June 17, 2011
Determining Testamentary Capacity
The June 14, 2011 decision in the Los Angeles case of Stephen Andersen v. Pauline Hunt, B221077, certified in part for publication, clarifies the standard for determining testamentary capacity regarding establishment of Living Trusts and amendments.
Wayne and his wife established a Living Trust. Wife died, Wayne amended the Trust several times, and established several joint accounts. The amendments made friend Pauline the Successor Trustee after Wayne and a substantial beneficiary along with Wayne and wife’s two children, and a grandchild. The joint accounts were between Wayne and Pauline. Wayne had two substantial strokes during the period of time when the amendments were done. All the amendments were done by the drafter of the original Trust.
There were numerous issues that warrant a reading of the 44 page decision. The certified portion pertains to Wayne’s capacity to execute the Trust amendments and whether the standard of Contractual Capacity contained in Probate Code Sections 810 to 812 applied or the Testamentary Capacity set forth in Probate Code Section 6100.5. There was a great deal of mental health expert testimony. A summary of much of it is quoted or summarized in the appellate decision.
In its Oral Statement of Decision the Trial Court appeared to support a finding that the lower Testamentary Capacity standard applied and the four amendments were valid. In its later Tentative Statement of Decision and Judgment the Trial Court reversed direction and found that Wayne lacked the requisite capacity to execute the amendments. Finding that execution of a Trust or Trust amendment is “more akin to entering into a contract” and thus Probate Code Sections 810 to 812 apply regarding capacity to make a variety of decisions including execution of a Trust or amendment.
There is a great deal of discussion in the decision regarding the level of capacity each of the sections requires. Numerous cases are cited. The court refers to the “48 trial exhibits relating to Wayne Andersen’s diminished capacity due to dementia and/or alcoholism.” The appellate court agrees these exhibits demonstrate Wayne’s diminished capacity. They just don’t agree it shows a lack of testamentary capacity at the relevant times.
Section 810 creates a rebuttable presumption of capacity to make decisions. This presumption affects the burden of proof. A physical or mental disorder may not render the person incapable. One or more mental deficits so substantial that the person would “be deemed to lack the legal capacity to perform a specific act....” as opposed to diagnosis of a particular mental or physical disorder.
But 6100.5 “provides that a person is not mentally competent to make a Will if at the time of making the Will, either of the following is true...”
It goes on to set forth that the person must have capacity to understand the testamentary acts; understand and recollect the nature and situation of his/her property; and, remember and understand his/her relation to living descendants, spouse, parents, and those affected by the Will.
Also, that the person not be suffering from a mental disorder, delusions, or hallucinations except for which they would not devise their property as they did.
The appellate court cites numerous cases which restrict findings of lack of testamentary intent. “It has been held over and over in this state that old age, feebleness, forgetfulness, filthy personal habits, personal eccentricities, failure to recognize friends or relatives, physical disability, absent mindedness and mental confusion do not furnish grounds for holding a Testator lacked testamentary capacity. Estate of Self, (1948) 84 Cal App 2d 46.
So, you think the court is going to clarify by ruling that Sections 810 et seq. or 6100.5 apply. But it doesn’t quite do that.
The Court says “More complicated decisions and transactions thus would appear to require greater mental function; less complicated decisions and transactions would appear to require less mental function.”
“When determining whether a Trustor had capacity to execute a Trust amendment that, in its content and complexity, closely resembles a Will or Codicil, we believe it is appropriate to look to Section 6100.5 to determine when a person’s mental deficits are sufficient to allow a court to conclude that the person lacks the ability ‘to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.’” (§811, sub d (b)). So, 6100.5 doesn’t directly apply but is made applicable through 811 “to Trusts or Trust amendments that are analogous to Wills or Codicils.”
In the instance case the Appellate Court ruled that the Trust amendments were “indistinguishable” from Wills or Codicils and thus 6100.5 would apply and the amendments were valid. The trial court, it said, erred in using the “different, higher standard of mental functioning.”
So, it would appear that in a contest of a Trust or amendments, (and, maybe with a complex Will - such as one with a Testamentary Trust) where the issue is capacity of the Testator or Settlor/Trustor, one hurdle will be to convince the court of the basic nature of the document being simple like a Will or complex like a sophisticated Trust, depending on your client’s position. That determination will dictate which level of capacity will apply.
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John T. Anderson, Section Chair
Certified Specialist in Probate, Trust and Estate Planning
By the California State Bar Board of Legal SpecializationCopyright © 2011 by John T. Anderson
All articles by John T. Anderson may be copied for personal use, only. All articles or outlines from others may be used only with their personal authorization. Any approval is for personal use, only, and for non-commercial purposes.
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