A son brought his dad in to be tested for dementia. And he told the neuropsychologist, “The primary care provider said because my dad has dementia, he can’t sign power of attorney paperwork. Now I don’t know what to do.”
When I heard that, I thought, this is not accurate at all. This is really bad information. So I asked my friend Jane Allison Austin, an elder law attorney in California, to come on and clear up the confusion about power of attorney and dementia.
A quick note before we start: this is for education only, not legal advice. Laws are different from state to state, and Jane Allison is licensed in California, so she speaks to California law and defers to her colleagues everywhere else.
Can Someone With Dementia Sign a Power of Attorney?
A diagnosis of any type of dementia does not automatically mean someone can’t appoint a power of attorney.
Jane Allison knows this from her own family. She had two parents with Alzheimer’s and dementia. From the time they first recognized her father’s symptoms to the time he passed away was ten years. In the early years he was confused at times, but not all the time. In the last couple of years, there would have been no way he had the capacity to understand.
So the question isn’t whether there’s a diagnosis. It’s when the person is signing, and whether they understand what they’re doing in that moment. It doesn’t even matter if an hour later they don’t remember what they signed.
Jane Allison also pointed out something that surprises a lot of families. In both places she has practiced, if someone later goes to court and says Dad didn’t have capacity when he signed, the person bringing that claim has to prove it. The law starts by presuming that everyone who signed had capacity. That’s called a rebuttable presumption.
But at some point, everyone with dementia will no longer be able to sign. That’s why I push families to get this paperwork done early. I walk through the other first steps in where to get help after a dementia diagnosis.
Can a Doctor Say Someone Can’t Sign a Power of Attorney?
Jane Allison’s short answer: a physician does not have the authority to determine legal capacity for signing documents.
A doctor can always give a medical or clinical opinion. But in California, she says, only a judge can determine legal capacity. That usually comes up in a conservatorship petition, which other states call a guardianship. A spouse or a child goes to court and says, my mother or my father doesn’t have capacity right now, and we need to be in charge of their finances or their health care decisions.
The judge isn’t a medical doctor, so the doctor’s opinion does come into it. When Jane Allison files a conservatorship petition, she has to include a doctor’s assessment. It’s a form with many questions on it, not just “they have dementia.” The judge might read it and decide this seems mild and there’s no legal incapacity, or decide the answers do show incapacity. Loved ones may testify too.
That’s very different from a power of attorney. When you name someone as your power of attorney, you still keep your own power. In a conservatorship, the judge takes it away, and only the conservator can make those decisions.
The first thing a court will ask is whether there are documents in place: a trust, a power of attorney, a health care directive. Judges want to defer to those, because they don’t want to take away anyone’s rights. But a power of attorney isn’t always enough. It’s a document someone signed in front of a notary, not something a court approved. If banks or doctors won’t honor it, a family may still have to go to court to get an order.
Jay Leno, for example, had to go to court here in California for a conservatorship for his wife, and it’s all public. That’s why Jane Allison wants families to do the documents ahead of time.
In the case I started with, she wouldn’t want that son to assume his dad can’t sign. That doctor went straight to the legal result, which isn’t the doctor’s decision to make.
How Lawyers and Notaries Look at Capacity
There’s no law that spells out how an attorney or a notary decides whether someone has capacity. There are no clear legal standards for it right now. It really is a judgment in the moment.
What an attorney looks for. Jane Allison wants to see that her client understands the general boundaries of their property: they own a home, they have financial accounts. They don’t need to know every bank or every account number. For a power of attorney, they need to understand they’re giving their powers to another person, either right away or if they lose capacity later. They don’t have to understand every word of the document. Even people with full capacity don’t understand all the legal language.
She also has a professional duty not to get in the way of what a client wants to do. If she became very judgmental and decided a client couldn’t, she could be doing that client a disservice.
What a notary looks for. A notary is mostly confirming that the person signing is the person on the ID. They aren’t making a legal determination of capacity. They’re deciding whether they’re comfortable notarizing the signature of the person in front of them, and whether that person seems to understand in the moment. Someone in the last stage of dementia, like her dad in his last couple of years, wouldn’t get a notary to sign off.
Undue influence. The other thing they watch for is whether someone is pushing the person into signing. When a family calls and says, our parent has a little bit of dementia, can we come in together, Jane Allison says yes, please come in together. But she also meets with the client on their own, so she knows they aren’t just doing what the kids want. If someone is standing there saying sign, sign, sign, that’s a red flag.
