RMO LLP Founding Partner Scott Rahn was recently quoted in a Moneywise article examining the legal challenges families may face when managing financial decisions for a parent with dementia
The article examines a situation where an aging parent with dementia owns a valuable stock certificate that must be signed before it can be sold or transferred. The article explores a common scenario in which an adult child or caregiver needs access to a parent’s assets but encounters questions regarding the parent’s legal capacity to approve the transaction.
In his comments, Scott emphasized that legal capacity is transaction-specific and depends on whether the individual understands the nature and consequences of the decision being made. In the context of selling stock, this includes understanding what the stock represents, the implications of selling versus retaining it, and who will ultimately receive the proceeds.
If she doesn’t have this understanding, Rahn said that “neither a notary nor a medallion guarantee can cure a lack of capacity.”
Scott also stresses the importance of acting with the right motivation when managing the financial affairs of an incapacitated loved one.
“Don’t forget the stock and its proceeds still belong to Mom,” Rahn said. “’Unlocking’ the asset means protecting it and using it for her benefit.”
The situation highlights why advance planning, including appropriate powers of attorney and other incapacity planning measures, can be critical when families are later called upon to manage a loved one’s financial affairs.
Read the full article on Moneywise, Yahoo Finance, or AOL.
Facing a dementia incapacity or conservatorship issue? Connect with RMO LLP to discuss how we can help you protect your interests and resolve dementia-related asset management and fiduciary disputes.