Capacity to Sign Power of Attorney

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Question: My mother has just been diagnosed with Dementia.  It is in the early stages and she is still very lucid, can she still sign a Power of Attorney?

Answer: It depends.  For starters, a Power of Attorney is the document which names a person or persons to handle your business and financial decisions. A Power of Attorney is valid when signed and permits the Agents named to step into your shoes and conduct all business and financial decision as if they were the Principal themselves. For that reason, in order to make the decision to name a person as an agent to act on your behalf the law requires that you, as the principal, possess a certain level of capacity. When a person is diagnosed with any cognitive deficit the concern of who will act for them if a time comes that they no longer can takes on significant importance. The capacity required to execute a Power of Attorney in New York is defined in the General Obligations Law as the ability to comprehend the act of executing and granting a Power of Attorney.  In other words, the person granting the Power of Attorney must understand the document they are signing as well as the provisions contained in the document.  A diagnosis of dementia does not necessarily result in an inability to execute legal documents.  Oftentimes, persons with mild symptoms still possess the capacity required to execute legal documents.  The determination of capacity should be assessed on a case by case basis, taking into account the individual’s familiarity with their family members and financial situation. Specifically, it is important that the Principal understand the powers that they are entrusting in another individual.  It is also important that the Principal exhibit a clear understanding and willingness to grant the agent or agents named in the document this power.  Assuming that you are able to establish this, a Power of Attorney document can be executed.  In the event that a determination is made that the principal lacks the requisite capacity to sign the Power of Attorney, in order for someone to have the power to act on their behalf, a Guardianship proceeding would have to be commenced in the New York Supreme Court.  While this is an alternative which must sometimes be relied upon, the preferable course of action is to have your mother execute a Power of Attorney when she can still make decisions as to who should act on her behalf.

Nancy Burner, Esq.

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Burner Law Group, P.C.

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