffany’s dad’s pour-over will? Doesn’t that direct his probate assets into the existing trust after his death?”
Yes, it would do that.
But remember: Tiffany’s dad is still alive.
And if Tiffany’s mom is acting as his agent under a valid durable financial power of attorney, she may be able to move many of his assets now, during his lifetime, before they ever become probate assets.
In other words, Tiffany’s mom may be able to convert a significant portion, or even all, of Tiffany’s dad’s probate property into non-probate property by transferring assets into a new revocable trust created for their benefit.
And that’s exactly why understanding how assets are titled matters so much in situations like this.
Because the planning opportunities often aren’t determined solely by the trust document itself. They’re determined by the relationship between the documents and the assets.
So let’s pause for a second and define the difference between probate property and non-probate property, because this distinction is incredibly important.
Probate property is property that passes through the court-supervised probate process after someone dies. Generally, it’s property owned solely in a person’s individual name without a beneficiary designation or automatic transfer mechanism attached to it.
Examples include a house titled only in one person’s name, an individual bank account with no payable-on-death beneficiary, or personal belongings.
Non-probate property, on the other hand, passes automatically outside of probate generally because of how it’s titled or because a beneficiary was named in advance.
Examples include jointly owned accounts with rights of survivorship, retirement accounts and life insurance with designated beneficiaries, payable-on-death bank accounts, and assets already titled in the name of a revocable trust.
The simplest way to think about it is this:
Probate property requires court involvement to transfer ownership after death. Non-probate property transfers automatically by operation of law, contract, or trust agreement.
And because this concept can be much easier to understand visually, I’m going to link a probate versus non-probate property infographic in the show notes that I think you’ll find really helpful.
And what if Tiffany’s parents actually did fund their revocable trust? Does that mean they’re stuck with it forever?
No, it doesn’t.
It might be possible to amend the existing trust depending on the terms of the trust and whether both spouses are required to amend it. Or, there’s another option.
Revocable trusts are designed to allow the trust assets to be used for the benefit of the people who created the trust, in this case, Tiffany’s parents.
So even if assets are already inside the existing trust, Tiffany’s mom likely can transfer assets from the existing revocable trust into a newly created revocable trust with updated terms that better reflect their current reality.
And this is exactly what I mean when I say that estate planning sometimes requires creativity.
People often assume that once dementia enters the picture, all planning stops. But that’s not always true. Sometimes the goal shifts and instead of building an entirely new plan from scratch, the focus becomes understanding the tools already in place and figuring out how to work within them.
If Tiffany and her mom feel comfortable doing this homework on their own, that’s wonderful. But if they need help organizing information, gathering documents, or creating a system that actually works in real life, I would strongly encourage them to reach out to Mollie Lacher of Sunny Care Services.
I’ve mentioned Mollie before on this podcast, and just like every other time, this is not sponsored. I recommend her because I genuinely believe the work she and her team do is incredibly valuable.
Earlier in the life of this podcast, I offered estate organization services myself. I don’t anymore because I’m practicing law again, but the need for this type of support is enormous.
Mollie’s team helps families create a clear, centralized system for important documents, accounts, contacts, and instructions before there’s an emergency. They also maintain a secure online repository of information so adult children aren’t left scrambling during a crisis trying to piece together information from drawers, filing cabinets, and sticky notes.
And for many families navigating aging parents, distance, busy schedules, or health concerns, having someone help maintain momentum can make the difference between intending to get organized and actually getting organized.
You can learn more about Mollie and her team at SunnyCareServices.com. I’ll also include the link in the show notes.
We’ve spent a lot of time talking about what Tiffany and her mom may still be able to do with Tiffany’s dad’s assets and planning. Other than creating a new pour-over Will for herself to direct assets to the new revocable trust that she creates, what else can Tiffany’s mom do?
Well, one of the most important things Tiffany’s mom can do is update her powers of attorney.
Most married couples name each other as their primary agents for both financial and healthcare decisions. The problem is that Tiffany’s dad is no longer able to serve in that role.
