Topic: Mental Capacity to Make an Estate Plan

MENTAL CAPACITY TO MAKE AN ESTATE PLAN

By Milton Babirak, JD, LLM      |      Babirak Carr, PC     |     Sterling, VA

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What is the Required Mental Capacity to Sign an Estate Plan?

This is a question that comes up frequently for the elderly or the disabled. Age, injury and disease take their toll. As for many legal questions, the answer is: “It depends.” In this case, it depends on the type of document.

 

Wills and Trusts

For wills and trusts, a person must know:  (1) the “objects of their bounty” (heirs); (2) the property they want to dispose of; (3) the manner in which they want to distribute their assets; and (4) that they are signing a testamentary document such as a will or trust. They need to know these things at the time of signing. They have to have a “lucid moment” at the time of signing. Further, they do not have to have an exact understanding. In the words of one court: “The testator need not have the same perfect and complete understanding and appreciation of these matters, in all their bearings, as a person in sound and vigorous health of mind and body would have; nor is he required to know the precise legal effect of every provision made in his will.”  (Huff v. Welch) In cases where there is some question about a person’s capacity, it may be a good idea to have a nurse or person who knows the testator well to act as witnesses at the signing. A letter from the attending physician or psychiatrist stating that the person is competent may be helpful.

 

Deeds, Durable Powers of Attorney for Financial Affairs and Healthcare, Etc.

An estate plan is not just a will or trust. It usually includes other documents such as a deed, durable power, form document designating beneficiary for an IRA, bank account or life insurance. The mental capacity required to sign such a document is different from the mental capacity required for a will or trust. A higher standard must be met. A person who signs such a document must understand the nature and consequences of his/her act at the time of the transaction and must not be impaired by reason of mental illness or defect to such an extent that the person cannot act in a reasonable manner in relation to the transaction.