Wills and trusts

A will and a trust are two ways to say what happens to your money and property. A will takes effect only after death. A living trust can also help while you are alive, by letting someone you trust manage your property if you can no longer do it.^1,11

After a dementia diagnosis, time matters. A person needs a certain level of understanding to sign these papers. So the best time to make or update them is early, while the person can still take part and say what they want.^1,2

Will, living will, living trust: what is the difference?

These names sound alike, but they do different jobs.

A will cannot be used to make health care choices.¹ For that, see advance directives and health care agent. For money during life, see durable power of attorney. Most families need several of these papers, not just one.

Capacity: can a person with dementia still sign?

Capacity here means the mental ability to understand a legal paper and what will happen because of it. It is a legal question, not only a medical one.^2,13

Some key facts:

• It depends on the task. Different papers can need different levels of understanding.² A simple will for a small estate asks less than a complex plan with many people and assets.¹³
• A diagnosis is not the end of the story. If a person understands what a paper means and why it matters, they likely can sign it.² Memory tests like the MMSE can show changes, but they do not measure legal capacity on their own.¹³
• In Virginia, a person of unsound mind cannot make a will.³ The same level of capacity needed for a will is also needed to create or change a revocable trust⁸ or a transfer on death deed for a home.⁹

Because dementia gets worse over time, a person who can sign today may not be able to sign next year. That is why planning early is so important.^1,2

Ways to protect the plan:

• Talk the paper over with the person before signing, in plain words.²
• If you are unsure, ask the doctor for an opinion on capacity. A note in the medical record from around the signing date can help later.²
• Plan the signing for a time of day when the person is usually most alert, and let them speak for themselves.

Wills: the basics

A will (also called a "last will and testament") does two main things:¹

• Names beneficiaries, the people or groups who get your property
• Names an executor, the person who manages the estate and hands things out after death

The executor has no power while you are alive.¹ If the person with dementia needs someone to pay bills now, that is the job of a power of attorney or a trust.

Virginia will rules

As of October 2026, Virginia law says:

• Who can make one: an adult of sound mind. A minor who is not emancipated cannot.³
• Typed or printed wills: must be in writing and signed by the person (or by someone else in front of them, at their direction). The person signs or confirms the will in front of two competent witnesses who are present at the same time. The witnesses then sign in front of the person.⁴
• Handwritten wills: a will written fully in the person's own hand can be valid without witnesses at signing. But after death, two disinterested witnesses (people who get nothing from the will) must confirm the handwriting and signature.⁴
• Self-proving wills: the person and both witnesses can sign sworn statements before a notary. A court then accepts the will without calling the witnesses to testify.⁵ This can save time and trouble later, especially if the witnesses are hard to find.

A homemade will can be valid if it follows these rules.⁴ But with dementia in the picture, a lawyer can help make sure the will is signed properly and is harder to challenge.

What happens without a will?

If a person in Virginia dies without a will, state law decides who gets their property. These rules are called intestate succession.^6,7

• If the person was married and all their children are also children of the surviving spouse, the spouse gets everything.⁶
• If some children are from another relationship, the spouse gets one third, and the children share two thirds.⁶
• With no spouse, children and their descendants get it all. Then come parents, then brothers and sisters, then more distant relatives.⁶
• Debts and funeral and estate costs are paid before anyone inherits.⁷

The state's plan may not match what the person wanted. A will lets them choose.

Some property does not pass by will

A will does not control everything. For example:

• Money in a joint account usually goes straight to the other owner at death.¹²
• Property in a trust follows the trust's rules.¹¹
• In Virginia, a transfer on death deed can pass a home to a named person at death. It must be recorded in the land records before the owner dies.¹⁰

Ask the lawyer to look at every account, deed, insurance policy and retirement plan. Make sure the names on them fit the overall plan.

Revocable living trusts

A revocable living trust is a legal arrangement that holds property for you. "Revocable" means you can change it or cancel it while you are still able to make decisions.¹¹

There are three main roles:¹¹

• Settlor (also called grantor): the person who creates the trust
• Trustee: the person or bank that manages trust property. Often the settlor is the first trustee.
• Successor trustee: the backup who takes over if the first trustee cannot serve

Why families with dementia consider one

• Smoother handoff. If the person loses the ability to manage money, the successor trustee can step in. No court case is needed for trust property.¹¹ The trust paper should explain how that moment is decided.¹¹
• May avoid probate. Depending on state law and your situation, trust property may pass without probate (the court process for handing out a person's property after death).¹
• Clear instructions. The trust can say how to spend money on the person's care during life, and who gets what after death.¹¹

Limits to know

Because a trust only covers what is in it, many people with a trust also have a power of attorney for everything else.¹² Ask your lawyer whether you also need a simple will to catch anything left outside the trust.

