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Can a loved one with dementia create an estate plan?

On Behalf of | Mar 27, 2024 | ESTATE PLANNING - Estate Planning

As our loved ones age, we tend to worry about their health, their financial stability, and the sort of estate plan that they have in place. If your loved one doesn’t have an estate plan, then their assets could be at risk of being lost to creditors, being inherited by those who they don’t want to obtain assets, and being subjected to taxation. That’s why it’s critical to discuss estate planning with your loved ones if you get a chance.

Estate planning with Alzheimer’s or dementia

But what if your loved one is suffering from a mental health condition like Alzheimer’s disease or dementia? Can they still create an estate plan?

Yes. To create a legally valid estate plan, you simply have to have testamentary capacity. This basically means that you have the mental wherewithal to understand the nature and extent of your assets, to whom you’re leaving them and how, and how all of this coalesces into a coherent estate plan.

Therefore, even when suffering from a serious mental health condition, your loved one could experience periods of lucidity that allow them to possess the requisite testamentary capacity.

How to show testamentary capacity

If you or your loved one are concerned that mental capacity will be challenged, then you might want to help facilitate the following:

  • A medical evaluation so that there’s an expert who can speak to your loved one’s mental condition shortly before creation of the estate plan.
  • The giving of a gift to someone who is not set to inherit, as their acceptance will signify their agreement that your loved one has adequate mental capacity to make decisions regarding the distribution of their assets.
  • Witnesses who can observe your loved one and their mental condition in the moments leading up to the estate plan’s execution.

Just remember, you don’t want to give the appearance that your unduly influencing your loved one to act in a certain way, so just bring these topics up and allow them to make their own decision.

Seek further estate planning guidance if you need it

A faulty estate plan can cause a lot of headaches and cost a lot of money. If you and your loved one want to avoid that from happening, then it’s time to learn as much as you can about the estate planning process and how to put it to work for you and your loved one.