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Competency Issues: When is it too late to create estate planning documents?

December 7, 2022

Diane S. Kotkin

The other day, I received a call from a client regarding her parents.  Her dad was diagnosed with dementia recently.  He is forgetting to pay his bills and take his medication.  She is trying to assist him but has had difficulties working with the bank and his doctor.  Her question to me was:  is it too late for her parents to create estate planning documents?

In a generation where more and more children are taking care of their aging parents, planning for incapacity is more important than ever. However, it is a difficult topic to address as a family.  Some seniors are reluctant to create a power of attorney that gives a trusted individual the right to make legal decisions on their behalf. To them, granting someone this power is seen as a loss of independence.  Some children are also hesitant to speak with their parents about incapacity planning as they do not want to anger or offend them.  These feelings lead to procrastination and, most often, nothing is done.

As an estate planning attorney, I will often receive calls from families who urgently need estate planning documents for a parent who has cognitive issues.  Sometimes I will meet with that parent and I can help them but there are other times where I need to decide whether the parent has the legal capacity to create a power of attorney or Will.

Mental capacity is a complex concept that is not necessarily black and white, especially when dementia is a factor. A client with some form of cognitive decline may experience moments of lucidity during which they could be legally competent to sign a legal document such as a power of attorney. The key is the client must be able to understand the legal documents they are signing, why the documents are needed and what they accomplish.  If a client does not have the capacity to understand the above, an attorney may require a medical professional to certify that the client does (or does not) have the mental capacity to understand and sign estate planning documents.

So if a person does not have the capacity to appoint a power of attorney for finances or healthcare, what needs to be done?  As in the case of my client above, legal guardianship and/or conservatorship must be pursued in Court where a Judge will appoint an individual who will make decisions for the incapacitated individual.  Such a proceeding can be avoided if a family can be proactive and not wait until it is too late to have legal documents completed.  An experienced and knowledgeable estate planning attorney can be an invaluable resource to you and your family through a very difficult time.

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