Not everyone can make a will. To make a will, you must have “testamentary capacity.” The requirements vary by state, but generally you must be 18 years of age and be of “sound mind.”
Lack of capacity when executing a will can lead to the will being challenged in a will contest, by whomever has advantage to gain from contesting the will. These proceedings can be terrible conflicts, even tearing families apart. They often occur when elderly parents wait too long to do planning, procrastinating even as signs of dementia occur.
A person does not lack testamentary capacity simply because they have a mental disease or disability. Weakness of mind, forgetfulness, lack of fairness or wisdom or literacy of education—none of these automatically demonstrate lack of “sound mind.” Witnesses, for example, can attest to lucid moments, and the challengers have the burden of proof.
Traditionally, the capacity standard for Wills has been relatively low. In California the standard is codified at Probate Code Section 6100.5, which provides that a testator has the capacity to make a Will if he or she can (1) understand the nature of the testamentary act, (2) understand and recollect the nature and situation of his or her property, and (3) remember and understand his or her relations to immediate family members and those whose interests are affected by the Will. This is known as “testamentary capacity.”
The capacity standard for documents other than Wills (trusts, for example) is higher, and requires that the individual be able to communicate, understand and appreciate (1) the rights, duties and responsibilities created or affected by his or her decision, (2) the probable consequences of the decision, and (3) the significant risks of, benefits of, and reasonable alternatives to the decision. Probate Code Section 812. This is referred to as “contractual capacity.”
Under a recent California case, it appears that the less stringent standard under 6100.5 will apply to trust amendments of a “simple and testamentary nature.” Andersen v. Hunt, 196 Cal. App. 4th 722 (2011). The trust amendments in that case involved very simple changes to beneficiaries’ percentages, yet as to changing life insurance beneficiary and opening joint accounts, the court applied the higher contractual standard of 812.
It is common practice to restate the entire trust agreement periodically to prevent the accumulation of multiple, confusing amendments. However, in cases of suspected diminished capacity, it may be better practice to keep amendments very simple. The higher contractual standard may be applied to more complex dispositive provisions, and possibly to any change of administrative provisions. If more complicated or non-testamentary changes are required and capacity is questionable, then depending on the family situation and the likelihood of litigation it may be better to incorporate the changes into a new will-based plan, discarding the living trust plan at least for the time being.
Another common basis for challenging wills is undue influence.