Estate Planning Issues Caused by Diminished Capacity
Aging, Diminished Capacity and Estate Planning
The law assumes that adult individuals have mental capacity, that is, they are capable of making rational decisions on their own behalf. Note we say they are “capable” of making rational decisions. The law doesn’t expect or require that they actually make rational decisions. Competent individuals of all ages, old and young, have the right to make foolish, eccentric or idiosyncratic decisions. For better or worse, all of us are free to make bad decisions.
A person’s capacity may change from day to day (or even during the day), depending on the course of the illness, fatigue and the effects of medication. Some folks have good days and bad days. Some are more alert in the morning; some have their best time in the afternoon. Legal competency is not something that a person either has or doesn't have – it can be quite variable.
Whether or not a person is legally competent depends on the purpose for which the capacity is being determined. The law provides a different standard of competency for:
Whether or not a person is competent is a legal determination, not a medical one. Medical testimony is important and is always sought by a court in making the determination of capacity. Since the law has many different defined standards depending on the action being taken, the determination of whether or not a person is competent to do a certain thing is always a legal decision.
What surprises most people is that the capacity to make a will, called testamentary capacity, is the lowest level of capacity in the law. All that is required is that the person making the will must,
- understand in a general way, the nature of his property
- know who are the “natural objects of his bounty,” that is, the persons who would normally be his heirs
- comprehend that he or she is making a will
A person who has had a stroke, or is diagnosed with Alzheimer’s disease, may still have sufficient capacity to make a will even though there is some impairment of speech, some impairment of thought processes, and/or some physical impairment. The fact that a client does not know the year or the name of the President does not necessarily mean that she can not make a will. Since signing a will does not require a great deal of capacity, the fact that the next day the person does not remember the signing a will does not make the will invalid if he had the minimum required capacity the day before when he signed it.
A related ground for invalidating a will is a claim that the will was signed by a testator acting under undue influence. Undue influence is the use of coercion to force a testator to make a will. The legal definition requires that the testator’s desires be replaced with the desires of another by pressure or threat. The testator is not incompetent, but the testator is left in the position of feeling "I don't want to do this, but I must." Holding a gun to the testator’s head is a clear undue influence. Telling Grandpa that you'd love to have him stay in your house and not go to a nursing home but only if he leaves you a certain something (like everything) in his will could be coercion.
Influencing a person to disinherit one person in favor of the person exerting influence is a classic case. A person can have testamentary capacity but be subject to undue influence. Many people in their terminal illnesses are unduly influenced to make wills in favor of their caregiver. More than once a client has been brought to my office by a child requesting that a new will be made disinheriting other children. Is that the parents wish? Or the wish of the child who brought them to the lawyer.
Wills and Fraud
A competent testator can be defrauded. This can look like a capacity problem, but in fact is not. For instance, Son tells Grandpa (who is in the retirement home) that the nice lady who used to live next door to him has died, inducing Grandpa to give the share he was going to give to the nice lady to Son instead. Fraud can come in the commission as well. A child could put a document in front of Grandpa and tell Grandpa that it is the will he asked to have prepared for him which leaves his entire estate to charity. In fact, it is really a will containing quite different provisions, giving his property to the child. Of course, the child doesn’t tell him that. Grandpa can't read so well anymore and trusts his child, so he signs the will. Remember, no one has a right to inherit. Grandpa is entirely free to leave all his wealth to charity, or even to a stranger, so long as he has the testamentary capacity and is not under undue influence.
Wills made as a result of fraud are invalid, but the fraud must be proven. The elements to be proven are means, motive, opportunity, and result. Someone must be proven to be in a position to be able to deceive the testator, have the opportunity to deceive the testator, the testator must have been deceived, and the deceiver or his benefactor must benefit from the will that was made, or not made, as a result of the deception.
Witness Credibility is Key
The determination of whether a client has testamentary capacity must be made by the attorney and the witnesses based on information learned in interactions with the client, from family, social workers, and, possibly medical professionals. Because you need a third party to assess capacity and because you need to be certain that the formal legal requirements are followed, it can be risky to prepare and execute legal documents on your own without representation by an attorney.
It is very difficult to overturn a properly made will on the basis of incapacity. The challenger of the will is usually not present when the will is signed so the challenger can give no testimony about the testator’s capacity at the time the will was signed. Plus, the challenger must overcome the testimony of the attorney, witnesses, and notary - not easy to do. Many attorneys, when expecting a challenge, build a case by having extra witnesses and interviewing the client in the presence of the witnesses before the will is signed.