Financial Capacity
Synonyms
Definition
This refers to one’s ability to manage financial affairs. Financial capacity consists of a breadth of abilities involving conceptual, pragmatic, and judgment abilities. Like consent capacity, financial capacity is viewed as a higher-order activity of daily living. Financial capacity typically entails recognition and quantification of coins/currency, conducting monetary transactions, managing a checkbook, comprehension of a bank statement, and can also involve more advanced tasks such as making investment decisions. It is a very relevant legal issue as it is typically related to elder abuse (e.g., financial exploitation) as well as issues of guardianship and conservatorship. There is a large degree of individual variability in a person’s ability to carry out the aforementioned tasks due to several factors including (but not limited to) socioeconomic status, occupational attainment, and exposure to financial processes/tasks (cf. Marson & Hebert, 2005). As...
References and Reading
- Griffith, H., Belue, K., Sicola, A. et al. (2003). Impaired financial abilities in mild cognitive impairment: A direct assessment approach. Neurology, 60, 449–457.PubMedGoogle Scholar
- Marson, D., Sawrie, S., Snyder, S. et al. (2000). Assessing financial capacity in patients with Alzheimer’s disease: A conceptual model and prototype instrument. Archives of Neurology, 57, 877–884.PubMedGoogle Scholar
- Marson, D. C., & Hebert, K. (2005). Assessing civil competencies in older adults with dementia: Consent capacity, financial capacity, and testamentary capacity. In G. Larrabee (Ed.), Forensic neuropsychology: A scientific approach. New York: Oxford University Press.Google Scholar
- Overman, W., & Stoudemire, A. (1988). Guidelines for legal and financial counseling of Alzheimer’s disease patients and their families. American Journal of Psychiatry, 145, 1495–1500.PubMedGoogle Scholar