How to Declare Someone Incompetent for Financial Purposes

Ideally, your loved ones will have their full mental faculties all the way through their later years. However, when someone begins behaving erratically or making bad decisions, it may become necessary to step in. Declaring someone incompetent is a legal process that starts with filing a petition with the courts.

Typically, legally incompetent adults are at a point where their cognitive issues are putting them and their loved ones at risk. This could be the elderly spouse with dementia who keeps withdrawing money and losing it. It could also be a parent who makes sudden, highly unusual changes to a will. When all other attempts to remedy the situation fail, loved ones might pursue legal action.

The request to have someone declared legally incompetent starts with a petition filed with your local court. If your petition goes through, you will become the person's legal guardian, putting you in charge of legal and major financial decisions. But before the petition is approved, the court will look at a variety of legally incompetent criteria, including the results of a psychological evaluation.

The petition will vary from one state to the next but, generally speaking, you'll be asked questions about the person's incompetence. You may be required to provide information about any diagnosis and treatment relating to the person, including listing all related prescribed medications. You'll also need to describe, in detail, what you've observed that makes you believe the person qualifies as legally incompetent.

The process of declaring someone incompetent also includes ensuring the petitioner is fit to serve as the person's guardian. Part of the petition you file will include an application to become the court-appointed guardian for the person being declared incompetent. The probate court will decide if the person is mentally incompetent and you're fit to serve as guardian.

There are multiple types of guardians for legally incompetent adults:

• Person and/or estate – Guardianship of the person relates specifically to ensuring the person is safe. Guardianship of the estate covers protecting and managing the person's assets.
• Limited ­– Legally incompetent adults are not always ruled incompetent in every area of life. In a limited guardianship, you'll be given power to make decisions in very specific areas.
• Emergency – You can be appointed as guardian for a 72-hour period if there's a situation where immediate action must be taken to protect the person.

Declaring someone incompetent is a big step. Someone is having rights stripped away. The person in question, known as the ward, has the right to be present at all determination hearings and bring someone else along. The ward may also choose to enlist representation from an attorney.

If the ward potentially meets the general legally incompetent criteria, that person has the right to provide a better alternative. It's important to arrive prepared with evidence to document that this alternative will work. If the ward can't afford an attorney, an attorney and independent expert can be requested, with the local government bearing the expense.

Legal incompetence can be confused with legal incapacitation. With incompetence, a person is declared legally unable to handle certain affairs by the courts. Incapacitation is usually connected to a person's physical health, involving appointing a guardian to ensure that a person's property and daily needs are met.

Legally, incompetence carries a greater weight than legal incapacitation. If you're declared mentally incapacitated in either case, though, any contracts you signed could be ruled invalid – a process that can be reversed if your mental faculties return. You also must be considered legally competent for any will you've drawn to be valid, but if the will was drawn before your incapacitation, your status may not be considered.