And this is where families can unintentionally create unnecessary administrative headaches for themselves.
Because if Tiffany’s mom becomes incapacitated in the future and Tiffany’s dad is still listed as her primary agent, financial institutions and healthcare providers may require proof that Tiffany’s dad is unable to act before they’ll allow the backup agent, presumably, Tiffany, to step in.
That can create delays, frustration, and additional paperwork during an already stressful situation.
So rather than forcing Tiffany or another successor agent to prove Tiffany’s dad’s incapacity later, I recommend that Tiffany’s mom proactively update her powers of attorney now and name someone else as the primary agent.
This is one of those small planning updates that can make a very big practical difference later.
And if Tiffany’s mom is going to update her financial power of attorney anyway, she might as well make sure it’s drafted as thoughtfully and clearly as possible. I’m going to link to Episode 68 in the show notes that talks specifically about best practices for financial powers of attorney, including some of the very common problems families run into when trying to actually use them in the real world.
Would this situation be simpler if Tiffany’s dad still had full capacity? Of course.
But does his dementia automatically mean meaningful planning opportunities are gone?
No, it doesn’t.
And I think that’s one of the biggest takeaways from today’s episode.
Even when life changes dramatically, there are often still paths forward. The key is understanding what tools already exist, what authority is already in place, and how to creatively adapt the plan to the reality in front of you now.
Even though Tiffany’s dad likely can’t sign new estate planning documents himself, that doesn’t necessarily mean the planning opportunities are gone. Tiffany’s family may still be able to use existing powers of attorney to allow Tiffany’s mom to act on Tiffany’s dad’s behalf, transfer jointly owned or probate assets into a new revocable trust, create a new revocable trust to better reflect their current goals and family dynamics, add Tiffany as a co-trustee to help with management, simplify outdated trust provisions that no longer make financial sense, update Tiffany’s mom’s own powers of attorney, and organize all of their information so the family can actually access and use it during a crisis.
Sometimes estate planning advice makes people feel like if they didn’t do everything perfectly at exactly the right time, the opportunity is gone.
But life is rarely that clean. Families age, diagnoses happen, documents become outdated, and relationships change. And sometimes people find themselves staring at an estate plan created 20 years ago wondering whether any of it still works.
What I hope you take away from today’s episode is that “imperfect” does not necessarily mean “hopeless.”
Sometimes the answer is understanding the tools already in place, figuring out what still works, and creatively adapting the plan to the life you’re living now.
Kind of like a pair of homemade Velcro sleeves made from a long-sleeve cotton t-shirt in the late 90s. They weren’t elegant or professionally designed. But they solved the problem in front of me.
And, that’s what good estate planning often looks like in real life. Not perfection. Just thoughtful, practical solutions that help real families navigate real problems a little more smoothly.
And if you’re listening to this episode realizing you’ve been avoiding your own “I really need to deal with this” list, let this be your reminder that you do not have to solve everything at once. Start by understanding what you already have, gathering information, and having conversations. Start somewhere.
And if you’re not sure whether your current estate plan still works for your life today, that’s exactly why I offer Estate Plan Audits.
Because most people don’t need someone to immediately sell them brand-new documents. They first need someone to help them understand the documents they already have, what still works, what may not, and where meaningful planning opportunities may still exist.
You can learn more about Estate Plan Audits at deathreadiness.com/audit. That’s deathreadiness.com/audit . I’ll also include the link in the show notes.
Because even when life changes course, there are often still meaningful ways to move forward.
Thanks for listening today.
This is Death Readiness, real, messy and yours to own. I’m Jill Mastroianni and I’m here to help you sort through it, especially when you don’t know where to start.
Hi, I'm April, Jill's daughter. Thanks for listening to The Death Readiness Podcast. While my mom is an attorney, she’s not your attorney. The Death Readiness Podcast is for educational and entertainment purposes only. It does not provide legal advice. For legal guidance tailored to your unique situation, consult with a licensed attorney in your state. To learn more about the services my mom offers, visit DeathReadiness.com.
