Personal economic stability is one of the core social determinants of health and longevity, and managing one’s finances is an instrumental activity of daily living. Impaired financial decision-making can lead to poor health, emotional distress, and loss of independence and safety. Currently, there is no gold standard assessment tool for evaluating financial capacity.

The following is a semi-structured approach to complex financial capacity evaluations, including testamentary capacity assessments, integrating the biopsychosocial and medicolegal assessment models. Developed by Dr. Aaron J. Greene, M.D. and published in The American Journal of Geriatric Psychiatry.

For use with adults who may be vulnerable to financial exploitation (FE) due to cognitive impairment, dependency, mental illness/distress, physical illness/frailty, traumatic brain injury (TBI), or other circumstance bringing FC into question. Medical and financial record review and third-party verification of information may be required. Considerations should be made regarding modifiable causes such as the effects of a medication or other substance use, and the potential to restore the capacity in question.

Given sufficient provision of information from an appropriate source, a person may be deemed to have financial decision-making capacity when they exhibit:

1. Ability to express a voluntary choice

• involves evaluating for undue influence which may be impacted by physical illness/frailty or mental illness/distress

2. Understanding of the intrinsic financial instruments/mechanisms related to the expressed choice

3. Appreciation of the potential outcomes of the expressed choice, as it relates to one’s own situation

• consideration for taxation or triggering contractual mechanisms
• project effects on ability to afford lifestyle and healthcare expenditures
• awareness of assets
• awareness of potential heirs

4. Ability to communicate the reasoning behind the expressed choice, including social and emotional components

• particularly if seemingly misaligned with one’s core values and personality traits
• involves evaluating for perceived potential benefits and decision-making based on delusion
• involves evaluating social, emotional and metacognitive drivers of behavior (e.g. feelings of depression, loneliness, guilt or obligation, attitude towards saving and charitable giving, trust in strangers, compulsive or addictive behaviors)

5. Requisite functional capacities (based on real-world contextual factors which may be impacted by physical illness/frailty or mental illness/distress)

Examples pertinent to EFI:

• maintain a capacity over time
• navigate a banking website or mobile app
• exhibit understanding of an electronic banking statement
• maintain relative privacy of personal electronic devices
• identify a fraudulent website, phishing email, or fake online dating profile