Early-onset Alzheimer’s is a rare form of the disease in which an individual is diagnosed before age 65, usually in his 40s and 50s. Although the symptoms of early-onset Alzheimer’s disease usually mimic those of late-onset Alzheimer’s disease (AD), the impact of the disease is often more devastating because the individual may still have a job and children living at home.

To make matters worse, when a young individual with AD is forced to retire, his spouse may feel compelled to leave her own job in order to care for him. This may result in a double loss of income leaving the family unit financially strapped. The individual and his family must develop a well-defined legal and financial plan in order to preserve assets, maintain necessary income for the family, and employ a mechanism to ensure that trusted family members will make health and financial decisions for the individual once he no longer has the capacity to do so.

If the individual is still working, it is imperative that he investigate all options available to him, including early retirement. He must also look into whether he is eligible to receive income under a disability insurance policy. In addition, there may also be company benefits available to him.

In the event that the diagnosed individual was the breadwinner of the family and can no longer work, he can take distributions from his IRA without triggering the additional 10% excise tax. If the individual is under age 59 ½, withdrawals from a traditional (non-Roth) IRA are not only subject to income taxes, they are subject to an additional 10% excise tax unless certain criteria is are met. The exception criteria include distributions taken i) when you are disabled; ii) to pay qualifying medical expenses; iii) to pay health insurance if you are unemployed and iv) to pay for college education for qualified individuals.

Social security disability (SSD) benefits may also be available to the individual diagnosed with early-onset AD. To qualify for SSD, the individual must have worked in jobs covered by Social Security and must have a medical condition that meets Social Security’s definition of disability. Generally, he must have worked for at least 40 quarters (10 years). Those who are receiving SSD when they reach full retirement age, will have their monthly SSD payments automatically convert to traditional social security retirement benefits, but the amount remains the same. SSD recipients are eligible to receive Medicare benefits two years after the date of SSD entitlement.

Once a diagnosis of AD is made, the individual should consult with an elder law attorney in order to devise a plan to pay for future long-term health care needs and to execute appropriate advance directives while he still has capacity. Advance directives are typically comprised of a power of attorney, health care proxy, living will and burial rights designation.

The individual must also plan to preserve assets especially in light of the high cost of long-term health care. Often, the family will turn to the Medicaid program to pay for such care. It is important to meet with a professional early on to determine if the individual is eligible for Medicaid. Transfers or gifts of assets are treated differently for community Medicaid (which cover s hospitals, doctors and home health attendant care) and nursing home or institutional Medicaid. Currently, an individual can gift assets, get down to the Medicaid eligibility asset level ($4,150 for an individual) and receive home care benefits without a waiting period. The rules are very different for institutional Medicaid. The Deficit Reduction Act of 2005 has imposed a 5 year look back period for transfers for institutional care, although creative strategies can shorten the wait.

There is a unique planning opportunity for the individual with earlyonset who needs nursing home care but who has not planned in advance. An individual under the age of 65 can transfer assets to a “Self-Settled Under 65 Payback Trust,” bring his assets down to the Medicaid eligibility level, and not trigger a Medicaid penalty or waiting period. Medicaid will, however, be paid back for the care it provided from any money left in the trust at the time the individual dies.

Finally, a younger individual who needs nursing home care immediately individually can transfer his home to a child under the age of 21 without a penalty period. Other exempt transfers include those to a spouse and a blind or disabled child.

Engaging in a plan that will eventually make one eligible for Medicaid coverage might not be foremost on someone’s agenda when first diagnosed with early onset. Nonetheless, having such foresight will ultimately serve to preserve assets and mitigate many of the legal and financial challenges that individuals with early-onset will have to face.

— Ronald Fatoullah, Esq., CELA

	Ronald Fatoullah, Esq., CELA* is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, trusts & estates and special needs. The firm has offices in Forest Hills, Brooklyn and Great Neck, NY. *Certified as an elder law attorney by the National Elder Law Foundation.

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