If you are the trustee

A trustee is a fiduciary, someone who must act in another person's best interest. The federal consumer bureau lists four basic duties:¹¹

1. Act only for the person's benefit. Do not lend or give trust money to yourself or others unless the trust allows it.
2. Manage the property with care. Pay bills and taxes on time and invest wisely.
3. Keep trust money separate from your own. Never put it in your own account.
4. Keep good records of all money in and out. Save receipts, even for small items.

Special needs trusts

A special needs trust (sometimes called a supplemental needs trust) holds money for a person with a disability. When set up correctly, the money can pay for extras without ending benefits like Supplemental Security Income (SSI) or Medicaid.^14,15 There are three main kinds. The rules are strict and differ by program and state, so get help from an elder law attorney.

1. Trusts funded by someone else (third-party trusts)

A parent, spouse or other relative can leave money in a trust for a person with dementia, instead of leaving it to them outright. If the person with dementia cannot cancel the trust or direct how the money is used for food or housing, SSI generally does not count it as their resource.¹⁵

This matters for couples. If the healthy spouse dies first and leaves everything outright to the spouse with dementia, that money could count against Medicaid. Federal Medicaid law treats a trust set up in a spouse's will differently from one set up during life.¹⁶ So the healthy spouse may need to update their own will too. Ask a lawyer how this works in your state.

2. Trusts funded with the person's own money (first-party trusts)

A person with a disability who is under 65 can have their own money placed in a special needs trust. This could be savings or an inheritance.^14,16 This can matter for people with young-onset dementia.

• The trust must be for that person's sole benefit.¹⁴
• Since December 2016, the person can set it up themselves. A parent, grandparent, guardian or court can also set it up.¹⁴
• When the person dies, money left in the trust must first pay back the state for Medicaid care it paid for.^14,16

3. Pooled trusts

A pooled trust is run by a nonprofit group. Each person has a separate account, but the money is pooled for investing.^14,16 There is no age limit to join. But for someone 65 or older, putting money into a pooled trust may lead to a penalty, depending on the program.¹⁴ Leftover money at death may go to pay back Medicaid, or stay with the nonprofit.¹⁴

For how trusts affect nursing home coverage, the look-back period for gifts, and protections for a healthy spouse, see Medicaid and long-term care.

What to do now

1. Gather what exists. Find any old will, trust, deeds and account statements. Make a list of what the person owns and owes.²
2. Talk as a family. Ask the person what they want. Write it down in their words. See sharing care with family.
3. Book a lawyer soon. An elder law attorney knows dementia, Medicaid and trusts. See finding an elder law attorney.
4. Ask the doctor for a note on the person's ability to make decisions, if there is any doubt.²
5. Sign the full set together: will or trust, power of attorney and advance directive.
6. Fund the trust, if you make one. Retitle accounts and property into it.¹¹
7. Store papers safely. Tell the executor or trustee where the originals are.

Common questions

We waited too long. Is it too late?

Not always. Capacity can be different from day to day, and the bar depends on the paper.^2,13 A lawyer and doctor can help judge whether the person can still sign. If not, a court may need to name someone to act for them. See guardianship and conservatorship.

Does a living trust replace a power of attorney?

No. The trustee can manage only property that is in the trust.¹² A power of attorney lets an agent handle other money and property matters.¹ Most people need both.

Can a trust protect the house from nursing home costs?

A revocable trust cannot. Medicaid counts its property as the person's own.¹⁶ Other kinds of planning exist, but they have strict rules and timing. Talk with an elder law attorney first, and read Medicaid and long-term care.

My parent wants to change their will to leave everything to one helper. What should I do?

Stay calm and gently ask why. Sudden big changes can be a sign of undue influence (unfair pressure from someone else).¹³ Suggest the person meet with a lawyer alone. If you suspect abuse, see scams and financial abuse.

Education only. This page is general information written from the sources listed. It is not medical, legal or financial advice and does not replace a doctor, therapist or lawyer who knows your situation. How we write and check pages.