"Undue influence" refers to a person’s will being usurped by the will of another. It is a significant problem when dealing with transfers and estate plans of the elderly or debilitated. It is the most common reason for a will contest. In Pennsylvania to establish the claim of undue influence in a will contest, the
Thank you to Juan Antunez of Florida Probate & Trust Litigation Blog for this information about the law governing undue influence.
"The “Worksheet” is based upon the IDEAL protocol, which combines knowledge from the fields of psychiatry, psychology, and sociology regarding the mechanisms…
Litigation involving undue influence and lack of testamentary capacity involves the determination of the mental state of the testator. While a medical diagnosis is not dispositive of the legal issue of whether or not testamentary capacity exists, or whether a testator is susceptible to influences, it is a very important piece of evidence for the fact-finder…
I always thought there should be some procedure to validate a will before the testator’s death. After all, the testator is the best source of evidence about his or her intent. And the best time to assess a testator’s capacity or susceptibility to undue influence is at the time the will is made, right? It …
Appointment of a Legal Guardian
If an individual lacks the mental capacity necessary to make rational choices, there are two ways recognized by the law for proving a substitute decision maker: (1) the individual, while he was still competent, designated someone to be their agent, also known as an attorney-in-fact, by signing a power of attorney, or (2) the state, acting through the courts, may appoint a substitute decision maker known as a guardian (also sometimes called a “conservator”), for the incapacitated individual.
Power of Attorney
A "power of attorney" is a document which is signed by an individual (the "principal") appointing another person or persons (called the "attorney-in-fact" or "agent") to act for and on behalf of the principal. If the power of attorney authorizes the agent to act for the principal in almost all circumstances, it is called a "general" power of attorney. If the power of attorney is effective even if the principal is disabled or incompetent, it is called a "durable" power of attorney.
A person executing a durable general power of attorney naming a husband, wife, child, or other family member as attorney-in-fact authorizes that family member to manage his or her financial and personal affairs even after incapacity, avoiding the need for any guardianship.
Spouse Has No Legal Authority
Just because you are married does not give you legal authority over the property and person of your spouse. It is absolutely essential that you give your spouse, or some other person you trust, power of attorney. If your spouse becomes incapacitated and you don’t hold his or her power of attorney, you cannot sell the home you own jointly, cannot make withdrawals from your spouse’s IRA or other retirement plan, and cannot act for your spouse in any other legal capacity. If you don’t have a power of attorney, the only other alternative is a court appointed guardian.
The court procedure is termed a “guardianship” in Pennsylvania, In some other states, the procedure is referred to as a “conservatorship.” The individual for whom a guardian has been appointed is called a “ward.” Sometimes the ward is referred to as an “incapacitated person,” which has replaced the old-fashioned and offensive nomenclature of an “incompetent person.”…
Capacity to Contract
Eccentricity or lack of prudence is not incapacity. In the words of Diana Romano:
“The lawyer’s task when considering the legal standard of competency is to be able effectively to distinguish foolish, socially deviant, risky, or simply “crazy” choices made competently from comparable choices made incompetently. “
People generally have the freedom to contract. Nevertheless, sometimes the law deems people unable to make decisions in their best interest. Minors, people with a mental disability, those who are in bankruptcy or people who have impaired judgment due to illness, disability, hypnosis, alcohol or drugs do not have capacity to contract.
In order to be bound by a contract, a person must have the legal ability to form a contract in the first place. This legal ability is called the capacity to contract. A person who is unable, due to age or mental impairment, to understand what she is doing when she signs a contract may lack capacity to contract.
If a person has a legal guardian and a court has made a determination that he or she is incapacitated, that person completely lacks the capacity to contract. Any contract signed by a person who has a legally appointed guardian is void. Many courts have held, however, that a person who is under legal guardianship may make a will if the person has testamentary capacity. The legal capacity required to make an enforceable contract is higher than that required to make a will.
A person may have a physical condition or illness which prevents him or her from performing at the levels expected of other persons of comparable age. If such a person cannot care for himself or herself, or acts in ways that are against his or her interests, such a person is entitled to the protection of the state to make sure they are not abused or exploited. Examples of physical conditions that can cause the loss of capacity to make contracts include paralysis, delirium, strokes, Huntington’s disease, Alzheimer’s disease, or dementia. Merely having the condition does not make the person incapacitated. The condition must have sufficiently affected the intellect so that the person cannot comprehend the nature and character of the transaction. If the person cannot comprehend the nature and character of his acts, any contracts or agreements such a person makes are voidable. Any contract may be ratified or disaffirmed by the person when he or she regains full capacity, or it can be ratified or disaffirmed by the person’s agent acting under a power of attorney. If the person’s condition is severe enough, the court may appoint a legal guardian.
Legal capacity is a flexible concept. A diagnosis of Alzheimer’s suggests diminished capacity, but you can not assume that a person is incompetent to contract because of such a diagnosis. Capacity must be viewed in terms of a person’s ability to perform a specific task. A person may be competent for some tasks, but lack capacity for others.
In the Pennsylvania case of Taylor v. Avi, 272 Pa. Super. 291 (1979) 1. 415 A.2d 894plaintiff sought to void a release she had signed after a car accident in which she sustained a head injury which left her with impaired memory, decreased ability to concentrate on such things as reading, and increased irritability. Citing a 1929 will case, Lawrence’s Estate, 286 Pa. 58, 65, 132 A. 786, 789 (1926), the court said that “"[f]ailure of memory does not prove incapacity, unless it is total or so extended as to make incapacity practically certain. A testator may not be able at all times to recollect the names of persons or families of those with whom he has been intimately acquainted . . . and yet his understanding of the ordinary transactions of his life may be sound."
