Burner Prudenti: Does a Dementia Diagnosis Mean It’s Too Late for Estate Planning?

Q: My mother was recently diagnosed with dementia, but she never completed her estate planning documents. Is it too late for her to sign a Power of Attorney, Health Care Proxy, or Will?

A: Not necessarily. A dementia diagnosis does not automatically mean a person has lost the legal capacity to complete estate planning documents.

Capacity is not all-or-nothing, and the level required depends on the document being signed. The legal standard for signing a Power of Attorney, for example, is not the same as the standard for signing a Will. Generally, executing a Power of Attorney requires a higher level of understanding, comparable to the capacity needed to enter into a contract, while executing a Will requires “testamentary capacity,” a somewhat lower standard that generally means understanding the general nature of one’s property, the natural objects of one’s bounty (family), and the effect of signing the document. What matters is whether your mother meets the standard of capacity for each document.

Someone in the early stages of dementia may still understand what she owns, who her family members are, whom she trusts to help with financial or medical decisions, and whom she wants to inherit her assets. If so, there may still be time to put important documents in place. That’s why families shouldn’t assume a dementia diagnosis means it’s “too late” to plan. At the same time, this isn’t something to put off. As dementia progresses, planning options can become much more limited.

Depending on your mother’s needs, her estate plan may include a Power of Attorney for financial and legal matters, a Health Care Proxy for medical decisions, a Living Will setting forth her end-of-life wishes, and a Last Will and Testament and/or Trust for her assets.

If there are questions about her capacity, an experienced elder law attorney can meet with her, talk through what she wants to accomplish, and determine whether she’s able to sign the appropriate documents. Every situation is different, and additional steps may be appropriate when capacity is a concern.

If your mother no longer has enough capacity to sign the documents she needs, the first step is to determine whether she already has anything in place that can help. An existing Power of Attorney, Health Care Proxy, Trust, or other arrangement may provide some of the authority needed. If not, a guardianship proceeding under Article 81 of New York’s Mental Hygiene Law may be necessary to give someone legal authority to make personal and/or financial decisions on her behalf.

Ideally, estate planning is completed before a health crisis or dementia diagnosis. But a diagnosis doesn’t necessarily mean it’s too late. If a loved one has recently been diagnosed, it’s important to find out what can still be done before those options become more limited.

— Alma Muharemovic, Esq.

Alma Muharemovic, Esq. is an Associate Attorney at Burner Prudenti Law, P.C., focusing her practice areas on Estate Planning. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.