Problems Handling Money May be an Early Clue to Dementia
Author: Patrick Burns & Associates
Synopsis and Key Points:
Confusion over financial matters may be the most predictable early indication of diminishing capacity or dementia.
Main DigestResearchers have found that confusion over financial matters may be the most predictable early indication of a person's diminishing capacity. This makes estate planning decisions especially important.
Having the capacity to make informed decisions can mean the difference between solvency and financial ruin. Unfortunately, older adults can experience problems in continuing to manage their financial affairs, especially if dementia is involved. These problems also can be compounded because early symptoms of dementia may not be obvious.
However, researchers have recently found that confusion over financial matters may be the most predictable early indication of a person's diminishing capacity. "Decisional capacity" refers to the ability to make competent choices about one's financial affairs. Capacity can also be a clinical term, by which a health professional determines whether an individual can make specific decisions, but it takes a court to rule on whether a person has the mental capacity to change a will or handle his or her own affairs.
The issue has become more difficult as advances in Alzheimer's and dementia studies have lead to earlier diagnoses. Doctors have become able to determine who is at risk before symptoms become apparent. The question then becomes, "At what point does a person lack the capacity to make important decisions" The answer has important implications for estate planning.
Attorneys and financial advisers often encounter situations in which their clients have begun to make questionable financial decisions. There are numerous horror stories of people who have lost their life savings or been the victims of fraudulent transactions that have cost them thousands of dollars.
A legal or financial professional's first duty is to the client, and there is an understandable reluctance to voice concerns to others for fear of violating professional ethics or legal duty not to disclose clients' affairs. If a legal or financial professional suggests that a client seek assistance, the client might be resentful and discharge the professional. Further, refusing to undertake a questionable request by asking a client to seek other counsel might not be in the client's best interest.
Proper estate planning that anticipates a client's diminishing decisional capacity might resolve some of these issues. Having a health care proxy or advance directive that names a trusted individual or family member to make health care decisions is important. It may enable matters to be directed to a court where a conservator can be appointed to ensure that proper financial decisions are made. Also, having a durable financial power of attorney that appoints a trusted individual in the event of mental incapacity is another option for avoiding the costly procedure of obtaining a court-appointed conservator.
If you have questions about how dementia or other issues of decisional capacity can affect estate planning, contact one of the experienced attorneys of Patrick Burns & Associates.
Article provided by Patrick Burns & Associates Visit us at www.patrickburnslaw.com
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