Key Takeaways

  • A Power of Attorney (POA) is only valid if the person signing is mentally competent, meaning they understand the rights and powers they are granting.
  • Mental competence can be determined through medical evaluations, physician certifications, or court rulings if contested.
  • If someone is already incapacitated, it is too late to create a POA—family may need to pursue guardianship or conservatorship instead.
  • Laws provide special protections for people with mental illnesses or degenerative conditions to prevent financial or legal exploitation.
  • Choosing the right POA structure, including durable POAs, helps ensure continuity of decision-making if competence is lost.
  • People with mental health conditions may face extra barriers in using POA, and reforms suggest more accessible and supportive processes.

You must be mentally competent when you sign a Power of Attorney. In other words, you must understand that you are entitling another person to handle your legal and financial interests and what this means. If there is any doubt about your mental competence, it is in your best interest to have a medical professional certify that you are competent before you sign a Power of Attorney. Otherwise, there is a risk - greater or less, depending on your circumstances - that the Power of Attorney may be ruled invalid later on, when you most need it to be in effect. Powers of Attorney are meant to reflect your competent self exercising decisions for you while you are incompetent: if you were incompetent when you signed the document, then it is invalid.

But how exactly is mental competence determined? There are a few options for determining this that you may write into the Power of Attorney (for example, you may indicate that a specific physician must make the determination, or that two or more physicians must agree on your competency), but the professional opinion of a physician is required. An Agent cannot assume responsibility of your concerns until you are determined mentally incompetent. In some cases, it may be necessary for a court to decide the matter of mental competency, according generally accepted standards.

Legal Standards for Mental Competence

Mental competence is not only a medical question but also a legal one. Courts often apply a functional test: whether the person understands the nature and effect of the document they are signing. For a power of attorney, this means recognizing what powers are being transferred and the possible consequences. Individuals with cognitive impairments, mental illness, or degenerative diseases may still be found competent if they can demonstrate understanding in the moment. However, if there is significant doubt, judges rely on expert medical testimony to determine validity.

What Happens if Competence is Lacking?

If someone is already incapacitated and cannot meet legal standards of competence, they cannot sign a valid power of attorney. In such cases, loved ones may need to petition the court for guardianship or conservatorship, which gives legal authority to manage financial or medical decisions. This process is often more time-consuming and costly than preparing a POA in advance. It also places decision-making under ongoing court supervision, which many families try to avoid.

Protections Against Exploitation

Because individuals with diminished capacity are vulnerable to abuse, the law provides safeguards. Contracts or powers of attorney signed when someone lacks competence can be declared void or voidable. This protects people with conditions such as Alzheimer’s disease, dementia, or severe mental illness from exploitation. Physicians and attorneys often recommend documenting competence at the time of signing, such as through a doctor’s statement or video recording, to prevent challenges later.

Durable Powers of Attorney and Mental Competence

A durable power of attorney remains valid even after the person who granted it becomes incompetent. This durability is what makes the POA a powerful estate planning tool. Without it, the authority would automatically end once competence is lost. However, the individual must still be competent at the time of signing. Including clear language about durability and specifying conditions under which the POA takes effect (such as upon certification of incompetence by one or two physicians) ensures smoother transitions of authority.

Mental Health and Power of Attorney Accessibility

Research shows that people with mental health challenges face unique barriers in using POA effectively. They may hesitate to create one due to stigma, fear of losing autonomy, or lack of affordable legal support. Recommendations for improvement include:

  • Simplifying legal forms and instructions.
  • Allowing more flexible triggers for activation of POA, such as temporary mental health crises.
  • Providing access to independent advocacy so individuals feel supported in making these choices.

These reforms aim to make powers of attorney more inclusive for people with fluctuating or long-term mental health conditions.

Frequently Asked Questions

  1. Can someone with dementia sign a power of attorney?
    Yes, but only if they are still able to understand what they are signing at that moment. A doctor’s evaluation can help confirm competence.
  2. What if a person is already incapacitated?
    They cannot sign a valid POA. Family members may need to seek guardianship or conservatorship through the court.
  3. What is the difference between competence and capacity?
    Competence is a legal determination, while capacity is a medical or functional assessment of a person’s ability to understand decisions.
  4. Does a durable power of attorney require ongoing competence?
    No. The person must be competent at signing, but once valid, a durable POA continues even if competence is lost.
  5. How can families prevent disputes over mental competence?
    They can obtain medical certification, document the signing process, and clearly outline triggers for activation in the POA.

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