Proper execution of all estate planning documents requires the person signing have sufficient mental “capacity” to recognize and comprehend the implications of what they are doing. Most people speak of legal “capacity” or “competence” has something people either have or don’t have. But capacity can depend on many variables, including the person’s capabilities and the task at hand for which capacity is required.

When determining capacity to execute estate planning documents, it is important to look at the client’s abilities, which may change from day to day (or even hour to hour), depending on their illness, fatigue and the side-effects of medication. On the other hand, greater understanding is required for some legal activities than for others. For instance, the legal capacity required for entering into a contract is considerably higher than that required for executing a will.

The standard definition of capacity for wills is:

Testamentary capacity requires the ability on the part of the testator to understand and comprehend, in a general way, the nature and situation of his property and his relations to those persons who would have some claim to his assets. It requires freedom from delusion, or other psychological conditions which might influence the ability to understand and make decisions about the disposition of his or her property. And it requires the ability at the time of execution of the will to comprehend the nature of the act of making a will.
This is a relatively “low threshold,” meaning that signing a will does not require a great deal of capacity. The fact that the next day the testator does not remember signing the will and is not sufficiently “with it” does not invalidate the will if he or she understood at the time what he or she was signing.

The standard of capacity with respect to durable powers of attorney varies from jurisdiction to jurisdiction. Some courts and attorneys argue that this threshold can be quite low. The client may only need to know that he trusts the attorney-in-fact to manage his financial affairs. Others argue that since the attorney-in-fact generally has the right to enter into contracts on behalf of the principal, the principal should have the capacity required to enter into contracts as well.

As a practical matter, in assessing a client’s capacity to execute an estate planning document, attorneys must ask, “Is anyone going to challenge this estate planning instrument?” If a client of questionable capacity executes a will giving his or her estate to the spouse, and then to the children if his or her spouse predeceases them, it’s unlikely to be challenged. However, if he or she executes a will giving their estate entirely to one child with nothing passing to the other children, the attorney must be more certain of being able to prove the client’s capacity because there is a greater likelihood of a challenge by one of the omitted children.

While the standards may seem clear, applying them to a particular client may be difficult. The fact that a client does not know the current year or the name of the current President may mean he or she does not have capacity to enter into a contract, but does not necessarily mean that he or she cannot 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 and conservatorship 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 like signing a will. But they can provide a professional evaluation of the person that will help an attorney make this decision and substantiate the client’s capacity to execute estate planning documents.

Because of the potential complications when assessing capacity and because you need to be certain that formal legal requirements are followed, it is always advisable to retain an experienced estate planning attorney when preparing and executing any estate planning documents.