Do You Need a Lawyer for a Power of Attorney?
No. A lot of people don’t realize that a lawyer doesn’t have to be involved at all.
Almost every state has a statutory power of attorney for finances on its Secretary of State’s website, and often an advance medical directive too. Jane Allison suggests searching your state’s name plus “statutory power of attorney.” To make it legally valid, you don’t need an attorney. You need a notary, or whatever your state requires. That’s how I did it for my dad. It was just a notary.
And if your loved one can’t sign their name anymore, that doesn’t have to stop them. Jane Allison says they can sign with an X, and some states allow witnesses who know the person. Notaries always have a way around it, because the law doesn’t want to keep people from making legal decisions just because they can’t get the handwriting done.
The catch is that these forms aren’t as robust as what an attorney drafts. They also make undue influence easier: one sibling could take Dad to a UPS store, have him sign a new power of attorney naming them instead, and the notary would only check that he can sign. A statutory form is certainly better than nothing. But if Medicaid may be needed down the road, it may not give the person you name the powers they’ll need. More on that below.
Healthcare and Financial: The Two Types of Power of Attorney
There are two kinds that matter here. A power of attorney for health care, which may be called an advance medical directive depending on your state. And a durable power of attorney for finances, which is the term almost every state uses.
You can name the same person for both. Couples often name each other for both. But you don’t have to. Jane Allison gave the example of a parent with two kids, one great with money and one great with medical decisions, who gives each of them the job that fits.
You can also add a HIPAA form. Say you name one child as your health care power of attorney, but you want all your children to be able to talk to the doctors. You can put all their names on the HIPAA form.
One thing that isn’t what we’re talking about here: a limited power of attorney, like the one a title company might ask you to sign so your spouse can close the sale of your house while you’re traveling. That covers one transaction only.
Can the Power of Attorney Take Over Right Away?
Not necessarily. Being named power of attorney doesn’t give you the right to take over everything right away. It depends on what the document says.
A power of attorney can be effective immediately. Then the person you named can act for you, and you can still act for yourself too. Or it can be springing, which means it only takes effect if you become incapacitated down the road. And the document itself defines what incapacity means. It might say two doctors, one doctor, or a spouse decides.
So if you’ve just been handed Mom or Dad’s power of attorney and you’ve never read it, here’s the order to check things in:
- Read it and see whether it’s effective immediately or effective upon incapacity.
- If it’s upon incapacity, find the definition in the document and meet it. If it says two doctors, you need letters from two doctors.
- Until then, it can’t be used. You can’t call the doctor’s office and demand their health information because you’re the power of attorney.
The place you’re using it is the gatekeeper. Any doctor’s office or financial institution that’s doing its job will ask to see the document first.
When the Bank or the Doctor Won’t Honor a Power of Attorney
This isn’t really a misconception, Jane Allison says. It’s an expectation that may not be met. You can have a perfectly valid power of attorney and still not have it honored.
In one week, two of her clients called to say their powers of attorney weren’t being honored at the bank, and a medical directive wasn’t honored at a doctor’s office. Another client had an advance health care directive, and the doctor’s office said they could only talk to the power of attorney, meaning the financial one. They didn’t know the difference.
Some banks are now refusing a power of attorney that’s more than two or three years old. A 20-year-old power of attorney can still be legally valid in a court of law, but a bank can have its own policy. For someone with dementia, that makes no sense, because at some point they won’t be able to sign a new one.
Jane Allison’s advice:
- Don’t take no from the teller or the manager. Ask them to send it to the legal department. You may still get the wrong answer, but at least someone who knows the law looks at it. You have every right to insist.
- Ask each bank whether it has its own power of attorney form. That form has already been approved by their legal department, so it’s hard for them to turn it down later. Sign one for each bank, alongside a full power of attorney. You can sometimes find it by searching the bank’s name plus “power of attorney.”
Some states are starting to pass laws that make banks liable for refusing, but then you have to go to court to enforce them.
I had a better experience. When I was getting my dad’s financial power of attorney, I asked Wells Fargo up front what they required, so I wouldn’t waste time and money. They didn’t have their own form and told me to bring in what I had. Fortunately our state’s form was pretty decent. When I brought it in, they said right away that their legal department needed to look at it. I waited in the lobby about 30 minutes, they approved it, and I signed a lot of paperwork saying I wasn’t stealing money. But going in, it felt like a gamble, because every institution has its own idea of what’s acceptable.
