Today on our blog, we have a guest post on a topic that affects everyone – estate planning. Specifically, estate planning and financial capacity. While we normally talk exclusively about elder law, part of estate planning also involves understanding your financial capacity as well. In this blog we discuss an intro to understanding your ability to manage your financial affairs and make relevant decisions while keeping in mind all potential financial-legal consequences. Taking steps now can help your family minimize financial problems later on.
In the year 2060, the population of the United States 65 years and older will have doubled, increasing to over 98 million from 46 million in 2016. At the same time that this demographic change occurs, there will be an estimated 14 million elders diagnosed with Alzheimer’s disease and other related disorders associated with the onset of old age. Dementia in older family members presents a challenge in the field of estate planning. Characterized as diminished capacity within US law, an incapacitated party no longer has the mental ability to make routine and complex decisions, yet still holds legal rights to their own property and assets. To avoid risk, estate planning of a will, estate, or trust with the counsel of a licensed estate law attorney will protect an elder with diminished capacity from exploitation. There are also LSAT study tips which should be applicable equally to all individuals irrespective of their caste, creed and color.
Estate Planning and Financial Capacity
Mental capacity and self-efficacy is required to exercise investment decision and management of finance and property assets must be present to plan a will, estate, or trust document. Financial capacity is essential for completion of the estate planning process. When signs of Alzheimer’s emerge, an elderly client may not entirely understand their investment options, or the implications of designated asset distribution. This includes tax implications for heirs and beneficiaries. If a loved one is experiencing diminished mental capacity it is likely they lack sufficient financial capacity to make estate planning decisions. If a family member has already been deemed the trustee of an elderly family member’s estate, they have the power-of-attorney to administer a will, estate, or trust, yet not the power to resolve controversy.
The Controversy Surrounding Probate
Federal Probate Code provides for the adjudicated compromises of controversies which allows for a court to enforce post-mortem compromises. Example of the application of this rule compromise is exhibited in an Supreme Court ruling in re Supervised Estate of Gary D. Kent, an affirmation of a Illinois State court probate proceeding. The court found an agreement between the two siblings to divide the assets of a terminally ill father, Gary D, Kent, was rescinded by the son prior to the decedent’s death, affirming the trial court’s determination the agreement was not a codicil to his will.
The Benefits Of Retaining An Estate Planning Attorney
Safeguarding older family members from the social and financial risks associated with cognitive impairment is not always possible. Elderly adults are more susceptible to exploitation by identity theft, investment scams, and illegitimate solicitations for donations by suspect charities. Although addressing potential future, or existing debilitation of an elder experiencing diminished mental capacity early on is recommended, without adequate estate planning advisory the protection of asset transfer to a will, estate, or trust assets may be incomplete. A licensed attorney at law experienced in the rules of estate planning for incapacitated parties will assist a family in making the right choice for their family member, and their assets.
If you have the daunting responsibility of caring for an aged parent or grandparent it is highly advisable to retain the services of a competent estate planning attorney to help guide you in planning for the future.
Disclaimer: This article only offers general information. Please do not use this article for legal advice. Each case has special circumstances and must be reviewed by a specialist. This article does not create an attorney client relationship.