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Monday, May 9, 2011

Options for seniors diminish along with capacity

When anyone signs estate-planning documents such as wills and Powers of Attorney, the law says that the person must have the mental capacity to understand the consequences of signing the document.

An individual with full capacity can choose to sign - or not sign - any document. He has has full control over where his assets will go by signing the will that addresses his wishes. He is free to deal with his own money and property without interference by anyone else. He chooses who will look after his estate as executor, and who will act for him if need be under a Power of Attorney.

Unfortunately many seniors experience diminishing capacity. For most, it's a gradual process. As the loss of capacity progresses, legal options disappear, one by one. One of the first problems might be an inability to deal with money. This may manifest as anything from difficulty shopping for groceries to falling victim to a scam artist. The option to deal with his money as he sees fit gradually disappears, and the senior must have help. With any luck, he can still sign a Power of Attorney with the option of springing it into action when he needs it. In the meantime, he can rely on special bank accounts and informal help from family members.

As capacity continues to diminish, the need to have the Power of Attorney activated increases until eventually the senior must relinquish some or all of his control to the person he named as representative.

If the senior didn't act soon enough, there might not be a Power of Attorney in place. Once capacity declines, the option to prepare that document is gone. If the senior needs help with money, it's possible that a trustee might be appointed by the courts. Not only has the senior lost the option to prepare the document, but he has also lost control of the decision of who is to be his representative and what powers that representative will have. The process is imposed on the senior even if he doesn't want it. For some people, this means that all financial decisions are taken away.

The problem experienced by the senior might not have to do with money. It could well be a diminishing ability to live alone and complete daily tasks like cooking, shopping or getting around town independently.

With full mental capacity, living options are restricted only by finances. As abilities diminish, the senior must seek out help, which could be, for example, a housecleaner once a week, a nurse who comes to the house to help with shots or medications, or someone to drive the senior to appointments. At this point, the senior still has the option of signing a representation agreement or other supported decision-making document that appoints someone to help the senior with personal matters.

If capacity continues to diminish, the senior might have to rely on a Personal Directive (aka Advance Directive, Health Care Directive) that gives the chosen person full control over certain personal matters such as where the senior lives and which doctor he sees.

If the senior hasn't prepared a Personal Directive and has lost capacity, it could be that someone will have to apply to the courts to become the senior's legal guardian. At that point, the senior has lost all control over decisions.

While an individual has mental capacity, he or she can decide who is to be the executor of his or her will and who is to inherit. All options are open. If the senior didn't make a will while that option existed and dies without a will, the government decides who is in charge and who is going to inherit the estate.

The key to successful planning is to start early enough, while you're still mentally healthy and all your options are still open.

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