With so many of our older clients suffering from the dementia and the early stages of Alzheimer’s, as well as younger clients who may have developmental difficulties, estate practitioners are sometimes at a loss to determine whether a client has the capacity to execute the documents we have drafted. We recently received additional guidance from the Appellate Division, Fourth Department.
During a guardianship proceeding that was later dismissed, a daughter sought to prove that her mother lacked capacity to execute a Power of Attorney and a Health Care Proxy, appointing a grandson and another daughter, respectively, as agents. The Supreme Court of Oswego County (Judge John J. Elliott) found that the mother had capacity to execute the documents, and dismissed the guardianship petition. The Appellate Division later affirmed (In the Matter of the Application for the Appointment of a Guardian of the Person and/or Property of Mildred M.J., an Alleged Incapacitated Person, 43 A.D.3d 1391, 4th Dept. 2007).
The allegation was that the mother was suffering from dementia, and was therefore not able to understand the documents she was signing, or the consequences of signing them. There was testimony at the hearing that the mother did indeed suffer from “moderate” dementia. However, the Appellate Division stated that “there is no presumption that a person suffering from dementia is wholly incompetent.”
The court required other evidence to show that the mother lacked capacity at the exact time she signed the documents. Instead, the other children presented the testimony of a doctor and a nurse practitioner, who stated that the mother “would have been able to understand questions such as whom she would like to make her health care decisions if she were unable to do so and whether she would like her grandson to handle her financial affairs.” The drafting attorneys also testified in support of the mother’s capacity (every estate attorney’s least favorite activity).
Only that most basic understanding is required in order to have capacity to sign estate planning documents.
We often advise our clients to create Health Care Proxies and Powers of Attorney in order to avoid the nightmare of a contested guardianship proceeding. It is unfortunate that it had the opposite result in this case.