The New York Times recently had an article entitled "Money Woes Can Be Early Clue To Alzheimers" which is a case study on why early estate planning and having powers of attorney in place before there are competency issues is important -- especially to avoid later charges of undue influence and competency. It also raises the issue, however, of “What do we mean when we say someone has enough decision-making capacity to be ‘competent’?" The issue promises to become even more complicated as researchers and doctors diagnose Alzheimer’s earlier and earlier.
The article notes that the Financial Industry Regulatory Authority, the largest nongovernmental regulator for securities firms doing business in the United States, recently met with individual financial services companies and the Alzheimer's Association to formulate guidelines on how to deal with clients who have trouble remembering and reasoning, a problem that is not new but is increasing as the population ages.
On one hand, it is generally agreed that decisions by a competent adult should be respected. On the other hand, if new brain scans and other methods show signs that a person is developing dementia, does that mean the patient should be watched, or that there should be limits on his or her abilities to make financial or legal decisions?
The article cites experts who say confusion over money and finances is perhaps the most important and most predictable early functional change as people descend into dementia. For lawyers, the main question is at what point a client lacks the capacity to execute a will, trust or other document, and who decides when that point has been reached. And if a lawyer lets a client go ahead, will the document be challenged?
The American Bar Association's Commission on Law and Aging created guidelines on this issue in 2005 entitled "Assessment of Older Adults With Diminished Capacity." The guidelines that include warning signs of diminished capacity, like memory loss and problems communicating and doing calculations. The guidelines instruct lawyers to look at the legal requirements for capacity in specific situations, like making a gift. Courts are always struggling to come up with principles and definitions of capacity and definitions of capacity vary among the states.
With respect to probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles probate attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221 to request a consultation.
The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.
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