New York residents who have planned for the disposition of their assets upon their death should consider making provisions in case of their mental incapacity. It is important to be sure that the estate is protected and that a person's plans for the estate do not change due to mental incapacity. Individuals should keep in mind that there is a difference in dementia and the forgetfulness that comes with ordinary aging. It is normal for people to forget things like names as they age. Older people may also have more difficulty learning, but neither of these things indicate that someone is unable to make competent financial decisions.
When people start to forget conversations or struggling to communicate, this may indicate a growing dementia. Individuals who are involved in their estate planning may wish to discuss how they would like their financial planner, their family and their legal advisers to handle the estate if they show signs of cognitive impairment.
Documents that should be prepared include durable powers of attorney for health care and financial matters as well as a living will. It is important that individuals establish that they are of sound mind so that these documents cannot be challenged as well as working with advisers to periodically review the documents to make sure they remain up to date.
Insurance considerations are also important including health insurance, disability insurance and long term care insurance. An estate planning attorney may be able to provide assistance with these matters. For family members of individuals who are no longer competent, an attorney may also be helpful in establishing a conservator or guardian to handle the estate.
Source: Wealth Management, "Dealing with Client Incapacity", Steven Podnos, June 02, 2014