Capacity's Importance in Estate Planning

Understanding Mental Capacity Requirements

Proper execution of a legal instrument requires that the person signing have sufficient mental "capacity" to understand the implications of the document.  While most people speak of legal "capacity" or "competence" as a rigid black line — either the person has it or doesn't — in fact it can be quite variable depending on the person's abilities and the function for which capacity is required.

One side of the capacity equation involves the client's abilities, which may change from day to day (or even during the day), depending on the course of the illness, fatigue and the effects of medication.  On the other side, greater understanding is required for some legal activities than for others.  For instance, the capacity required for entering into a contract is higher than that required to execute a will.

The standard of capacity with respect to durable powers of attorney can be quite low.  The client need only know that he trusts the agent to manage his financial affairs.

As a practical matter, in assessing a client's capacity to execute a legal document, attorneys generally ask the question, "Is anyone going to challenge this transaction?"  If a client of questionable capacity executes a will giving her estate to her husband, and then to her children if her husband does not survive her, it's unlikely to be challenged.  If, on the other hand, she executes a will giving her estate entirely to one daughter with nothing passing to her other children, the attorney must be more certain of being able to prove the client's capacity.

While the standards may seem clear, applying them to particular clients may be difficult.  The fact that a client does not know the year or the name of the President may mean she does not have capacity to enter into a contract, but not necessarily that she can't execute a will or durable power of attorney.  The determination mixes medical, psychological and legal judgments.  It must be made by the attorney (or a judge, in the case of guardianship determinations) based on information gleaned by the attorney in interactions with the client, from other sources such as family members and social workers, and, if necessary, from medical personnel.  Doctors and psychiatrists cannot themselves make a determination as to whether an individual has capacity to undertake a legal commitment.  But they can provide a professional evaluation of the person that will help an attorney make this decision.

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.

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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Copyright © 2009 by Levandowski & Darpino, LLC. All rights reserved. You may reproduce materials available at this time for your own personal use and for non-commercial distribution. All copies must include this copyright statement.