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In most cases, if a person living with dementia is able to understand the meaning and importance of a given legal document, he or she likely has the legal capacity (the ability to understand the consequences of his or her actions) to execute (to carry out by signing it).
A dementia diagnosis doesn't necessarily mean you're unable to make important decisions at that point in time. But as symptoms of dementia get worse over time, you may no longer be able to make decisions about things like your finances, health or welfare. This is sometimes referred to as lacking mental capacity.
Typically, as long as dementia is minor or nonexistent, a person in the beginning stages of a dementia-causing disorder will be deemed mentally competent in the eyes of the law.
The person living with dementia maintains the right to make his or her own decisions as long as he or she has legal capacity. Power of attorney does not give the agent the authority to override the principal's decision-making until the person with dementia no longer has legal capacity.
Capacity and Dementia A person is without capacity if, at the time that a decision needs to be taken, he or she is unable by reason of mental disability to make a decision on the matter in question, or unable to communicate a decision on that matter because he or she is unconscious or for any other reason.