The path from capacity to incompetent can be slow and difficult to analyze.
Some of the most difficult calls we handle involve the question of when a parent can still make his or her own decisions.
As your Mother of Father ages, there may be times that you question if they are still competent because you wonder about some decision, such as money use or decisions about friends. Bringing up that question can be a difficult challenge, as Forbes discusses in the article in “Aging Parents at The In-Between Stage: Partially Competent and Partially Not.”
In that example, the aging parent presents well to the outside world, socializes well and seems to have all his faculties. The problem is, the children who know him see changes and worry about what might happen in the near future. Their father had always handled his own finances, and now he’s giving money away to anyone who asks for it. He is going through his accounts at a surprising rate, unlike his lifetime behavior of being an extremely careful money manager.
In this case, the first step for this family: a meeting with all the adult children and an estate attorney. [Note that an independent attorney may be required, as the attorney drafting the document represents the father, and could have a conflict of interest not including the father in the discussion]. They start with a review of the legal documents that had been prepared previously by the attorney. A Durable Power of Attorney had been put in place, when the oldest child had been appointed as his agent, with unrestricted powers. She had the legal authority to take over the management of her father’s accounts.
By using the Durable Power of Attorney, she was able to gain online access to all her father’s accounts to see what was actually going on. It was worse than the family expected. He had given money away to charities and to strangers. Armed with this information, she had to speak with her father. He bristled, but she persisted, knowing that she had the legal right to do this and the support of her siblings.
She suggested that she visit him to help out. It took several weeks of suggesting it, but at last, he relented. On his desk, she found collection notices and a cancellation notice from his car insurance company for failure to make payments. By presenting the prospect of not being able to drive because of a lack of insurance, she got his attention to the seriousness of the matter.
Next, his assets were moved out of accounts where he had access. He continued to give away his money, but she controlled how much damage he could do.
This family was able to protect their father from a free-fall into poverty and dependency, because proper estate planning had been done well in advance, and they sought out proper advice.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances.
Reference: Forbes (Dec. 3, 2018) “Aging Parents at The In-Between Stage: Partially Competent and Partially Not”