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The Right Mentality in Estate Planning: Mental Capacity and the Legal Right to Make Decisions One of the unfortunate perils that comes with growing older is the risk for decreased mental capacity, memory impairment, and dementia.  This is a key reason why Tandoc Law strongly recommends implementing an estate plan sooner rather than later.  That being said, it is not always too late for people showing signs of dementia to execute, correct, or revoke an estate planning tool such as a will, living trust, durable power of attorney or advanced health care directive.  Of course, it is wise to have such valuable tools in place before the issue of mental capacity arises.

There are different standards of mental capacity that are evaluated depending on the purpose of the document that is being created. 

However, living trusts typically are contractual in nature  if the living trust authorizes a successor trustee to act in the event of the settlor's (creator's) incapacity.  Thus, in addition to testamentary capacity, one's capacity to contract is evaluated as well.  According to Probate Code Sections 4120 and 4671(a), if a person has the capacity to contract, then the person may execute a durable power of attorney.  One has the capacity to enter into a contract if the person is of sound mind.  A person is of unsound mind if he or she is substantially unable to manage his or her own financial resources or resist fraud or undue influence.  The courts look at whether a person is mentally competent to deal with the subject at hand with a full understanding of his or her rights, and whether the party understood the nature, purpose, and effect of the transactions.

In cases where a person regains capacity, the ability to comprehend creation of an advanced health care directive is determined by the primary physician unless otherwise specified in Probate Code Section 4658.  However, due to the chilling effect of HIPAA, physicians may be unwilling to make such a determination without a court order.  Thus, it is essential to have an advanced health care directive in place prior to any question of one's mental capacity in order to avoid needless headaches and court costs.

Unfortunately, incapacitation creates thorny issues when the above documents have not been drafted beforehand.  As will be discussed in future months, the government has other means of recourse - probate and conservatorships among them - that are available to individuals who failed to provide instructions concerning their health or disposition of their assets.  However, these mechanisms are far more costly, can be exceedingly time-consuming, and involve use of the courts.

Tandoc Law can help you prevent the need for conservatorships and probate proceedings through the use of an appropriate estate plan.  Alternatively, we are able to help those grappling with probate or conservatorship proceedings as they achieve their goals through the court system. Please feel free to contact us and set up a consultation concerning your needs.

Wills and typically living trusts are documents that delineate the distribution of one's property.  Thus, one's "testamentary capacity" is evaluated.  One has testamentary capacity if the person is able to understand the nature of the testamentary act, understand and recollect the nature and situation of the individual's property, and remember and understand the individual's relationships with relatives, one's spouse, parents, children, and others whose interests are affected by the will or living trust.


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