What Is a Competency Evaluation for Personal Finances?


Even when a person is of sound mind, finances can be difficult to track and manage. When dealing with money seems to cause more problems for a person than it does for most people, however, this may be a sign the person is not financially competent. A formal competency evaluation can verify whether someone is able to deal with his finances, and, if not, he can get further formal help if necessary.


A competency evaluation for personal finance is a test or series of tests that determines the ability of a person to understand, regulate or complete monetary transactions. The test or tests may cover areas such as checkbook balancing, knowledge of personal assets, cash transactions and estate arrangements.

The failure of a competency evaluation for personal finance does not necessarily mean a person is incompetent in other areas. For example, a person may be financially incompetent even if he can perform other tasks such as preparing meals or caring for someone else. A competency test for personal finance examines only one area and is not a measure of total competence of the person tested.


The purpose of a competency evaluation for personal finance is to discover whether a person can handle his assets and financial decisions on his own. The underlying goal of the test is to protect the assets a person has or would gain in the future, thereby indirectly protecting the person's ability to meet basic needs and live with comfort and dignity. You may use the results of a formal competency evaluation for personal finance to make a case in court that the person tested needs you or someone else to act with financial power of attorney.

Who Receives Evaluation

Most often, people request a competency evaluation for an elderly individual, as mental acuity tends to wane with age. However, anyone who is suspected of having financial trouble may receive a financial competency evaluation, regardless of age. Having a disability is not by itself a reason to give a financial competency evaluation, although some disabilities do impact mental acuity.

Who Gives Evaluation

Because a competency evaluation in any area deals with mental functioning, only a person who has received formal training in the area of psychology should administer a competency evaluation for personal finance. If you wish to request such a competency test, contact the court or your local police department to get a recommendation for a licensed psychologist who can administer the test for you. These psychologists often have more extensive experience in participating in court proceedings via expert testimony, although other psychologists still may administer the competency evaluation properly and provide sufficient support.

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