Use this checklist early: assess legal capacity for each document, then complete financial and health-care directives while the person can still make the required decision. Legal capacity means understanding an action, appreciating its consequences, and making a rational choice. An Alzheimer's diagnosis does not automatically remove capacity. The required level can differ by document, so capacity to sign one document does not settle capacity for every other decision.
Medical information disclaimer: This article is for general educational purposes only and does not provide medical advice, diagnosis, or treatment. Always consult a physician or other qualified health professional about symptoms, medications, tests, or treatment decisions.
Table of Contents
- Check capacity for the specific document
- Complete the essential financial documents
- Reduce financial power-of-attorney risks
- Separate medical decisions from information access
- Know what happens when authority is missing
Check capacity for the specific document
Start by identifying the exact document or decision. The Alzheimer's Association notes that a dementia diagnosis alone does not determine capacity for every legal document.
Use these questions as a practical screening checklist: Do not use this conversation to declare someone legally capable or incapable yourself. If the answers raise doubt, pause the signing process and seek legal guidance for that document and the applicable state law.
- Can the person explain what the document does in their own words?
- Do they understand who will receive authority or responsibility?
- Can they describe the likely consequences of signing?
- Do they appreciate how those consequences affect their own care, money, or property?
- Can they make and communicate a rational choice?
Complete the essential financial documents
The National Institute on Aging advises people with Alzheimer's to complete a will, durable financial power of attorney, and an appropriate living trust while capacity remains. Review each item separately: Do not assume a general power-of-attorney form covers every need. Read the document's actual terms and confirm that its durability and granted authority match the intended role.
- Will: Confirm that the person can understand and approve the document.
- Durable financial power of attorney: Name an agent to handle money and property after incapacity.
- Living trust: Consider one where it fits the person's circumstances.
- Existing power of attorney: Check whether it is durable. A non-durable financial power of attorney ends when the person becomes incapacitated.
Reduce financial power-of-attorney risks
A financial agent may receive broad authority without routine oversight. The Consumer Financial Protection Bureau recommends choosing a trusted agent, informing other people about the arrangement, and requiring transaction reports.
before the document is signed: These safeguards do not replace careful agent selection. They create visibility around an arrangement that might otherwise operate without regular review.
- Choose someone the person trusts with money and property.
- Tell at least one other trusted person who the agent is.
- Require the agent to report transactions to another named person.
- Make sure the agent understands the authority being granted.
- Keep an accessible copy of the completed document.
Separate medical decisions from information access
A durable health-care power of attorney names a proxy to make medical decisions when the person cannot communicate them. A living will serves a different purpose: it records treatment preferences near the end of life, according to the National Institute on Aging.
A complete health-care file should address three distinct needs: Place copies of completed documents with the person receiving care, the attorney, and the physicians. A caregiver who holds only a financial power of attorney should not assume it provides medical decision-making authority or access to medical information.
- Decision-making: A durable health-care power of attorney names the medical proxy.
- Treatment preferences: A living will records the person's wishes.
- Information sharing: A medical-information release lets clinicians share information with the designated relative or friend.
Know what happens when authority is missing
If the person no longer has decision-making ability and no effective power of attorney exists, a court may appoint a guardian or conservator. That person may receive authority over care, property, or both. The process requires a court proceeding and varies by state, so obtain guidance for the state involved.
Social Security and SSI payments require a separate step. The Social Security Administration explains that a financial power of attorney does not authorize someone to manage these benefits. A caregiver must apply to the Social Security Administration and be appointed as the beneficiary's representative payee before managing those payments.