The standard announced by the court in Taylor is that mere weakness of intellect resulting
from sickness or old age is not legal grounds to set aside an executed contract if sufficient intelligence remains to comprehend the nature and character of the transaction, and no evidence of fraud, mutual mistake or undue influence is present.
Some cases are obvious. The family of an Oregon man with Alzheimer’s succeeded in voiding his contracts – he bought 7 cars from the same car dealer in one month.
What about drinking and substance abuse? While a person may consume enough alcohol and/or drugs to reduce or eliminate his or her ability to understand what he or she is doing, such conditions are self-induced. The law does not generally allow the intoxication or drugged state to be raised as an excuse. There are cases where a contract is voidable when an intoxicated party cannot understand the nature and consequences of the transaction and the other party is aware of the intoxication. Compulsive and chronic intoxication and abuse may constitute a mental illness. A sober party who takes advantage of a vulnerable drunk may be guilty of fraud or undue influence.
This excellent article published in The American Journal of Psychiatry (164:722-727, May 2007) gives advice on how to document your client’s capacity. Check it out:
Assessment of Testamentary Capacity and Vulnerability to Undue Influence by Kenneth I. Shulman, M.D., F.R.C.P.C., Carole A. Cohen, M.D., F.R.C.P.C., Felice C. Kirsh, LL.B., Ian M. Hull, B.A., LL.B., and Pamela…
Growing Old and Issues of Diminished Capacity
The law assumes that adult individuals have mental capacity, that is, they are capable of making rational decisions on their own behalf. Note we say they are “capable” of making rational decisions. The law doesn’t expect or require that they actually make rational decisions. Competent individuals of all ages, old and young, have the right to make foolish, eccentric or idiosyncratic decisions. For better or worse, all of us are free to make bad decisions.
A persons’s capacity may change from day to day (or even during the day), depending on the course of the illness, fatigue and the effects of medication. Some folks have good days and bad days. Some are more alert in the morning; some have their best time in the afternoon. Legal competency is not something that a person either has or doesn’t have –it can be quite variable.
Whether or not a person is legally competent depends on the purpose for which the capacity is being determined. The law provides a different standard of competency for 1) making contracts, 2) making wills, 3) having a guardian appointed, 4) and giving informed consent to medical treatment.
Whether or not a person is competent is a legal determination, not a medical one. Medical testimony is important, and is always sought by a court in making the determination of capacity. Since the law has many different defined standards depending on the action being taken, the determination of whether or not a person is competent to do a certain thing is always a legal decision.
What surprises most people is that the capacity to make a will, called testamentary capacity, is the lowest level of capacity in the law. All that is required is that the person making the will (1) understand in a general away, the nature of his property, (2) knows who are the “natural objects of his bounty,” that is, the persons who would normally be his heirs, and (3) must be able to comprehend that he or she is making a will.
A person who has had a stroke, or is diagnosed with Alzheimer’s disease, may still have sufficient capacity to make a will even though there is some impairment of speech, some impairment of thought processes, and/or some physical impairment. The fact that a client does not know the year or the name of the President does not necessarily mean that she can not make a will. Since signing a will does not require a great deal of capacity, the fact that the next day the person does not remember the signing of a will does not invalidate the will if he had the minimum required capacity the day before when he signed it.
Growing Old and Issues of Diminished Capacity
“Aging seems to be the only available way to live a long life.”
– Daniel Francois Esprit Auber
Maggie Kuhn started the Gray Panthers in 1970 as a response to her forced retirement at age 65. The mission of the Gray Panthers was to speak out against age discrimination, the Viet Nam war, and other political oppressions. There is no doubt that stereotyping due to age exists in contemporary society. The Gray Panthers call this kind of discrimination “ageism.” To be told "you’re too old" is as disheartening as to be told "you’re too young"; both statements make you a stereotype when in fact you are an individual.
No bright line test
Obviously, mere chronological age does not give an answer to the question of whether or not a person is mentally or physically impaired. Nor does a medical diagnosis give the complete answer on the issue of the ability to be in control of one’s own life. When and to what extent a persons capacity to make decisions is diminished is a very difficult topic for lawyers, care-givers, and families.
The right to make bad decisions
How many of us know an older adult insisting on living alone at home when friends, family, and advisors think it’s a bad idea? Is the person incapable of making decisions? Or is it simply a decision that others do not agree with. Concern in a situation like this stems from the fear that the person will be hurt – they will leave the stove on and burn the house down, they will fall down and not be able to get up or summon help, they won’t eat properly and can’t get around to doctor’s appointments and the grocery store. Is a person who chooses to live this way incompetent? Or merely independent?
There is a long-standing American tradition of individualism – of each person being free to make his or her own choices and decisions and choosing his or her way of life. While fostering independence and self esteem, individualism also tends to promote self-centeredness at the expense of family and community. Individualism can mean being free to make bad choices.
Different competency standards
The issues surrounding diminished capacity run from whether or not an older adult should contihnue to drive, to whether he or she can live alone at home, wheter he or she can make a will, make gifts, and otherwise control finances, to whether or not a court-appointed guardian must be appointed. Often, a family’s first encounter with this question is whether or not the older adult should continue driving a car.