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At Family Estate Planning Law Group, we know how hard it is to watch a loved one’s memory or decision-making abilities change. When we work with families, one question that often arises is, “Can someone with dementia sign legal documents?” And the answer is yes, they may be able to. That’s because legal capacity is not tied to a medical diagnosis. But how does legal capacity work, and what happens if someone is legally capable but is making harmful decisions?
What You Need To Know About Legal Capacity
To sign a legal document, a person must have the mental ability to understand what they are signing and how it affects them and the people they care about. When it comes to estate planning, that means understanding what they own, who might typically inherit from them, and what it means to create a will, trust, or other planning document.
Different legal documents require different levels of understanding. For example, the legal threshold to execute an estate planning document is less than what is required to enter into a contract. Contracts involve an agreement between two or more people, so the law expects each person to have a stronger understanding of the terms, details, and impact of the transaction.
Although this concept makes sense in theory, it’s not always so simple in practice. A condition like dementia will come in various degrees and have different effects from one person to the next, and may even change from day to day.
The bottom line when it comes to dementia and signing legal documents is this: a diagnosis of dementia can play an important role in assessing a person’s legal capacity, but it won’t automatically make them incapable. However, it can complicate things, especially when a person is showing signs of memory loss but hasn’t been formally diagnosed.
Real-Life Example: The Vegas Friend
These situations are often more complicated than they appear. One story that illustrates this involved a client whose judgment had begun to change, even though he still appeared fully functional in conversation.
He could hold discussions, understand what was being said, and seemed aware of his surroundings. At the same time, he began writing checks to someone who contacted him asking for money. He believed he was helping someone in need.
We spoke with him and explained that this sounded like senior fraud. He agreed and assured us he would not send any more money. At the time, he appeared sincere.
But he did it again.
The family felt stuck. From a legal standpoint, he was not incapacitated. No physician was willing to state that he lacked capacity, because he could still communicate clearly and make basic decisions. Yet his judgment around finances was clearly declining.
Because we had already helped him create a thoughtful estate plan, the right safeguards were in place. After the third incident, the family was able to step in and protect him using the legal tools he had chosen while he was still capable.
This is a common challenge for families. The legal standard for incapacity is high, and medical professionals are often hesitant to get involved unless impairment is severe. Without proactive planning, families may have no way to intervene until significant damage has already occurred.
Here’s what we saw happening:
- The family recognized something wasn’t right and needed support.
- His judgment regarding handling his financial affairs had changed, but not enough for a doctor to declare that he was legally incapacitated, and take away all of his legal rights.
- He had planned ahead, which gave the family the ability to act when it mattered, as the client during the planning process, created a designated “panel” of people he trusted, and that knew him best, to provide legal guardrails to prevent the situation from happening again without outside opinions of doctors.
These gray areas are more common than many families realize. That is why working with an experienced legal team early on is so important. With the right planning, families can step in at the right time and protect the people they love.
How Our Estate Planning Approach Solves This: The Health Care Panel
At Family Estate Planning Law Group, we take a different approach from other firms. Our estate plans are designed with a disability panel that includes trusted loved ones, not just doctors. The purpose of this panel is to allow the family to step in sooner and take legal action before disastrous and irreversible damage is done. This means the family:
- Does not have to wait for a formal medical diagnosis of dementia
- Can protect their loved one from exploitation, financial and otherwise
- Already knows the plan when it comes time to implement it, because they were involved with it from the beginning
Our planning process is designed to not only look after the interests of your loved one but also give you the peace of mind that comes with knowing that your family member’s wishes are reflected in the estate plan that is being carried out.
Estate Planning Isn’t Just About the Documents
Estate planning is more than filling out and signing a stack of forms. Many law firms treat it as a single event that is over as soon as the ink on the paperwork dries. At Family Estate Planning Law Group, we view estate planning as a lifelong process because we understand how much is at stake and how deeply it affects the people you love.
That’s where our Generations program comes in. At Family Estate Planning Law Group, our work is guided by a few core goals:
- Building lifelong relationships, not one-time transactions
- Ensuring that your plan stays up to date
- Aligning your assets so your plan works just as you intended
- Collaborating with your financial and tax professionals
- Acting as your family’s legal team and connecting you with trusted professionals through LawyerConnect
- Supporting your family with the legal support they need when it matters most
If you’re concerned about a loved one’s ability to make legal or financial decisions, don’t wait for a medical diagnosis that may never come. We’ve seen firsthand how quickly poor judgment can lead to serious financial consequences, from large gifts to the wrong people to impulsive transactions that put their estate at risk. Acting early can help prevent exploitation and protect what they’ve worked so hard to build.
And if you’re looking to plan ahead, our estate plans are built with that in mind. When you’re feeling your best, you can make thoughtful decisions that give your family, and other people you trust and know you best, the legal tools and guidance they need to carry out your wishes if you’re ever unable to do so yourself.
Connect today with Family Estate Planning Law Group for a consultation to learn more about your options. We’re here to help you protect what matters most.
