According to Alzheimer’s Australia, there are nearly half a million Australians currently living with dementia, and by 2025, this number is expected to triple. How should families of vulnerable older people help them to protect themselves and their assets?
There are several different types of dementia, including Alzheimer’s disease, Vascular Dementia, Dementia from Parkinson’s disease and similar disorders, Dementia with Lewy bodies, Frontotemporal dementia (Pick’s disease), Creutzfeldt-Jakob disease, and others.
Some of the early effects are mild. Symptoms can seem to come and go, and people can have good days and bad days.
In the legal world, there is an emphasis on something called “capacity”, which usually refers to a person’s “testamentary capacity”.
In order for a Will to be valid, the Will-maker must have had testamentary capacity at the time it was made. Wills made by older and vulnerable Will-makers are often challenged on the basis of a lack of testamentary capacity, or if it is suspected that the Will-maker was acting under undue influence.
The test for testamentary capacity is: A person must be of sound mind, memory and understanding to make a Will. In order to have the requisite soundness of mind the person must:
- understand the nature and effect of a Will;
- understand the nature and extent of their property;
- comprehend and appreciate the claims to which they ought to give effect;
- be suffering from no disorder of the mind or insane delusion that would result in an unwanted disposition.
Capacity can be affected by pain & medication.
Families often wind up in our office to discuss their concerns that a loved one is showing signs of Alzheimer’s or dementia, even before they meet with doctors. That’s because a lot of the early warning signs of Alzheimer’s tie into legal and financial issues. Alarm bells tend to go off when money goes missing, bills pile up, cheques go uncashed, or the elderly relative is spending an unusual amount of time on the phone talking to marketers or “charity” representatives.
Even more concerning is when the elderly relative seems to have “a new friend”, or is receiving a lot more attention from a particular person in their life. Then suddenly their Will or Power of Attorney is being revised…
If this happens in your family, you need to act quickly.
If the family waits too long to take action, a doctor could determine that the elderly relative no longer has the “mental capacity” to sign legal documents such as a Power of Attorney that would permit another person to take over his or her affairs. The only option left would be to petition the SACAT (South Australian Civil & Administrative Tribunal) for a Guardianship, which is stressful, time-consuming and puts decisions about your loved one’s future into the hands of some overworked bureaucrats that don’t know you or your family’s wishes.
Of course, all of this could be avoided by planning ahead. Talk to your older loved ones about creating legal documents that would allow someone they trust to take control in the event of incapacity. Stress to them the importance of getting things in order now, while they still are well and of sound mind, so that they ultimately can have a say in how their assets are managed and how they are cared for, if something happens.
We can help you work through this process, so please call the office on
(08) 8212 7233 to set up a consultation.
The planning that can be done for your loved one really depends on the progression of the disease and your loved one’s ability to make decisions and understand consequences. In this article we outline some of the “red flags” that the family should be looking out for, as well as your planning options for each stage leading up to incapacity.
Many of the early clues that an individual is experiencing diminished capacity directly correlate with legal and financial issues. It’s often missing money, an impulsive changing of the Will, unpaid bills, excessive “sweepstakes” entries and support of new “charities” that raise alarms for loved ones that perhaps something isn’t quite right.
A major concern with these families is, “How do we stop the financial and legal damage while we are working to get a proper diagnosis from a physician.”
The best case scenario occurs when the elderly relative has planned ahead. If he or she has a Power of Attorney in place that gives other family members permission to take over legal and financial matters in the event of incapacity, the family has a clear path to quickly and easily implement their loved one’s wishes as outlined in their documents.
If the diagnosed individual had no prior legal planning in place, what can be done depends solely on his or her mental state. If the individual is in the very early stages of Alzheimer’s and has significant periods of clarity and lucidity, he or she may still retain the “mental capacity” necessary to sign legal documents and appoint someone else to oversee his or her affairs.
This will ultimately give the family the ability to take back the chequebook, catch up on bills that are behind, stop the weird payments, cut off the telemarketers that are preying on the vulnerable individual, before the situation can spiral out of control.
However, if a doctor and/or attorney determines that your loved one no longer has the ability to make sound decisions and understand consequences, no further legal documents can be signed and executed. In this situation, the family will need to petition the Tribunal (Guardianship Board) for a Guardianship, which is a stressful and lengthy process to legally appoint someone else to oversee the personal and/or financial affairs of someone else. It is better to avoid this by planning ahead.
If you are picking up on financial and legal warning signs that an elderly loved one is experiencing some mental incapacity, act fast. Are they exhibiting memory loss? Keep an eye on stacks of mail (and bills!) piling up around the house. If your loved one is spending a lot of time on the phone, directly ask if it’s a salesperson or “charity” calling. Find out who their lawyer, accountant, financial advisor, etc. are, so that you can approach them with concerns and benefit from their guidance and support.
The sooner you can spot signs of a problem and get professional help from doctors and advisors, the sooner you can protect your loved one, take control, and make the transition into this new phase of life easier for everyone. Call us on (08) 8212 7233 to schedule your complimentary 15 minute telephone consultation to find out what your options are for implementing sound legal planning.
By the way, each year in September is world Alzheimer’s Month, where people like us work to raise awareness about Alzheimer’s, senility, dementia and the importance of early planning to minimise their effects. Spread the word.
SPECIAL REPORT “7 Things You Must Know Before You Make Your Will”
In this report you will Learn:
Why home-made Wills can be a LOT more expensive than you might think.
The secret weapons used by the rich & powerful to protect their assets, and transfer their wealth two or three generations ahead.
How Estate and Trustee Companies make BIG money from “free” Wills.
The Most Common Estate Planning Mistakes, how they can cost your family a fortune, and How to Avoid Them.
The Elements of a Sound Estate Plan – why a Will alone is not enough.
How to Make Sure Your Assets Stay in Your Family and are not lost to creditors, lawsuits or ex-spouses.
How to guard against challenges to your Estate after you’re gone.