A WELL-ROUNDED ESTATE PLAN ADDRESSES COGNITIVE DECLINE Estate planning is a roadmap for transferring a person's assets upon their death. It preserves their value and lays out the distribution of assets to the beneficiaries. One overlooked but essential aspect of estate planning is a strategy to manage and maintain an estate's assets if the owner loses cognitive functioning and cannot make rational or mentally sound decisions.
A recent case highlighted by Alan Feigenbaum in J.D. Supra's article "Confronting Cognitive Abilities in Well-Rounded Estate Planning" reminds us of the complexities and challenges that can arise when cognitive decline is not adequately addressed in estate planning.
The case involves an 80-year-old retired advertising executive, referred to as K.K., who suffered from severe delusions. Influenced by a fraudulent business associate, K.K.'s delusions led to misguided investments that resulted in a significant financial loss. Despite the clear signs of cognitive impairment, K.K. continued to engage in financial decisions that jeopardized his estate's financial well-being.
K.K.'s son filed a petition to appoint him guardian of his father's estate to prevent further loss. This situation underscores the need for an estate plan that includes managing the assets and protecting the estate's value, if the individual is cognitively or mentally impaired.
K.K.'s court case underscores why a well-rounded estate plan includes a strategy to protect and manage assets when an individual lacks the cognitive capacity to make decisions. Proactive strategies prevent financial loss and reduce the emotional turmoil when caring for a cognitively impaired loved one. Estate planning gives you the peace of mind that your wishes will be honored, even in mental decline.
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A WELL-ROUNDED ESTATE PLAN ADDRESSES COGNITIVE DECLINE
Reference: JD Supra, (March 2024), Confronting Cognitive Abilities in Well-Rounded Estate Planning
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