The National Institute on Aging estimates that nearly half of all Americans will develop some form of dementia, such as Alzheimer’s Disease, during their lifetime. And while the cognitive decline brought on by dementia affects a variety of different mental functions, one of the first mental abilities to go is one’s “financial capacity.”
Financial capacity refers to the ability to manage money and make wise financial decisions. The cognitive decline brought on by dementia often develops slowly over many years, so a diminished financial capacity frequently goes unnoticed.
Studies have shown that seniors’ confidence in their money-management skills can actually increase as they age, which puts them in a perilous position. As seniors begin to experience difficulty managing their money, they don’t realize they’re making poor choices, which makes them easy targets for financial exploitation, fraud, and abuse.
If you or someone in your family is concerned about the prospect of financial impairment, you should know that it’s very important to get certain legal documents in place before cognitive decline makes it impossible for you to understand the issues and make informed decisions.
However, you can not make a legally valid will, power of attorney, or other legal documents unless you are of what’s commonly called sound mind—that is, you must understand your family circumstances, act of your own free will, and understand the consequences of your choices.
At Truest Law, we can help you put the correct estate planning tools in place now to protect your loves ones and assets in the future.