As people live longer due to the advancement of medical technology, the percentage of persons with dementia will rise. Alzheimer's disease is now being considered an epidemic. It is not uncommon for professionals in the banking, trust, estate, and asset management industry to work with clients who are aging, and physically or cognitively disabled. Families often do not understand what is happening to their loved ones, are in denial of the situation, or the families recognize the problem but do not know what to do. In addition, one begins to question the client's capacity for good judgment and/or good decision making.
Capacity refers to the individual's mental abilities to form rational decisions, specifically the individual's ability to understand, appreciate, and manipulate information and form rational decisions.
Capacity involves the use of executive functions such as:
- Anticipating consequences
- Anticipating secondary effects
- Planning to avoid problems
These executive functions become compromised early on in the disease. The person begins to lose the ability to consistently use these functions. The individual's ability to clearly understand his/her deficits becomes diminished. The person begins to lose the ability to clearly understand the consequences or risks of his or her actions.
Capacity and FAST stage 3, Allen level 5-
This stage is not classified as a stage of dementia, but is often named Mild Cognitive Impairment. The main concern with this impairment is that the individual has lost the ability to clearly understand the secondary effects of his or her actions. For example, the person may appoint someone as her POA for finances with the understanding that the POA will assist in the future as needed. However, the person may not consider how this decision may impact other family members, or the person may not consider the ability of the POA to make good financial decisions that are in the client's best interest.
Persons with this mild impairment do have the ability to learn and understand the secondary effects, but the person does not have the ability to consider these effects without assistance. In addition, the person does not generalize learning easily from one situation to another. Therefore, similar explanations must be provided for every situation (i.e. naming a health surrogate.)
At this very early stage, driving becomes a concern because of this lack of ability to clearly understand secondary effects. The person can perform the mechanics to drive the car safely and travel to new locations; however, the person no longer considers how the driving impacts other people on the road.
Capacity and FAST stage 4, Allen level 4+
This stage is comparable to the early part of Early Stage dementia. Persons performing at this stage continue to complete basic daily tasks independently and safely and the ability to communicate is intact. Therefore, this person often fools the professional (including physicians), in the brief interviews in the office.
At this stage, the executive skills are obviously compromised. The person lacks the capacity to plan ahead, prioritize, or organize efficiently. This becomes very evident in financial transactions.
Because routine daily tasks are the person's strength, he/she may continue to pay each bill that comes in the mail as part of a routine. However, if there is any change in the billing method, or if an additional bill is added, the person may ignore it. Or the person may pay bills more than once, or pay for an insurance statement that states "this is not a bill." The decline in ability to make accurate calculations will be evident in the checkbook.
This is the person who will resist any changes in investment strategies. What makes sense and feels safe to this client is what he/she always did in the past. The client will not be able to fully understand a need for change.
In addition, the person will have problems with reading comprehension due to the decline in short-term memory. Because of these deficits, the client will have difficulty reading and fully understanding contracts. He/she will miss part of the information and this will lead to an inability to understand the entire document.
Persons performing at this stage require supervision or assistance for all higher level daily activities that require the executive skills. This person no longer has the capacity to clearly understand the consequences of his/her decisions in these areas.
Capacity and FAST stage 5, Allen level 4-
This stage is comparable to the end of the Early Stage of dementia. The person is able to complete basic daily tasks independently, but needs assistance for quality. The person requires 24-hour supervision to insure safety and adequate completion of basic tasks.
The client presents with poor short-term memory leading to poor judgment and poor problem-solving abilities. The client will have difficulty managing simple money transactions, and will be dependent on others to manage finances.
Reading comprehension is poor. The person will have difficulty remembering what is in one paragraph compared to the next; therefore, the client will not be able to understand a new contract or document.
The person may be able to engage in conversation about topics that are stored in the long-term memory (including facts related to a profession as a lawyer, engineer, or care manager). When this occurs, an evaluator may conclude that the person's cognition fluctuates and the person may have increased capacity at times. This conclusion may be dangerous for the client. Long-term memory is a strength and the person will demonstrate this when he/she is asked to tap into that memory in conversation about past knowledge. However, when presented with a new problem or asked to learn a new task, or remember what was just said or read, the person's poor short-term memory will be evident.
In addition, the person is often unaware of memory deficits and therefore may be resistant to accepting assistance.
In daily practice, if cognitive deficits are noted, recommendations for cognitive assessment, physician intervention, and family/loved one's involvement should be made. This will insure the client's involvement in any legal transaction, with assistance as needed, to facilitate the best outcome for the client.