By Roberta M. Gubbins
Legal News
"Why is client capacity an important issue?" asked Katie Lynwood, attorney with Bernick Radner, opening the discussion of client capacity at the Ingham County Bar Association Probate Section meeting held on March 20th.
"Because as practitioners and advisors we want to make sure the documents we prepare for our clients are valid, are enforced and that the client's wishes are carried out," Lynwood said.
"We also want to protect our client and ensure that the documents prepared while the client has capacity are the documents that are followed. We try to avoid litigation" that can arise when beneficiaries removed from the will claim the client was incapacitated at the time the document removing them was signed.
What is capacity?
The law starts with the presumption that the individual has the capacity to make a will, which means that the person raising the incapacity issue must prove it.
Michigan law defines incapacitated individuals as those who are impaired by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs or alcohol such that they can't make informed decisions.
Incapacity, Lynwood noted, can be transient. "Is this something that comes and goes depending on the day or is it permanent?
The Medical Issues
Jacque D. Moss, Ph.D., licensed psychologist, said, "It is really interesting to hear that it is difficult to determine capacity from a legal point of view. It is also really, really hard to determine from a medical point of view."
"It is hard because the medical professionals don't like to assess people and go to court. In the olden days it was easier--you were either senile or you weren't--now we have gradation of things."
"The principal today," she said, "is having people keep as much independence as they possibly can" and, at the same time, protect them.
When Moss asked the question 'what was the earliest trial of mental capacity?'
Josh Ard said, "There was a trial of Sophocles (497-406 BC), the playwright, when, at age 90, his children wanted to manage his money. His defense was the text of his play Oedipus at Colonus and the court said 'you're fine.'"
Acknowledging that was an early trial, Moss said the earliest recorded was in hieroglyphics in 2600 BC when the capacity of the third king of the second dynasty was challenged.
Historically, she noted, our law comes from British law between the 1300's and the 1700's.
"There was a lot of law articulating treatment for the lunatics (mentally ill) and idiots (mentally retarded). Sometimes they were locked away and sometimes they were forced to work or were displayed at carnivals. Until 1800, you didn't have to have a doctor (to commit a person)."
"We've been struggling with categorizing people for a long time and it is still difficult. As of yet, everything I read says there is no standard deviation of civil incapacity in Michigan."
The range of mental incapacity is broad. There is cognitive disability where a person can't think and plan and there is behavioral disability where the individual has the ability to plan but can't execute the plan.
"What I find with the courts," she said, "is they want to deal with the behavioral ability."
"Really the most important thing you can do with any physician," she advised, "is to be specific about what question you're asking. Because we do different tests for different kinds of questions and the purpose of the evaluation will determine which instrument we use."
Generally, questions are posed in terms of three general areas including whether the patient can live alone, manage their finances and procure/refuse medical care.
She prefers to do the evaluation at their home because "it is so much better" and she can get a pragmatic sense of how they are doing.
Asked about cost and scheduling, she said that costs range from $500 to several thousand and are usually scheduled six to ten weeks out.
"Medicaid/Medicare do not cover the costs and most private insurance carriers won't pay for it," she said.
What are the capacity requirements for certain documents?
Lynwood explained that a person can create a will or a trust if they are over 18 and have sufficient mental capacity, defined by statute as one who knows her property, her heirs, understands she is providing for the disposition of the property after her death and understands the effect of signing the documents.
"Timing," said Lynwood, "is important and capacity is judged as of the time of the execution of the instrument, not before or after."
Thus she asks for the evaluation as near to the signing of the documents as possible.
Powers of attorney to perform legal and financial acts must be executed by a mentally competent person. For medical powers of attorney and do not resuscitate powers the person must be over 18 and of sound mind.
There is a higher mental capacity required to create a contract. To avoid a contract, it is necessary to show that the person was of unsound mind when the contract was made. Emotional disorders alone will not invalidate a contract.
Lynwood recommended that practitioners observe the client during meetings for signs of stress. "Are they comfortable? Can they read the documents? Are they hearing impaired?"
Katie Lynwood is an attorney practicing in the areas of trusts and estate planning, elder law, Medicaid and family law. Jacque D. Moss, Ph.D. is Licensed Psychologist in private practice.
The next probate meeting will be April 20th, location to be decided, on the topic of Digital Assets. Section members will be notified or check the ICBA calendar.
Published: Mon, Mar 26, 2012
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