Why Diminished Financial Capacity Is So Dangerous for Seniors

Q & A:

QUESTION

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Q:What is “diminished financial capacity,” and why is it so dangerous for seniors?

—Concerned Caretaker

ANSWER

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A: Dear Concerned:

The National Institute on Aging estimates that nearly half of all Americans will develop some form of dementia, such as Alzheimer’s Disease, during their lifetime. And while the cognitive decline brought on by dementia affects a variety of different mental functions, one of the first mental abilities to go is one’s “financial capacity.”

Financial capacity refers to the ability to manage money and make wise financial decisions. Cognitive decline brought on by dementia often develops slowly over many years, so a diminished financial capacity frequently goes unnoticed—often until it’s too late.

Moreover, studies have shown that seniors’ confidence in their money-management skills can actually increase as they age, which puts them in a perilous position. As seniors begin to experience difficulty managing their money, they don’t realize they’re making poor choices, which makes them easy targets for financial exploitation, fraud, and abuse.

As your trusted family lawyer, we can help you put estate planning tools in place to protect your elderly family members and their assets from the cognitive decline brought on by dementia and other forms of incapacity.

This article is a service of Legacy Counsel PLC, a trusts and estates law firm in Saint Joseph, Michigan. We don’t just draft documents; we ensure that you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning Session, during which you will get more financially organized than you’ve ever been before and become empowered to make all the best choices for the people you love. You can begin by calling our office today at 269-932-4017 to schedule a Life & Legacy Planning Session. Or you can schedule your appointment online here. Mention this article to find out how to get this $750 session at no charge.