What an Elder Law Attorney Can Add to a Power of Attorney
Jane Allison says the biggest one is Medicaid planning.
Medicaid, which has a different name in some states, is a federal and state program that pays for long-term care. That includes skilled nursing, and also help that comes into the home. To qualify, you have to be under the state’s asset limit, and in many states that’s still $2,000.
Say you have $300,000 in countable assets. Every state has laws that let an elder law attorney lawfully help you organize those assets so you could qualify sooner without losing all of them. You can do that yourself as long as you have capacity. But if you’re in the early stages of dementia and may need long-term care in three or four years, the person you named needs that power written into the document to do the planning for you.
A typical statutory form won’t give it. It might say your agent can apply for government benefits, or that they can make gifts. But gifting can be dangerous with Medicaid’s look-back period, so the document needs specifics about how and why they can gift.
When we recorded this, California had just eliminated its asset limit. California brought an asset limit back on January 1, 2026, at $130,000 for one person, so this matters there too.
The second thing Jane Allison now adds for some clients is a line about arbitration. Many facility contracts include a mandatory arbitration clause, and most people sign them without thinking about it. It means if something goes wrong with your loved one’s care, you can’t sue in court. You can only file an arbitration claim, and if you lose, you might have to pay the facility’s legal fees. So some elder law attorneys write into the power of attorney that the agent cannot sign an arbitration agreement. If they sign one without knowing, the family can argue the agent never had the power to agree to it.
For nursing homes that take Medicare or Medicaid, federal rules say the facility can’t make signing one a condition of admission or continued care, must tell you that you can decline, and must let you cancel within 30 days.
Attorney-drafted documents are also more personal. Jane Allison can plan for a first choice, a second choice if the first isn’t available, a business, whatever the family needs. As she put it, an attorney’s job is to look at every possible scenario and use precise language, so families stay out of court and out of conflict.
Does Everyone Need a Power of Attorney?
For once, Jane Allison didn’t say “it depends.” The answer is yes, every adult. Her firm even does them for college-age children.
Without one, if you’re in the hospital and need the $3,000 in your bank account to pay two months of rent, no one can get to it. Not your best friend. Not even your spouse, unless they’re on the account. A power of attorney only works while the person is alive, so it’s there for exactly these moments.
So if you’re watching out for someone with dementia and haven’t done your own paperwork yet, this is your reminder.
For my mom, I was not her power of attorney. But I was the one at the hospital talking to the doctors, and I was the one who made the decision to take my mom off life support. That hospital has no record of me being her power of attorney. Nobody refused me any information or anything she needed. I know I was lucky. My dad couldn’t have done it, and it could have been a real nightmare if our family hadn’t been on the same page.
Jane Allison’s view is that the hospital would much rather be able to say the daughter made the decision than the doctor. But if family members disagree, say a spouse and a child, or siblings, that’s where you really need the documents. If one person has the power, that’s who the hospital will rely on.
And even with paperwork, a crisis doesn’t always go to plan. My mother didn’t want any of those measures. But by the time the ambulance took her, they had started all of them. The best you can do is put as much in place as you can, so things go as smoothly as possible and your loved one’s wishes have the best chance of being followed.
Jane Allison’s practical advice: if you know you’ll be the one taking over Mom or Dad’s finances someday, talk with them now, while they’re in the early stages. What does the document say? What will I need to do? Where are your accounts? Her mom was very organized, and Jane Allison still found accounts later she never knew about. Nobody’s fault. Just communication. It’s a real job, and it’s easier when you’ve talked first.
A Note on State Laws
An attorney has to be licensed in a state to give advice on that state’s laws. Federal law covers all 50 states, but where it doesn’t step in, each state makes its own. That’s why what’s true in California may not be true where you live. For another state’s view, I talked with Michigan elder law attorney Bob Mannor in how to advocate for your loved one with dementia.
If you’re in California, you can reach Jane Allison on Instagram at @janeallisonaustin or by email at [email protected]. If you’re in another state, she’s in touch with elder law colleagues across the country and is glad to point you to someone in yours.
So much of the confusion comes from people in health care and banking who are supposed to know these documents and don’t always. Knowing the basics means you know your rights, and you know when to ask for it to go to legal.
Paperwork is one piece of a much bigger load. Inside the Care Collective, we talk through the decisions that come with caring for someone with dementia every week, from the practical ones like these to how you’re holding up while you make them. You can learn more here.
Sources & References
42 CFR 483.70, binding arbitration agreements in long-term care facilities
