Estate Planning LawyerDementia is a sinister ailment that comes with age. It leaves us bereft of our reason and awareness. Unfortunately, we have very little idea of who and when we may fall victim to this condition before it happens. If we wait too long, it can preclude the ability to prepare, resulting in severe legal and financial consequences. 

Testamentary Capacity Is Required to Execute Estate Planning Documents

Dementia impacts many elements of legal planning. For example, signing a will – can a person with dementia sign a will?  The law requires that the person signing a will must have “testamentary capacity” in order for the will to be  valid. This means that the person signing must have the ability to make consistent reasoned decisions about their person and property and basically understand what he or she is signing. If capacity comes and goes as is often the case with dementia patients, a moment of clarity can be enough to establish capacity. If the signer understands the nature and consequences of their act at the specific time they are signing their estate planning documents, the person has capacity. 

Some general criteria for capacity would be the ability to:

  • Remember who relatives are, and to articulate who should inherit their property
  • Understand the nature and extent of their property
  • Understand the document of a will, and how it distributes property
  • Understand how all of these things are related; i.e. that the purpose of the will and its role in distributing  property to family members

Anyone with an interest in an estate can contest a will if they believe the signer lacked the mental capacity to sign and understand it.  Although there is a general presumption of capacity under law, it is important for the attorney to ensure that the person signing the will is competent. For a person with diminished capacity who has a moment of clarity at the time of signing, the attorney may consider having the signing videotaped, or have witnesses speak to the competency of the signer at the time of execution in order to evidence or defend the validity of the will. 

A Good Power of Attorney Can Help Family Members Make Decisions

It’s important to have a good, durable power of attorney to help plan for all eventualities and enable family members to make important decisions on behalf of someone who lacks capacity. A power of attorney that grants only limited powers may not be sufficient to protect the individual’s interests and could result in a lengthy court battle to make important decisions for the benefit of an elder with dementia.

One example of how a deficient power of attorney can impact a family is the case of a child who may be prohibited from pursuing Medicaid planning on behalf of a parent because a power of attorney lacks certain powers. If the power of attorney does not authorize the child to make donations, establish trusts, engage in self-serving transactions, or other necessary steps to qualify a parent for Medicaid, the financial consequences could be devastating. 

For these reasons, it is critical to pursue proper legal planning for a family member who has dementia – before it’s too late, and important decisions regarding care are left to the whims of the court system.

An Experienced Estate Planning Attorney Is Key

Even the best power of attorney may not be capable of solving every problem, so it’s important to consult a knowledgeable estate planning attorney who can help you navigate these situations, and prevent deficient documents from interfering with the care or legacy of a family member who has dementia. 

Thanks to our friends from Theus Law Offices for their insight into estate planning.