In this guest post by Jeff Garrett, Legal Practice Director at Attwood Marshall Lawyers, he explains why a dementia diagnosis does not automatically mean someone lacks legal capacity. Ahead of Dementia Awareness Week, he highlights the importance of assessing capacity for individual decisions, planning ahead, choosing trusted attorneys and reviewing estate documents.
Dementia is becoming an increasingly common part of life for Australian families. According to Dementia Australia, more than 446,500 Australians are currently living with dementia, and this number is expected to grow as our population ages.
There’s still a misunderstanding about what a dementia diagnosis means for a person and whether they can make their own decisions.
One of the biggest misconceptions is a dementia diagnosis automatically means a person no longer has the legal capacity to make important decisions.
A person with dementia may still be able to make decisions about their finances, property, Will and personal affairs, especially in the early stages. The key factor is whether they understand the decision at the time.
Different decisions require different levels of understanding. A person may have the capacity to make one decision but not another. For example, the level of understanding required to make a Will differs from that required for other legal decisions. Similarly, appointing someone under an Enduring Power of Attorney is significant because it can give another person authority to make financial or personal decisions on their behalf.
Some forms of dementia can cause periods when a person is more alert and able to understand, followed by periods of confusion and difficulty processing information.
“This is why a diagnosis alone should not be used as a shortcut for determining whether someone can make a legal decision.”
Capacity is often an important consideration when preparing or updating estate planning documents. To make a valid Will, a person generally needs to understand that they are making a Will, have a reasonable understanding of what they own, understand the people who might expect to benefit from their estate, and be able to make rational decisions about how their assets should be distributed.
Establishing this capacity becomes more difficult as cognitive decline progresses. Dementia affects people differently depending on its type, including Alzheimer’s disease, vascular dementia, Lewy body dementia and frontotemporal dementia.
This can make determining capacity complex, particularly when family members disagree about whether a legal document reflects the person’s genuine wishes. In some cases, disputes only emerge after someone has died, when it is too late to ask them what they intended.
This is why estate planning is a priority while you are healthy, so you can make important decisions yourself rather than potentially leaving them to your family or a court or tribunal.
By planning ahead, you can decide who you trust to make decisions on your behalf. An attorney under an Enduring Power of Attorney may have significant control over financial and personal matters, so trust and suitability should be the priority rather than simply choosing the closest relative.
This is particularly important as concerns around financial elder abuse continue to grow. Family relationships can become strained when money, property and decision-making responsibilities are involved.
Dementia Awareness Week runs from 21 to 27 September and provides an opportunity to have conversations that families often put off.
If a family member is showing signs of cognitive decline, seek professional advice sooner rather than later. This may include speaking with their GP or specialist, reviewing existing estate planning documents and obtaining a formal capacity assessment where appropriate.
Most importantly, families should avoid assuming a person has lost their legal capacity simply because they have been diagnosed with dementia. Capacity can be complex and, in some circumstances, change over time. The earlier people put their wishes in place, the greater the chance those wishes can be respected.
