For most people, when they contemplate planning for their future and legal needs, they immediately think of the need for a Last Will & Testament so their wishes concerning the distribution of their assets when they pass away will be honored. A Last Will & Testament is certainly an important document; however, what happens if you don’t pass away tomorrow? What happens if, instead, your mental acuity declines steadily, but you continue to handle your finances alone and don’t realize the potentially poor decisions you are making because of that decline?
As people age, experiments have shown that people’s reasoning skills and mental acuity decline steadily after peaking around age 53. More than likely, this is also around the age when you are beginning to accumulate your greatest amount of pre-retirement wealth. Although, most-assuredly, you are still able to manage your finances at that age, it is still important that you consider the fact that one day you may not be able to cognitively process the same financial decisions at the same level that you may be able to do today.
In planning for such uncertainty, it is imperative that you put into place a strong General Durable Power of Attorney. Using a General Durable Power of Attorney, you are able to appoint whomever you trust with financial decisions to act on your behalf and make those decisions for you. This document can be effective immediately, or upon your determined incompetence, whichever is preferable for you, as there are various considerations to take into account in selecting the type which is appropriate for you. In fact, it is best if you consult with an experienced estate planning and elder law attorney who can provide you with more information regarding the decisions to be made and the points to consider in making such decisions. Regardless, a General Durable Power of Attorney is an essential piece of any estate plan.
For more information regarding people’s declining mental acuity with age, click here.