Can someone who is mentally incapacitated make their own financial decisions?

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Can someone who is mentally incapacitated make their own financial decisions?

My father died without updating his life insurance policy. He had my mother as the primary beneficiary and she pre-deceased him. My sister and I are the only surviving children but my sister is living in a nursing home and is mentally incapacitated. She is on Medicaid and SSI. By receiving these funds she will be disqualified for these programs and her half of the policy will be absorbed immediately by the nursing home. She is unable to understand this. The nursing home is doing all the paperwork on her behalf for their own financial gain. Can I intercede? I think she is being influenced by them so they can take her money.

Asked on January 17, 2018 under Estate Planning, Connecticut

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

I am so sorry for your loss.  Some one needs to become the guardian and conservator for your sister ASAP, regardless of the issue with the funds (which is, of course, important as well).  You will need an attorney who understands both Trust and eEstate issues and estate planning for Medicaid purposes. Generally people can disclaim an inheritance but your sister is not competant and the law in your state will govern if at this stage you can even do that.  I caution you to become her conservator since disclaiming means her portion goes to you.  Doesn't look right.  Transferring in to a Trust may not be possible at this point with medicaid lookback rules but perhaps a Special Needs Trust (for the disabled) could be fine.  Good luck.


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