Financial Planning Focus – Preparing for Diminished Financial Capacity
As defined by the Consumer Financial Protection Bureau, “diminished financial capacity” is a legal term used to describe the decline in a person’s ability to manage money and financial assets to serve their best interests, including the inability to understand the consequences of investment decisions. Financial capacity is one of the first abilities to decline with cognitive impairment. It incorporates core skills such as conducting cash transactions, understanding debt and loans, paying bills and maintaining sound judgement to avoid financial exploitation. Although diminished financial
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