The call usually comes from the daughter.
Her mother is 81, still in the Encino house she and her husband bought in 1979, and three weeks ago a neurologist said the word dementia out loud for the first time. The daughter asks two questions, in this order: is it too late to do anything, and how long do we have? Her brother wants to wait and see how their mother is doing in the spring.
I have had this conversation with West Valley families since 1990. The first question is almost always premature. The second is almost always asked too late.
A dementia diagnosis is not, by itself, a legal deadline
California law starts from the opposite assumption. It presumes that every adult can make their own decisions, and a diagnosis by itself does not overcome that presumption. There has to be evidence of a real deficit in memory, attention, or the ability to process information, and evidence that the deficit affects the decision being made.
So “Mom has Alzheimer’s, she can’t sign anything” is not California law. It is a guess, and in the months right after a diagnosis it is often the wrong one. Families lose their best remaining months believing it.
Capacity is measured document by document
California does not have one capacity standard. It has several, and they rise with the complexity of what is being signed.
- A will has the lowest bar. Your mother needs to understand that she is making a will, know in a general way what she owns, and remember who her family is.
- A contract or complex financial decision asks more. She has to appreciate the rights, duties, risks and consequences of that specific decision.
- A trust sits in between. A simple amendment is treated much like a will. An intricate restructuring is treated much like a contract.
So your mother may still have the capacity to sign estate planning documents of one kind and not another. She may be able to sign a healthcare directive and a straightforward will on the same afternoon she cannot consent to an operating agreement restructuring four rental properties.
The window closes from the top down
The planning worth the most requires the most understanding, so it closes first. Take a Woodland Hills couple with rentals in Tarzana they bought in the 1970s. Preserving that Proposition 13 basis for their children involves coordinated structures where a different set of change-in-ownership provisions applies, which an attorney experienced in this area can use. But it takes a parent who understands entity ownership and the permanence of what she is signing.
The simplest documents last the longest. A family that waits does not lose its options evenly. It loses the most valuable ones first.
What we do first after a diagnosis
- The incapacity documents come first. A durable power of attorney, an advance healthcare directive and a HIPAA authorization are what keep a family out of conservatorship court, and they stay available longest because they are simpler to execute. See foundational estate planning for what each one does.
- Then we read the existing plan and check the funding. Most families this age have a trust. Many have one that was signed years ago and never used to retitle the house or the accounts.
- Then the long-term care math. Skilled nursing in Los Angeles County runs $10,000 to $14,000 a month, and the Medi-Cal 30-month lookback is triggered by the date the application is filed, not the date of a transfer.
- And one warning, every time. Do not transfer the house to the children. The home is exempt for Medi-Cal eligibility, so the transfer buys nothing, and it triggers a Proposition 19 reassessment the children will pay for as long as they own the property.
Capacity also fluctuates. Scheduling a signing appointment for a parent’s best hours is not a small detail, and for most families facing cognitive decline that means morning.
If the window has already closed
Sometimes it has, with no power of attorney in place. What is left is a conservatorship, a court proceeding in which a judge appoints someone to manage her affairs under ongoing supervision, at considerably more cost than the documents it replaces.
But the options are not zero. Where a durable power of attorney was signed while capacity still existed, the named agent can often act, and there are strategies available even when a parent is already in rehabilitation. They are narrower and require precise execution. See crisis Medi-Cal planning.
Key Takeaways
- A diagnosis alone does not establish incapacity in California. The law presumes capacity until a specific deficit is tied to a specific decision.
- Capacity is document-specific, and the most valuable planning requires the most of it. The best tools close first.
- Never transfer the family home to protect it from long-term care costs. It is already exempt, and the transfer triggers a Prop 19 reassessment.
Find out how much window you actually have
If a parent has been diagnosed and you are not sure what can still be signed, that question has an answer worth getting now. A first conversation is straightforward: what documents exist, what shape they are in, how things are titled, and what is realistically still available.
Call 818-292-8160 or schedule a consultation. We serve families throughout Woodland Hills, Calabasas, Tarzana, Encino, West Hills and the broader West Valley.