Aging is a process. The fact is that most of us, especially my age cohort (the Baby Boomers), really don’t like to think about aging or incapacity or death. Many of us think that if we eat right and exercise, we’ll just be able keep at it until we’re “done” at some appointed time, like an expiration date. This post will give an overview of what is known in the law as capacity and incapacity and consider how these factor into financial abuse or exploitation of elders as it relates to this first installment – testamentary capacity (capacity required to make a will).
Lawyers who practice in the field of estate and elder law need to be prepared to make assessments regarding a potential client’s capacity. The assessment are usually not so simple, but there are many different ways that the assessment can be made. Most of my colleagues are not really happy about this, but the bottom line is our rules of professional conduct require us to get informed consent from our client, which necessitates a determination of (some level of) capacity on the part of the client. A special ethics rule (read 1.14 here) applies where lawyers are dealing with a client with diminished capacity – and it is not an easy one to negotiate!
Let’s start with the basics . . . . We have to begin with a fundamental question when we take a look at the term “capacity” and ask ourselves “capacity to do what exactly?” Sure, I’ve blogged about the importance of a lawyer determining client capacity in the context of elder law ethical issues before, but I’m focusing just on capacity in this post.
This is a fundamental question because like so many other legal questions, the answer begins with “it depends . . . !” Some of the varying standards of capacity in elder and estate law can be demonstrated among these categories of capacity:
- To make a will (testamentary capacity) – including a will with a testamentary trust
- To designate a health care agent in a medical power of attorney
- To execute a general (durable) power of attorney
- To execute an advance directive (living will)
- To execute a revocable (or irrevocable) inter vivos (living) trust
- To make a gift to another person
- To make a gift of real estate to another person (via a deed)
Why should we be concerned about capacity anyway? Isn’t there a legal presumption of capacity for any person eighteen or older? Why yes, generally speaking, a person retains capacity unless a court adjudicates a person incapacitated (typically the result of a guardianship under the Colorado Probate Code, and there are guardianships under the Veteran’s Administration as well). In fact, there is case law in Colorado which specifically states that a protected person (under either a guardianship or conservatorship or both) retains the capacity to make a will. The appointment of a conservator or guardian is not a determination of testamentary incapacity of the protected person. Section 15-14-409(4), C.R.S. 2004. In re Estate of Romero, 126 P.3d 228 at 231 (Colo.App. 2005). See also In the Matter of the Estate of Gallavan, 89 P.3d 521 at 523 (Colo. App. 2004). This court distinguished testamentary capacity from a protected person’s ability to make an inter vivos trust, which the Gallavan court held was a right vested in the protected person’s conservator. Id.
A person has testamentary capacity if he or she is an “individual eighteen or more years of age who is of sound mind.” Colo. Rev. Stat. 15-11-501. So if the testamentary capacity standard seems to be the “basement” (the lowest level) as to what level of capacity is required, what measures can be taken to ensure that a will is reflective of the wishes of the deceased testator (will maker)? First off, the attorney needs to be sensitive to capacity concerns of elder or ill clients, particularly to safeguard a later reasonably foreseeable challenge to capacity and also so as not to facilitate an at risk elder from being exploited by another person. This is seldom an easy matter and it requires sensitivity based on information gathered by the attorney about the elder client’s situation, particularly when the elder is sick, in the hospital or otherwise unable to travel to the attorney’s office (elder law attorneys do typically make “house calls” for some clients). And of course, the attorney will be considering what types of services are requested – like changing a living trust, disinheriting a child in a will or gifting real estate to a caregiver.
The evaluations of capacity employed by attorneys vary widely – as do those used by medical professionals. The legal standard for evaluating a testator’s soundness of mind may be evaluated under either the test set forth in Cunningham v. Stender, 127 Colo. 293, 255 P.2d 977 (1953), or the insane delusion test as described in Breeden v. Stone, 992 P.2d 1167 (Colo. 2000). The case law cited here is relevant in the will contest setting – after a testator has passed away and there is a challenge to the validity of the will.
So what is it that an attorney can do to make the will she has prepared as “water tight” as possible? Colorado law no longer requires witnesses to the signing of a will (just a notarized signature), but for those of us who focus in this area of law, most agree that the best practice is to have an “execution ceremony.” I often joke about this at my final meeting with estate planning clients – that my execution garb (hooded black robe, blindfold, etc.) is at the dry cleaners . . . ! Inappropriate humor aside, an execution ceremony with witnesses is helpful because it converts the will to a “self-proving” will. The questions I ask the testator in front of the two witnesses are based on the Cunningham test referred to above, to demonstrate a person has testamentary capacity when the person (1) understands the nature of the act they are performing (making a will), (2) knows the extent of his or her property, (3) understands the proposed disposition of the property in the will, and (4) knows the natural objects of his or her bounty, and (5) the will represents the person’s wishes. Making a will “self-proving” helps because once a proponent of a will has offered prima facie proof that the will was duly executed, any contestant has the burden of establishing lack of testamentary intent or capacity, undue influence, fraud, duress, mistake, or revocation by a preponderance of the evidence. In re Estate of Romero, 126 P.3d at 231. Section 15-12-407, C.R.S. 2004; Breeden, supra, 992 P.2d at 1170.
There is scant Colorado case law detailing what specific knowledge is required for a testator to be deemed to know the extent of his or her property. However, the cases which touch upon this issue, including the Cunningham decision itself, indicate that it is sufficient that a testator comprehend the “kind and character of his [or her] property” or understand, generally, the nature and extent of the property to be bequeathed. Cunningham, supra, 127 Colo. at 300, 255 P.2d at 981; see also Columbia Sav. & Loan Ass’n v. Carpenter, 33 Colo.App. 360, 368, 521 P.2d 1299, 1303 (1974), rev’d on other grounds sub nom. Judkins v. Carpenter, 189 Colo. 95, 537 P.2d 737 (1975). The amount or value of the assets tends to be merely a detail. In other words, “A perfect memory is not an element of testamentary capacity. A testator may forget the existence of part of his estate … and yet make a valid will.” 1 Page on Wills § 12.22 (rev. 2003). In another installment I will continue this discussion about capacity.
To be continued . . . .
©Barbara Cashman 2014 www.DenverElderLaw.org