Essential Actions When Dementia Hits a Loved One: Powers of Attorney, Contracts, and More
Strategies for coping with dementia: an exploration
Germany has over 1.8 million residents dealing with dementia, a condition that impacts not just the individuals themselves, but their families too. It is crucial for family members to educate themselves and act promptly in relation to potential legal issues that may arise.
In the latest issue of the magazine "Stiftung Warentest Finanzen" (06/2025), the experts underline the importance of taking legal precautions early. This is why they recommend the following steps:
Act Fast and Establish Powers of Attorney
Memory loss or disorientation might be the early signs of dementia. Family members should acknowledge these warning signs and take immediate action in order to secure powers of attorney. It empowers a trusted individual to handle legal matters whenever the dementia patient is no longer capable of doing so.
Understanding Contractual Commitments: What's Allowed?
While a dementia patient remains legally competent - that is, they fully comprehend what they are signing - their agreements are considered valid. However, complications arise when legal competence is lost, which could potentially invalidate previously concluded contracts. Family members or legal guardians can then revoke such contracts and even reclaim any payment made.
Small, routine transactions, such as buying groceries or a newspaper, are considered "ordinary purchases," and are allowed even when legal competence is limited.
Recognizing and Terminating Unwanted Contracts
Unfortunately, dementia patients might inadvertently enter into costly subscriptions or contracts via phone or online. Family members can intervene in these situations, particularly within the first 14 days, when there is often a right of withdrawal, especially for door-to-door sales and online orders. If the deadline has passed, the fact that the dementia patient was mentally incapable can help question the legality of the contract. A doctor's certificate can further support the case.
It is vital to routinely review bank statements and mail, refraining from sharing account details to avoid unauthorized transactions. If unauthorized debits occur, immediate action should be taken to cancel the payment.
Sources: ntv.de, awi/dpa
- Dementia
- Powers of Attorney
- Contracts
- Legal Questions
- Financial Planning
- Dementia Support
Insights:
- Power of Attorney (POA): A POA is a legal document that grants someone else the authority to manage financial decisions on behalf of the individual once they become incapacitated. It is essential to establish a POA before the onset of significant cognitive decline.
- Mental Capacity Assessment: Before creating or updating a POA, the mental capacity of the individual being represented must be assessed by a medical professional.
- Contract Review: Reviewing existing contracts can help understand their terms and implications for the individual's financial situation.
- Protection Against Unwanted Contracts: Keep a close eye on the financial activities of the dementia patient to avoid exploitation and unwanted contracts. Seek legal advice if necessary.
- Conservatorship or Guardianship: In cases where the individual no longer has the capacity to manage their affairs, family members may need to apply for conservatorship or guardianship through the court.
- Consult with Legal Experts: Working with an elder law attorney can provide valuable guidance on powers of attorney, contracts, and conservatorship procedures.
- Estate Plan Review: Regularly review estate plans, including wills and advance directives, to ensure they accurately reflect the individual's current wishes.
By adhering to these recommendations, family members can better safeguard their loved ones' interests, offering security and peace of mind during the progression of dementia.
In the context of caring for a loved one with dementia, it's crucial to pursue vocational training to equip oneself with the necessary skills for understanding legal matters, such as powers of attorney, contractual commitments, and financial planning. This knowledge can also aid in ensuring health-and-wellness and mental-health well-being as the dementia patient's condition progresses, necessitating careful monitoring for unauthorized transactions or unwanted contracts.
The recommended community policy could involve implementation of programs that offer vocational training focusing on legal and financial aspects, in addition to mental-health support for both patients and their families, serving as a preventive measure for potential legal issues caused by dementia.
