Evaluating Capacity: Trusts, Wills, and Conservatorships

Could lawyers have greater exposure to legal malpractice claims as the baby boom generation, the largest proportion of the U.S. population, starts to age? Unfortunately, the risk of Alzheimer’s and other dementias increases when an individual is age 65 and older. In 2020, the number of people living with Alzheimer’s in the U.S. was 5.8 million. This number is projected to increase to 13.8 million in 2050. This suggests that attorneys will likely encounter more situations in the future in which they need to assess whether clients have legal capacity to create estate plans and enter into legal transactions.

The law generally presumes that a client has capacity to enter into legal transactions. How to overcome this presumption will depend on the legal transaction at issue and the jurisdiction. This article will focus on how to assess a client’s testamentary capacity to make a Will or Trust. Additionally, this article will evaluate the requirements to appoint a conservator for an adult and least restrictive alternatives to such an appointment.

Testamentary Capacity

Andersen v. Hunt, 196 Cal. App. 4th 722, indicates that the ability to “transact important business, or even ordinary business, is not the legal standard of testamentary capacity.”[1] Additionally, grounds for holding that a testator lacks mental capacity cannot be established simply by claims of old age, feebleness, forgetfulness, filthy personal habits, eccentricities, failure to recognize old friends or relatives, physical disability, absent-mindedness, and mental confusion. Further, the fact that a testator is under a guardianship is not enough to establish a lack of testamentary capacity at the time of Will execution. 

The Restatement of Property provides simply that a testator has capacity to make a Will, if at the time of the Will execution he or she is capable ofknowing and understanding in a general waythe nature and extent of his or her property,the natural objects of his or her bounty,the disposition that he or she is making of thatproperty, and he or she is capable of relatingthese elements to one another and forming anorderly desire regarding the disposition of theproperty.^[2]

Uniform Guardianship, Conservatorship and Other Protective Arrangements Act

The Uniform Law Commission (ULC) provides that a court may order a conservator for an adult only if it finds by clear and convincing evidence that (1) the adult cannot manage his or her property or financial affairs because he or she cannot receive and evaluate information or make or communicate decisions, even with appropriate supportive services, technological assistance, or supported decision making; (2) conservatorship is necessary to avoid harm to the adult or “significant dissipation of the property of the adult”; and (3) conservatorship is the least restrictive method to meet the adult’s demonstrated needs. Additionally, the court may only grant a conservator powers that are necessary to meet the demonstrated limitations of the adult, nothing greater. The court shall issue orders that “will encourage development of the respondent’s maximum self-determination and independence.” The comments by the ULC indicate that imprudent or wasteful management of property is not sufficient to impose a conservatorship.

State Trend in Following the Uniform Guardianship, Conservatorship and Other Protective Arrangements Act

In alignment with the ULC, there is a trend among the states to encourage self-determination and independence rather than impose guardianships or conservatorships on adults. Twenty-four jurisdictions have enacted supported decision-making legislation.^[3] Supported decision-making allows adults with disabilities to make their own decisions with the help of some assistance (e.g., from individuals acting as supports). California recently passed Assembly Bill 1663 (effective January 2023), which establishes a supported decision-making process for adults with disabilities. 

Steps for Analyzing Client Capacity

The American Bar Association’s Assessment of Older Adults with Diminished Capacities provides a useful approach for assessing client capacity. A lawyer’s assessment of capacity should consist of first, an examination of factors affecting a client’s decision-making ability, and second, a determination of what supports and services could strengthen a client’s decision-making ability.

Building Client Trust and Confidence

During client meetings, lawyers should aim to make clients as comfortable as possible to increase their decision-making ability. Clients that are not comfortable may not communicate clearly, making it difficult to accurately assess their decision-making ability. Consider having client meetings in clients’ homes so they feel more at ease. When introducing yourself, take time to “break the ice.” Interviewing clients alone is important to build trust and help eliminate the chance of undue influence. But, also consider if clients are more comfortable with a support person during the meeting (e.g., a family member or friend). If this is the case, ensure that you speak directly to the clients rather than past them to others. Additionally, letting clients know of the confidentiality of the attorney/client relationship and that anything said during the meeting will not be shared with others is a good idea to build trust and confidence.

Addressing Hearing Loss, Vision Loss, and Cognitive Impairment

For clients that are hearing impaired, consider using a PocketTalker to amplify your voice when speaking and try to minimize background noise. Also consider providing a follow-up letter to clients summarizing what was discussed during the client meeting to compensate for issues with client hearing.

For clients with vision loss issues, face clients away from bright windows and avoid glossy print materials to accommodate clients with sensitivity to glare. Format printed materials in larger sized font (e.g., fourteen- or sixteen-point font) and double-spaced. Also consider having reading glasses and magnifying glasses available on conference tables for clients.

For clients that may be cognitively impaired, conduct the client meeting during a time of the day when clients are at their peak performance (e.g., mid-morning). Discuss one issue at a time with clients and let clients know when you are switching the discussion to another topic or issue. Repeat or summarize clients’ answers to questions to ensure for correctness of communication.

Implicit Bias

When assessing client capacity, it is important to be aware of implicit biases that can arise when dealing with older clients. Some may assume that aging and cognitive impairment go hand-in-hand. But clients may lack decision-making ability for a multitude of other reasons beside cognitive impairment, including hearing or vision loss, or even grief from the loss of a loved one.

Conclusion

California case law indicates that testamentary capacity is a lower standard than that required for entering into contracts. Additionally, a client’s lack of decision-making ability in the realm of conservatorships is not static. Individuals can have increased decision-making ability when provided with the right supports, whether they be person-supporters, technological, or social service supports. Following the ULC, California now requires an assessment of least restrictive alternatives to conservatorships.

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[1] See Andersen v. Hunt, 196 Cal. App. 4th 722, 727 (2011).

[2] See Restatement (Third) of Property (Wills & Don. Trans.) § 8.1(c) (Am. 2003).

[3] Alaska, California, Colorado, Delaware, District of Columbia, Illinois, Indiana, Kansas, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, Nevada, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Rhode Island, Texas, Washington, and Wisconsin.